Authentic luxury items are not a scam. They’re alternative investments.

4 min readSep 17, 2023

~ Sunday, September 17, 2023 Blog Post ~

The US$2-million Hermès Kelly Rose Gold handbag (Image Source: Wonderslist)

I came across this Instagram post in which a speaker named Mr. Joshua Fields Millburn cited that luxury products, which the rich and famous like Kim Kardashian can afford and flaunt, are a type of fraud. He explained that these items are created to get impoverished people to waste their hard-earned money.

The Instagram post’s speaker, who is the host of The Minimalists podcast, also pointed out that luxury products are manufactured to make ordinary people aspire to get them. Consumers purchasing these products acquire them for their logo that signals that they are wealthy or are of the upper social status.

The speaker in the Instagram post is clearly against luxury brands. He remarked that he would rather have the profits of such multi-billion-dollar businesses rather than have their products with extortionate prices.

I think authentic luxury products such as an Hermès Birkin Bag are not a scam. They are alternative investments. The Hermès deluxe luggage’s tag price ranges from US$10,000 to US$450,000, depending on factors such as hue, size, date stamp, condition, and material.

Alternative investments are assets which are not the conventional ones such as stocks, real estate, cash, and bonds. Examples are:

ART, such as Leonardo da Vinci’s “Salvator Mundi” acquired for US$450.3 million by Saudi Arabian businessman Badr bin Abdullah Al Saud in November 2017;
COLLECTIBLES, such as Air Jordans which are sneakerheads’ dream, baseball cards, stamps, Pokémon cards, and rare coins; and
ANTIQUES, like old and rare books and comic books, sterling silverware, old clocks, old cameras and lenses, Victorian Era art pottery, and depression glass.

Besides these three tangible assets, other examples of alternative investments are:

4. VENTURE CAPITAL OR PRIVATE EQUITY like investment funds operated by billion-dollar alternative investment firms such as Blackstone, Apollo Asset Management, Carlyle Group Incorporated, KKR & Company Incorporated, and Cerberus Capital Management;

5. COMMODITIES, like precious metals silver, gold, platinum, and copper; energy such as oil, gasoline, heating oil, and natural gas; and raw materials and foodstuffs like sugar, grains, meat, coffee, cotton, and wool;

6. HEDGE FUNDS, such as Ray Dalio’s Bridgewater Associates and Citadel which has US$339 billion in assets under management as of March 2023;

7. DERIVATIVES;

8. PRIVATE DEBT; and

9. INTELLECTUAL PROPERTY, SONG RIGHTS, OR PATENTS, like John Lennon and Paul McCartney’s “Yesterday,” which is a US$30-million song, and The Hill Sisters’ world-famous “Happy Birthday” tune. The latter released in 1893 has brought in about US$50 million.

Interestingly, the “Happy Birthday” song came about when the Hill sisters needed a tune for their kindergarten class to chant on birthdays. Hence, they wrote “Happy Birthday” and 130 years later, this world-renowned composition is still sung and is familiar to people globally from all walks of life.

I think the speaker in the Instagram post or people he knows who availed of luxury goods felt swindled. After all, they surely must have been made to shell out staggering amounts of their hard-earned money upon purchasing the deluxe products.

I think the speaker’s perspective is just based on his adverse sentiments towards products made by conglomerate LVMH Moët Hennessy Louis Vuitton and other luxury fashion houses due to their being very expensive and out of reach for the masses.

For me, I am not against luxury products. But I am not interested in purchasing any of them, considering my miserly, practical, and financially savvy nature. Moreover, I am not a show-off.

Similar to the speaker, I also own fine things with designer brands, but I do not intend to use them to signal to people that I’m well-off. Besides, I have noticed that people in this generation are practical and prefer minimalism over being flashy or showy.

I have seen global brands like Escada, Tory Burch, and Lolita Lempicka and other expensive designer brands wane in terms of global popularity, go bankrupt, or cease their business operations in recent years. This reality only goes to show that luxury names do not matter and will no longer do so in the future since generations and world views change. What is important is the durability and functionality of the products.

Anyhow, having alternative investments such as the Mouawad 1001 Nights Diamond Purse which is worth a whopping US$3.8 million; the US$2-million Hermès Kelly Rose Gold handbag; or the US$12.6-million Mickey Mantle 1952 baseball card is definitely worth it.

Being multi-million-dollar alternative investments, having them sold or auctioned certainly leaves their owners financially secure.

References:

https://www.cnbc.com/2023/04/26/blake-martinez-pokemon-card-side-hustle-company-brings-in-millions.html

https://edition.cnn.com/style/article/salvator-mundi-scandal-bouvier-rybolovlev-intl/index.html

https://eu.louisvuitton.com/eng-e1/products/neverfull-mm-damier-ebene-008116/N41358

https://en.wikipedia.org/wiki/Badr_bin_Abdullah_Al_Saud

https://en.wikipedia.org/wiki/List_of_most_expensive_paintings

https://en.wikipedia.org/wiki/List_of_most_expensive_sports_cards

https://en.wikipedia.org/wiki/LVMH

https://en.wikipedia.org/wiki/Mickey_Mantle

https://www.fashionphile.com/p/louis-vuitton-monogram-neverfull-gm-210502

https://www.investopedia.com/articles/markets/011116/worlds-top-10-private-equity-firms-apo-bx.asp