Lizzy and Lissa break down the hidden costs – financial and otherwise – of luxury brands. Beyond the price tag of luxury goods and services they delve into the psychology behind why we, as a society, care about luxury. There’s no denying that luxury brands have a huge influence on many aspects of our lives such as our spending habits and our self-perception. But are they worth it?
Lizzy and Lissa break down the hidden costs – financial and otherwise – of luxury brands. Beyond the price tag of luxury goods and services they delve into the psychology behind why we, as a society, care about luxury. There’s no denying that luxury brands have a huge influence on many aspects of our lives such as our spending habits and our self-perception. But are they worth it?
Main Topics
00:00 Introduction
01:22 Running The Numbers Segment
02:51 The Origins and Evolution of Luxury Brands
04:36 The Definition of Luxury
11:01 Personal Stories and Identity
23:35 Luxury Brand Strategies
28:49 Quality vs Quantity of Jewelry
32:44 Consciously Spending on Luxury
36:56 Luxury Goods as Investments
38:18 High-Low Fashion Mix
39:23 20 Cents Segment
42:17 Final Thoughts
References for Statistics
https://www.statista.com/outlook/cmo/luxury-goods/worldwide
https://www.vox.com/money/23728283/luxury-designer-boom-nike-lvmh-pandemic-le-creuset
https://www.jpmorgan.com/insights/global-research/retail/luxury-market
Lissa: If I gave you $10,000 right now to go shopping, would you spend it on a few luxury pieces or a whole bunch of a lot more affordable stuff?
Lizzy: That's such a good question. I would probably go middle ground, like a good amount of quality stuff that's not full-on luxury, but not fast fashion.
Lissa: Yeah, good answer.
Lizzy: That's my take.
Lissa: I think that's my answer too.
Lizzy: All right.
Lissa: So we're going to talk about whether or not luxury brands are worth it.
Lizzy: Let's talk about it.
Lissa: Welcome to Net Net with Lizzy and Lissa, where we analyze hidden costs and empower you to make your own damn decisions in life. Each episode covers a different facet of life, and at the end of each episode, we each give our takes on whether we think something is net positive or net negative.
Lizzy: I'm Lizzy, a strategist and consultant with over 17 years of experience in finance and investing.
Lissa: And I'm Lissa, a personal finance expert and an accredited financial counselor. We're best friends who talk about money.
Lizzy: And everything else.
Lissa: So, are luxury brands worth it?
Lizzy: First up, running the numbers on luxury brands.
Lissa: According to Statista, in 2024, the luxury goods market is projected to generate revenue of $368 billion.
Lizzy: Big business.
Lissa: Yeah.
Lizzy: All right. And according to global data, Americans with a household income of less than 50k, made up 27% of regular luxury consumers. Meanwhile, luxury consumers with an income of over $150,000, were about the same rate.
Lissa: Man.
Lizzy: So that lower income level is consuming luxury at the same rate as-
Lissa: As people making over 150K.
Lizzy: Yeah. Crazy.
Lissa: That's crazy. The business of fashion reported that in 2022, Louis Vuitton had an estimated margin above 50%. So that's compared to a 20 to 30% profit margin at a fast fashion brand, meaning they're making more money per good.
Lizzy: Yep. We're going to talk about that.
Lissa: We're going to talk about that.
Lizzy: Yup. And even in a challenging economic time, like 2022, the luxury market grew 7% organically year over year according to JPMorgan research.
Lissa: Yeesh.
Lizzy: People are struggling.
Lissa: Yeah.
Lizzy: Still buying these brands.
Lissa: Man. It's a, what, recession proof maybe?
Lizzy: Recession proof.
Lissa: Interestingly. Well, but we know there's more to numbers and these statistics. So today, let's talk about it. Are luxury brands worth it?
Lizzy: So first off, let's dig into why we buy luxury brands. What's your take?
Lissa: Oh, that's very loaded. I think that we've kind of been conditioned to, right? There's messages that we've learned about what is associated with luxury and what that tells about us as individuals.
Lizzy: Yup.
Lissa: So it's an identity-related thing, I think?
Lizzy: I love that you said that. So I actually did some digging into the origin of luxury brands, and even before there were actual brands, luxury goods or these kind of high-end goods emerged in ancient societies, like Ancient Egypt, but they were more associated with, certainly with royalty and wealth and status, but also with religious and spiritual symbolism.
Over time, that evolved and luxury brands, as we know it today, really came to be in the 1800s, but at the time, this was pre-industrial revolution. So the premise there was this craftsmanship that was superior quality, really, really fine goods, rare materials, and so the idea of paying more for something that is exclusive that not everyone can have, that's kind of where that originated.
Then, industrial revolution happens. All this stuff ends up becoming mass-produced in the same way as everything else, but the power of the brand and the association is really what stuck around.
Lissa: Right. So it was like the evolution of, because we kind of throw these words around all willy-nilly, but it was actually luxury goods, but the evolution into a morphing of luxury goods meets luxury brand...
Lizzy: Yes.
Lissa: ... and that is what we kind of know luxury to be today, because I was going to actually ask how do we define luxury?
Lizzy: Sure. So I mean, technically, it's something where you are paying excess, literally that's the definition. You are paying excess...
Lissa: Then, market right?
Lizzy: ... relative to what you can get a comparable good for the same price.
Lissa: So how does quality play in?
Lizzy: That is a question, especially in today's market, right?
Lissa: Right.
Lizzy: I think originally you were paying for the craftsmanship and also paying for that identity or the status. I think that has always been a part of it. If you were royalty or you are like a lord or something, you had something that no one else could have and that makes you special...
Lissa: Right.
Lizzy: ... which is, that's the origin of brands in general. It's what it says about you, how it makes you feel. People think brands are like a marketing thing. Branding is really about what a product or good or service communicates to its consumers and what it says about their consumers.
Lissa: Right. So there's a lot of layers to luxury. Part of it can be the quality and craftsmanship.
Lizzy: Sure.
Lissa: You're going to buy a bag that's less likely to break in the next 10 years.
Lizzy: Theoretically.
Lissa: Theoretically, than a bag that's a lot cheaper and cheaply made, so there's quality of craftsmanship. There's also an element of scarcity, I think mentioned earlier, right?
Lizzy: Yup.
Lissa: Because if you just mass produce it, then the way the market works is like there's so many and now there's too many in inventory. We got to sell it. We can bring down the cost.
Lizzy: Which is, yeah, it's kind of a chicken and egg. If we price it really highly, fewer people are going to be able to buy it. So it is inherently scarce and rare, but then also, there are certain things like our Hermes bags that are very limited edition, very, very few people can access them or certain luxury cars. They only make a very small amount, which then just increases the demand and the price.
Lissa: So quality, scarcity, but then also something that one person or brand can't fabricate, which is perception, right?
Lizzy: Yes.
Lissa: There has to be a...
Lizzy: A few-
Lissa: ... mass perception of something being luxury for it to be luxury?
Lizzy: A few other things that you tend to see with luxury brands that feed into that perception are heritage. So there's typically a historical element. These are long-standing brands that have been associated with wealth and society, which is really interesting when we start to get into modern perceptions of race and identity and class in the intersection of all of those things and how that interplays with luxury, because back in the day when a lot of these brands originated, they were really only available to wealthy white people.
Lissa: Right.
Lizzy: So the heritage is a big component. The design is a huge component. Design commands a premium in terms of the world. And so, originally, you were paying for exclusive designs you couldn't get anywhere else. It was trend setting because this is the aristocracy or whoever that's setting the style.
Now, there's knockoffs and there's a huge market, but if you've ever seen Devil Wears Prada, there's that classic scene about Cerulean blue, how this was set by the fashion industry and then trickles down over years and years to fast fashion or the average consumer and they have no idea the history behind it.
Lissa: Right. So design and style and fashion are another element of it, but sometimes it's not one that determines the other. Just because something was designed to be stylish in mind, doesn't make it luxury, and then something could be luxury because it comes from a brand name that's already known, but people could think it's ugly as hell, but still-
Lizzy: Man, look at Balenciaga. Balenciaga got people acting like fools.
Lissa: You're going to name names?
Lizzy: It is a troll. It is a troll. I'm going to charge you thousands and thousands of dollars for this ugly ass...
Lissa: So these clown shoes [inaudible 00:08:44].
Lizzy: ... these clown shoes, and you're going to rip it so that people know you're wearing Balenciaga.
Lissa: Right, but not to knock people who wear that because what you're buying is what it says about you...
Lizzy: Exactly.
Lissa: ... which is a part of what luxury is.
Lizzy: It's a status symbol.
Lissa: Yeah.
Lizzy: It communicates something about you, and it really comes down to power and capital. So we all navigate this world with different kinds of capital. One of them is literal financial capital, another one is social capital or cultural capital, and it equates to power. It gives you influence and that influence, you can trade for things. You can navigate the world upward mobility, and even looking back to a lot of these things are associated with women, historically women's power was in their appearance.
And so, if you're trying to secure yourself a better position in the world as a woman who has no financial power historically, how do you do it? You make yourself as desirable as possible. You make yourself unique and rare so that you can move up and secure your future. And so, that's a lot of that intersection. And then over time, I think things like brands like Chanel, especially with Coco Chanel became an empowerment tool for women to reclaim some of that. So there's a long storied history here.
Lissa: Right. And so, that's what I mean by that. I know we're clowning on Balenciaga, right? But the fact of the matter is, you wear it, you walk down Rodeo Drive or something, and you get looked at because someone is like, "Oh, are they a celebrity? Are they someone?"
Lizzy: [inaudible 00:10:20].
Lissa: Right? And that could, in some weird way, further your career, further your wealth, further or even just the perception of you.
Lizzy: Your opportunities.
Lissa: Yeah.
Lizzy: Yeah, man, I was at Petco the other day. I took my brand new puppy for training. This guy was chatting me up in line because I have a really cute dog, and we're chatting for a few minutes. I walk out, I get in my car, I'm getting the puppy in the car and I see a G-Wagon next to me. And I'm like, "Oh, okay." And then, this guy gets into it and I'm like, "Okay?" But that's a luxury, very expensive car and you notice it, right? It is something that is noticed and that like it or not, has value in our society.
Lissa: Well, so that just reminded me of why I ended up getting a Mercedes, I want to say 10 years ago, 10 years ago...
Lizzy: Damn, girl.
Lissa: ... this month, maybe even to the day, very crazy. I have a weird relationship with luxury and brands. I think culturally, being a daughter of immigrants, there's a huge connection with what you have material items, what it says about your ability to make it where you are. You-
Lizzy: Success.
Lissa: Success, you belong here, you've worked hard, you've earned it, so much so, that that's why I think we see a lot of people in that under 50K income group...
Lizzy: 100%. Yeah.
Lissa: ... buying these things. And so, that's my upbringing had a lot of weird mixed messages, and I don't blame my parents at all, because I think they were fed these messages.
Lizzy: Everyone who socialize consume this.
Lissa: Right. So I had these messages of, "No, we can't afford that. Those clothes are too expensive," but here is a, I'm going to carry around a nice handbag because that will show people that we've made it and we're good, right?
Lizzy: Sure. Interesting.
Lissa: Yeah. And so, my mom has a handbag collection. It's nothing crazy. It's not like a bajillion Gucci bags or Louis Vuitton bags, but it's kind of more in the, I don't even know, one step down from that, right? But then-
Lizzy: Yeah, like a Coach or that kind of thing?
Lissa: Maybe above that.
Lizzy: There's tiers, right?
Lissa: Yeah, there's tiers.
Lizzy: There's levels. There's always a list.
Lissa: That's what I wanted to get to also. There's tiers. So anyway, so she has a handbag collection and she loves it. I can only guess what her reasoning is for it, but maybe she just loves the design. There could be so many reasons for liking it, but how that translated to me became, I'm fighting because for the first five, seven years of my career, I was broke, broke living paycheck to paycheck, but I'm struggling because I also want to have nice things...
Lizzy: And keep up with The Joneses a little bit.
Lissa: ... but not really understanding why I wanted to keep up with The Joneses.
Lizzy: Sure, yeah.
Lissa: So I used to work at an office in Beverly Hills, and this is when I was driving my 2004 Honda Civic, really great car. Loved that car. I had this 2004 Honda Civic, and then 10 years later, I was still driving it and it was great. It was going to last me a very long time, but I happened to have to park in this parking garage in Beverly Hills, where literally every car was a Lambo, a Porsche. And I'm like, "Huh, okay, whatever." Sometimes I would tell myself, "Whatever, who cares?" But then sometimes, I'd be like, "Dang, It feels like I don't belong here."
So when I finally saved up money for another car, I'm like, "No, I'm going to get a Mercedes or a BMW, at least." That was my next level up. And so, I ended up buying a Mercedes. I bought it used, but it was basically a year old. So it was great. And so, I had that Mercedes, I still have that Mercedes to this day, 10 years later. And then, the car I bought after the Mercedes was a Honda.
Lizzy: Right. Yeah, you went back.
Lissa: It's like I went back but then-
Lizzy: You went back.
Lissa: Yeah.
Lizzy: But it's a nice car. It's a really nice car.
Lissa: It's a very nice car. And so anyway, it makes me think of why did I think I had to buy a Mercedes at that time in life when I worked in that geographic location?
Lizzy: Right, you know what? I get it though, because I'm kind of in that situation right now. So I have a car, a Subaru Crosstrek.
Lissa: Subaru, yeah.
Lizzy: It's 10 years old or will be 10 years old in December. It was the first car I really bought for myself that I wanted and chose. And at the time, I just liked the design of it and kind of the active association with it. It's been an amazing car. It's going to run forever, knock on wood. It's the worse for wear after 10 years, but it still runs great, but I'm now considering what does it communicate about me? And I've felt that feeling.
Recently, I went and I did a little work session at a luxury hotel, which we'll talk about my love of luxury hotels, I worked by the pool that day and pull up to valet or whatever, and there's crazy cars parked in the valet and then, they pull up my little dented Crosstrek, and in my head I'm like, "You all don't know, I can run with you all, but my car doesn't express that about me."
Lissa: Yeah, and they might not even notice you and you, you're like, "Hello, I need valet, I need parking, right?
Lizzy: Right. Isn't that interesting? And it can actually, there's some scenarios where I've gone to meetings and been like, "Oh, oh, shit. Maybe I shouldn't valet."
Lissa: Well, yeah, you're like an executive out of investment fund.
Lizzy: Right, I'm an executive. And so, I don't want to communicate that I'm poor because that makes it look like I'm not good at what I do.
Lissa: But you're just, you value different things.
Lizzy: Exactly.
Lissa: But now that you know it... Yeah.
Lizzy: But people don't understand that, and that has been my personal relationship with luxury brands of, I reject it because you know me, I am big on not letting people put their perceptions on me.
Lissa: Right. Okay. But what if someone came in right now and they had a suitcase full of brand new luxury clothing, Prada, Balenciaga...
Lizzy: Sure.
Lissa: ... even, Louis Vuitton, whatever, and they're like, "You can have this for free." Would you wear that stuff?
Lizzy: Sure, sure, sure, sure. Yeah. But for me, it's been a thing of one, there was definitely a price thing. And to give some context, I have always been super interested in fashion since I was a little kid digging into fashion magazines. I wanted to go to fashion school. So the appreciation has always been there. I was also broke. And so all rock a Target T-shirt the same way I-
Lissa: And make it look cool.
Lizzy: Yeah, exactly. But I think it was more the contrarianism in me of being like, "Fuck off. I don't need this to look good or to have that communicate something about me. How dare you try to put that on me." And now I recognize, sure, there's an element of that, but also this is just the way the world works. You can try to communicate what you want, that doesn't mean that's how people will perceive it, and you only have so much control and there's value and understanding that and not just blindly rejecting it.
Lissa: Right And so that goes, I guess, both ways because it's like I think many people in lower income ranges who really want the luxury are probably more, and this is just an assumption, this is what I think, that they're probably more in the boat of where I was and my upbringing where it's like, "No, it's so nice and it'll... Even if it's subconscious, it'll show people...
Lizzy: My value.
Lissa: ... my value. I belong here. I can earn and purchase these types of things just like anyone else. It says something like that. And there's that, that's fine as a standalone thought and feeling, because everyone has their own lifestyle choices. You can do whatever you want, but when it doesn't align with your bank account, your net worth, your ability to purchase, that's when it can actually hurt you in the long run.
Lizzy: Right, and then there's kind of cultural components of this where it almost becomes predatory, the obsession culturally with brands amongst people who can't afford them. And so, you have to put on to belong, and it can be to your detriment. We've all seen stories and examples like that, which is crazy because at the end of the day, the branding, what is masterful about it is that it speaks to your underlying human needs for belonging and for power and for status, and there are these different archetypes that brands use to communicate to their audiences.
Almost all luxury brands, like traditional luxury brands, fall into what's called the ruler archetype, and it is very authoritarian. It's basically saying, "This is what is cool, this is what is valuable." It is not a warm and fuzzy accessible brand. It is inherently standoffish and exclusive and kind of just like when someone's playing hard to get, it makes you want it more, right?
Lissa: Yeah.
Lizzy: It's the chase, it's the unattainable. And to your point, they're very aspirational. They put out this advertising that portrays an incredible lifestyle that portrays success, sex, wealth, all of these things that...
Lissa: We like and we value and we want. Yeah.
Lizzy: ... people want. And that's normal. It's human nature to want those things to be cool, to be valued for who you are, that's normal, but they associate it with spending lots of money on goods.
Lissa: Right. Right. So obviously, yeah, that's predatory depending on who it's being marketed to...
Lizzy: For sure.
Lissa: ... who's being targeted because no one's, at the end of the day, forcing you to go into one of these...
Lizzy: Not at all.
Lissa: ... fancy expensive stores and swipe your credit card. There's an element, there's two pieces, what's being marketed and sold, the idea of it, and then there's an individual's ability and agency to accept or reject that. And only the individual, only we know what we can afford or not really.
Lizzy: Right. You know what that makes me think of, this is kind of a tangent, but that intersection of race, class, subculture and luxury brands, so thinking back to the '90s when hip hop culture started wearing Tommy Hilfiger...
Lissa: Oh yeah.
Lizzy: ... and it was controversial, and there are brands that historically have said, "I don't want to be associated with this group of people or this subculture. That's not our identity. That's not who we are." And first of all, how fucked up is that? But then there's this other thing of reclaiming that...
Lissa: Reclaiming it, mm-hmm.
Lizzy: ... and saying, "All right, sure, but we don't do it anyway."
Lissa: Yeah. But that's the crazy part about let's say rappers or celebrities who are like, "I can afford it now, so I'm going to do it anyway. I'm going to rebel." But then the flip side is I'm supporting your brand.
Lizzy: Exactly, exactly.
Lissa: So it's like the money's still going to go to you anyway, but at least I'm proving to you that you can't tell me what to do.
Lizzy: Right, which I think is why later in that evolution we started to see more ownership in those brands like Ciroc or black-owned brands like Telfar. You're starting to see these emerge and gain so much popularity because you're not supporting this old historical brand that didn't necessarily want you.
Lissa: Right. So this is more of a philosophical question, but who decides that you are luxury brand, right? Because you can't just come out the gate saying, "I'm a luxury." I mean, you can market yourself like that, but if the people don't think you're luxury...
Lizzy: Yeah.
Lissa: ... you're not luxury.
Lizzy: Well, so I would say there's a few elements to this, in terms of fashion, I mean, it's definitely the kind of fashion world. At the end of day...
Lissa: If someone's wearing-
Lizzy: ... it's like Anna Wintour.
Lissa: Yeah.
Lizzy: Vogue.
Lissa: If they're wearing you at the Met Gala...
Lizzy: Exactly.
Lissa: ... if they're, yeah.
Lizzy: It's about who's going to rock it, but the first and most simplest is price point. If you are luxury brand, you have a high price point and then, there's other things that communicate luxury, so things like simplicity and minimalism, quality of materials. Most luxury brands have the same exact style font in their logo. They have black and white color palette. There's a certain style of photography. So there are things that are really unconscious to most people that make you think something is expensive.
And then, even beyond just fashion brands, there's a certain experience. There's an experience on their website, there's an experience in their store. So the merchandising and the luxury fashion brand, their store, is going to be way different than in Forever 21. There's going to be fewer items. They're going to be more spread out. The lighting is going to be different. The smell is going to be different.
Lissa: It's going to be clean.
Lizzy: It's going to be really clean. It's going to feel like, "Oh wait, am I allowed to touch anything," versus stuff on the ground, hangers falling off. And so, these are all really carefully calculated and contrived experiences. Like many luxury brands, certainly luxury hotels, have their own custom scents created and pumped through their stores. They have very specific scripts and ways of training for how people can talk.
Nordstrom's, they're not high, high luxury, but they're famous for their customer service experience because of how they have cultivated an incredible training. Four Seasons is the same. They're like the pinnacle of how they set the standard. So the average employee at the Four Seasons has a budget of, I think it's up to $1000 that they can spend on a customer or a guest at the hotel, no questions asked, to make things right or to delight them, period. "Okay, you mentioned this in passing when I was bringing you up to your room. Sure, I'll do that up to $1000 without even-"
Lissa: Here's a complimentary boom.
Lizzy: Exactly.
Lissa: Here's a complimentary blink.
Lizzy: Creating this opulent...
Lissa: Interesting.
Lizzy: ... experience. And so, there's a lot of strategy that goes into that, that's keys in on our inner psychology and creates those perceptions.
Lissa: Well, I want to get into that because we've talked a little bit about luxury goods and fashion items, so clothing, handbags. So we've talked in previous episodes that Liz tends to be more on the frugal side. You're just a very intentional...
Lizzy: Definitely, yeah.
Lissa: ... smart spender, but one of your-
Lizzy: Man, my exception.
Lissa: Yeah.
Lizzy: So it's funny, having worked in branding forever, I'm not a brand person. The only logo pretty much you'll ever see me wear is Nike because I drink all the Kool-Aid on Nike in spite of whatever drama, but I'm not a luxury brand personally. It's never been something I valued. That said, where I will absolutely spend more money, without a doubt, is hotels. Hotels and experiences and that-
Lissa: So luxury experiences, but at hotels, [inaudible 00:25:34].
Lizzy: Yeah, I think hotels, it probably is broadened now, but that was the first point where I was like, "Oh, this is absolutely worthwhile to me." And I think I gained exposure to that through one of my jobs where I'm in this finance company where there's lots of money going down and every event we had, and I'm an executive, and it was like, "Okay, well, you're going to come down for the day. Stay at The Ritz."
That was like every event we had was at The Ritz and The Ritz in Dana Point, which is one of their most incredible hotels. It's beautiful. I've gained an appreciation for being in beautiful spaces. I've mentioned this before, my physical environment is really important to me in my mindset, my feeling of wellbeing, my feeling of peace or inspiration.
Like I mentioned, I wanted to go work on something that was really tedious, hard to motivate myself to do it. I'm going to go do it by the pool at a beautiful hotel. So that was my first type of thing. I was willing to spend more than the practical, bare minimum on and do it guilt-free.
Lissa: Yeah.
Lizzy: What about you?
Lissa: Well, first off, I stayed at The Ritz-Carlton. Me and Allan went in Dubai and, oh my gosh, it was like, because it was so hot in Dubai, the second I stepped out of the cab, there was someone there with ice water ready for me to drink. I was like, "Oh, thank God. You knew what I needed before I needed it." Someone walked us all the way to the elevator and I'm like, "Dang, you do this for every single guest?"
Lizzy: So I'm going to Cabo this coming weekend, and I saw a friend stay at this resort and it was so beautiful. It was wall to wall window, ocean view, and I was like, "I need to go there." And it's not five star, but maybe four star, it's high end, and in the week leading up to it, the concierge has been emailing me, "What type of experience do you want? What's your favorite drink? Do you want mojitos? Do you want coffee? How can we welcome you? What temperature do you like? Do you have any allergies," and coordinating, they listed 50 activities. "Do you want a tequila tasting? Do you want to go on a wave runner?" And crafting this experience that's above and beyond what I would've organized for myself, and it's just the level of care and attention that I really appreciate.
Lissa: Right. So I do think, earlier we kind of defined what luxury even means. There's elements of quality, of scarcity, of whatever experience even.
Lizzy: Absolutely.
Lissa: I think that I've, in the last decade, moved from a, like what I need it because I need to communicate to people that I belong here. I'm moving from that. I still know when a brand can influence people in that way and perception, and if it's going to benefit me, cool. I might buy into it, but I think I'm moving more into where I like quality is what I'm paying for.
Lizzy: Sure.
Lissa: Quality of service, of care, of craftsmanship, of-
Lizzy: Longevity, durability. Yeah.
Lissa: Yeah, longevity. That's kind of why, and I don't know how jewelry fits into this either, but I moved from always buying a bunch of fashion jewelry to maybe four years ago, I was like, "My New Year's resolution is to buy only fine jewelry." The reason being because it kind of sounds silly because usually people make New Year's resolutions to save money, but mine was actually to technically spend more per item.
Lizzy: Right but long-lasting pieces, right.
Lissa: Quality. Yeah.
Lizzy: I remember this.
Lissa: So the shift was because I was like, I buy this fashion jewelry and cool, I can buy more quantity, but after two, three years, it's all rusty...
Lizzy: Hell yeah.
Lissa: ... and I can't wear it anymore or I could wear it, but then I'd look like a fool, but then I was like, "No, I want to start building up my collection of fine jewelry of actual gold that will last my lifetime, as long as I don't lose it. And so, I made that shift. So to me, that I guess luxury move, there's no brand here. People can't see if my earrings are cubic zirconia or diamonds.
Lizzy: But it's something for you to know.
Lissa: It's something for me to know and for the longevity of it.
Lizzy: So this is really funny and I have something embarrassing to say.
Lissa: What?
Lizzy: So first of all, I remember that distinctly, and that is in my head every time I buy jewelry because of you.
Lissa: So now you buy fine jewelry?
Lizzy: I hear and there, buy fashion jewelry, but here's why, so one thing I know about myself is that I am hard on things. I am super clumsy. If someone is going to spill on themselves, it's me.
Lissa: Yeah.
Lizzy: If someone is going to fuck up their jewelry, it is me.
Lissa: Yeah.
Lizzy: So there's this balance for me of like, "Well, I could mess up something expensive because it is inevitable, or I could not, right?" So hoop earrings, I wear lots of hoop earrings, they do not last. I will always lose one without a doubt. I've bought several nice pairs and I always lose one. So now I'm like, I'm going to buy the cheapest shit because they have to be replaceable.
When I went to Paris earlier this year, it was a great experience for me. I was going through a challenging time and I'm like, "I want to buy myself something nice." I bought myself a diamond ring, really, really beautiful, not cheap at all. Within two weeks, a diamond fell out. This is my life, girl. This is my life. And now I don't wear it. I bought it to wear it regularly. I purposely bought the style so that it wouldn't be sticking out. I could wear it regularly. I lost a diamond within two weeks.
Lissa: Oh my gosh.
Lizzy: That's a challenge.
Lissa: Yeah. So I mean, that's something you have to think of too, is what we started the episode with of, you have the set amount of money, you can buy fewer goods that are supposed to be higher quality, but you're going to have fewer, or you could buy more to, and that's an insurance policy, you lose one, you'll still have 99 others.
Lizzy: Right. You got to know yourself. Will I ever buy Ray-Bans? Hell no, because I go through sunglasses, they break, I leave them somewhere, I lose them. It's just a silly proposition for me.
Lissa: Right, right. Which is funny because I wanted Chanel sunglasses for so long, and finally Allan knew I wanted new sunglasses, he got me a gift card last year, so I went and got Chanel sunglasses, but then the gift card only covered half of it. So then I got them, and within three weeks or so, there's a scratch on it and yeah, I can take it in to get it fixed, but.
Lizzy: Yeah, some high-end brands have...
Lissa: Have that built in.
Lizzy: ... have that built in, which is worthwhile, and that's something I would consider.
Lissa: Right.
Lizzy: For clothes, I'm moving up for sure, and the quality that I spend my money on, but it's a line for me personally because I just know that I'm hard on stuff.
Lissa: Well, so for someone who's deciding if this luxury thing is worth it for them, that's really people needing to build the skill of doing a cost benefit analysis because...
Lizzy: For sure.
Lissa: ... yes, here's the cost, here's the financial dollar cost, and what am I getting in return? It can't just be, "Oh, I'm getting a Gucci bag in return and that's worth it because Gucci is Gucci." No, let's dig into that more. What does that do for your life? Does it-
Lizzy: And it's okay that it to be because I like it.
Lissa: Yeah, I know.
Lizzy: That is absolutely okay.
Lissa: I said that all judgy, but no...
Lizzy: No. There's nothing wrong with...
Lissa: ... you can do it because you like it.
Lizzy: ... I like it. I want it. It makes me happy.
Lissa: Mm-hmm. Yeah.
Lizzy: Hell yeah. More power to you. But sometimes there's some deeper stuff that is worthwhile to explore.
Lissa: Yeah, and I mean, if we go back to the topic on if that means so much to you of liking it, does that mean more to you than not being able to pay your rent or something? What does it [inaudible 00:33:44]?
Lizzy: Yeah, or saving for it, right?
Lissa: Mm-hmm.
Lizzy: If you see something and you're like, "Oh gosh, I want that so bad, so I'm going to put aside, or I'm going to sacrifice this other thing that it's still within my power to do, but knowing I'm making a sacrifice?"
Lissa: Yeah.
Lizzy: Great.
Lissa: Smart trade-offs, smart...
Lizzy: Absolutely.
Lissa: ... quick analysis, then cool. At least you know that you have agency in the decision as opposed to buying it because we've been fed all these messages to buy luxury.
Lizzy: Absolutely.
Lissa: I think that's the big differentiator...
Lizzy: Yeah, completely.
Lissa: ... why it's important.
Lizzy: Yeah.
Lissa: Right?
Lizzy: I think so.
Lissa: Yeah.
Lizzy: All right, so tell me about this handbag right here.
Lissa: So this handbag, this is my only Gucci handbag I own. It was a hand-me-down. I didn't pay for it. And so the funny, interesting story that I have is that...
It's story time.
Lissa: ... throughout my life, handbags have been a symbol of where I'm at in life financially because it's a gift that I give to my mom on certain occasions. So her birthday, her birthday's in March, Mother's Day is in May, and then you have Christmas. So there's all these occasions, and there was a good stretch of my career where I was making more every year and I'm like, "Okay, I can afford a nicer gift from my mom." So I would graduate from buying her Coach to Tory Burch or going up the ladder.
Lizzy: Up the luxury ladder.
Lissa: The funny part is, a couple years ago, basically, I gave myself a pay cut because I decided to...
Lizzy: Sure.
Lissa: ... take a leap from my career. And then, so it's like you can't go backwards from there. So it's like-
Lizzy: Well, you felt.
Lissa: oh, yeah, yeah, I felt that I couldn't-
Lizzy: You put a lot of pressure on yourself.
Lissa: Mm-hmm. But then I realized, I don't think that's what matters to my mom is the brand name or me getting her a purse every single occasion. I think for her, it's the thought, because she values handbags, she values style and design. So if we go shopping together and we point out what we like and what we don't like, it's not always attributed directly to the brand or the cost.
And so, that was something I've had to learn over the years is it's not just, you don't have to keep up with the Joneses forever and keep chasing forever. You can pull back, you can stop, you can pause, and then maybe in five years from now, I'll have a Birkin bag. I don't know. Anything can happen.
But interestingly, I think this purse was actually one that maybe my sister gifted my mom, and then my mom holds onto most of the ones she has, but it's not like she's ever going to sell them or she doesn't really know what she's going to do with them and she doesn't even go out to use them. It's just the fact of having them as a collection...
Lizzy: Sure, sure, sure.
Lissa: ... which we're going to get to in another episode...
Lizzy: Don't talk about it.
Lissa: ... we're going to talk about collections, but I don't remember how it happened, why it happened. I think one time mentioned like, "Oh, I've never owned a Gucci bag." And so my mom was like, "Oh, I'll give you one. I don't even use it anymore."
Lizzy: Oh, that's cool.
Lissa: I was like, "Cool." So I can gift her things. And then...
Lizzy: Then you give them right back.
Lissa: ... a couple years later I was like, "Oh, I've never had a."
Lizzy: So okay, two things I want to touch on. One that there is something to that with certain luxury goods, like watches for example, or definitely some handbags where they hold their value and they have that heirloom quality where you can hand them down and sometimes they grow in value. So that's something we'll touch on more in our episode on collecting.
Lissa: Right, but I like that you brought that up because I think part of people's cost benefit analysis, sometimes makes the assumption that something will hold value and has value, but the fact of the matter is, if you buy something and you don't have that intent, it's almost like you can't even include that in your net worth, because it's a liability. It's something you've purchased to consume for yourself...
Lizzy: Interesting.
Lissa: ... as opposed to purchasing it as an investment.
Lizzy: Right? Yeah. One of the things I want to bring up on that too is that that is by design. So the fact that this Gucci print has not changed or that there is this kind of timelessness to these designs for many of these brands that the BMW model changes incrementally year over year, that is on purpose, so that they hold value so that it's really hard to know what time period that they're from. And so, that it's not a trend, it is this longevity of value, of perceived value that is very strategic.
One more thing I wanted to bring up that I really love is that combination of high-low. So that's something I appreciate in people. I actually just saw something on Instagram this morning, this fashion influencer that I follow, and she was talking about pairing a $7 dress with $400 heels, and I love that, right?
Lissa: I love that too.
Lizzy: There can be value in certain more inexpensive goods or you just like this style or even maybe it's more trendy, and so you don't want to invest as much in that specific trend and then pair it with something that has that longevity and kind of mix that up.
Lissa: I love the, I think you can find them on Pinterest or Instagram, but people will do, here's the look, the fashionable luxury look, but here's the Target version or here's the-
Lizzy: The look for less.
Lissa: Yeah, here's the look for less.
Lizzy: Oh my God. Do you remember that show?
Lissa: There was a show?
Lizzy: It was on E-Network. I was obsessed with it. I think it was Elisabeth Hasselbeck. This was a whole show.
Lissa: Now, I basically remember it.
Lizzy: It's in the early 2000s.
Lissa: Yeah.
Lizzy: The Look For Less.
Lissa: Okay.
Lizzy: 100%.
Lissa: Basically that. Yeah. Well, all right, 20 cents?
Lizzy: 20 cents.
Lissa: 20 cents is the segment of the show where both Lizzy and myself, Lissa, each get 60 seconds to give our 2 cents on today's topic, whether it's a net positive or a net negative. And today, we're talking about whether or not luxury brands are worth it. Where does 20 cents come from?
Lizzy: Because you get the opinion of two dimes. Two dimes, you all.
Lissa: All right, Liz, you're up first. Are luxury brands worth it? You got 60 seconds on the clock.
Lizzy: Damn, this one's kind of tough for me because I don't buy a lot of luxury brands, hardly any in terms of fashion and my day-to-day life. I haven't historically put a lot of value on them, but as I mentioned, I'm looking towards my next car and I think it will probably be a luxury car. And certainly, in terms of spaces, my next apartment will be a high-end apartment.
I love luxury hotels, so I'm going to answer this in terms of experiences and my version of what I appreciate, and in that regard, I think it's absolutely worth it for those things, for what I value, my version of it. So net positive, I guess.
Lissa: Net positive.
Lizzy: That's a weird one.
Lissa: Yeah.
Lizzy: I never thought I'd be net positive on that.
Lissa: Yeah, I didn't think you would be either.
Lizzy: I'm kind of middle ground, depends on what it is, but we'll go with net positive.
Lissa: It makes me feel better. I have no idea what I'm going to write right now.
Lizzy: Girl, what you going to say now? You got one minute.
Lissa: This is a tough one for me. I like that you brought up the fact of what luxury means to you because I've mentioned it in the episode, what it means to me. When it's associated with quality and a higher level of experience, and typically with hotels, even flights and things like that, I associate it with comfort. Comfort, more space, cleanliness.
So when it's quality, comfort, cleanliness, I think definitely net positive, and if we want to get nuanced when it comes to brands to wear, I think at the moment, I'm neutral, but it will always be according to what my income level is.
Lizzy: Sure.
Lissa: I won't overspend for luxury if I can't currently fit it into my budget, but I think that that makes me still, I think, a net positive.
Lizzy: I like that answer. I like it a lot. And one thing that brought up for me is luxury of time, which we will be talking about on a future episode, the idea of living a luxurious life independent of buying anything.
Lissa: Yeah. I'm surprised we didn't get into this episode, but I feel like...
Lizzy: We'll save it. We got that coming up.
Lissa: ... that's an own episode, for sure.
Lizzy: We got that coming up.
Lissa: Well, remember, this is what we think at this moment in time. We are both net positive on luxury brands.
Lizzy: Yeah.
Lissa: I didn't expect that.
Lizzy: Not at all.
Lissa: So what do you think, are luxury brands worth it?
Lizzy: Hit us up. Let us know what you think. DM us on Instagram at netnetpodcast or email us at hi@netnetpodcast.com and if you want to follow us individually, here's where you can find us.
Lissa: I'm at Wealth for Women of Color on TikTok, YouTube and Instagram.
Lizzy: And I'm at live_well_lizzy on TikTok and Instagram.
Lissa: All references, statistics and resources mentioned can be found in our show notes. This podcast is for educational, informational, and entertainment purposes only, and should not be constituted as financial advice. Remember to always do your own research, consult a professional as needed, and feel empowered to make your own damn decisions.
Lizzy: Cool shit.
Lissa: Yeah.