If you’ve ever ventured onto the financial side of TikTok (also known as FinTok), you may have left with some convincing advice on what to do with your money.
However, financial experts warn that advice that bags can replace more reliable and accessible traditional investment tactics is nothing short of misleading and could be dangerous for those without the proper knowledge.
“Shopping doesn’t always have to be a horrible decision [or] a horrible use of your money,” Lapuerta tells Fortune. “Caring about fashion and luxury is not a stupid thing. It’s a very smart thing, and here’s the information that I want to give you so that you can understand it.”
With a background in consulting and data science, she admits equating luxury fashion to smart investments always raises eyebrows—especially considering the world of investment has always been male-dominated. Take for example, two of her posts:
While the posts drew scrutiny in the comment section due to a lack of proper context on the differences in barrier to entry and liquidity of the stock market versus buying a luxury good, Lapuerta says she finds it important to help people understand that fashion is something that has investment potential.
“When you really break it down, young people are very interested in investing,” Lapuerta tells Fortune. “There’s so much uncertainty in the world. People do want to make sure that they’re making smart decisions, and then being able to just say it very simply, like, this bag appreciates this much in value.”
But she too says having a diverse range of investments is important.
“I understand there’s traditional channels. I have a great savings account that gets me interest. I invested in the S&P 500; I think that’s smart.” Lapuerta says. “There’s so many smart ways to invest your money, and by no means telling people that the only way you can do it is with a Birkin bag.”
There is a laundry list of caveats behind buying or “investing” in luxury goods that often go untold.
First is that the value of a product is all dependent on the whims of fashion trends—which could change overnight through a celebrity endorsement or viral video. For that reason, it’s entirely unclear if Birkin bags, for example, will be worth any money in a decade—or if you can find anyone to buy it (and believes it’s not a knockoff). And since the condition of a product is paramount, investing likely means you may never even get to use it for yourself—rather just let it sit in a closet.
Moreover, buying new luxury goods is actually much more complicated than one might expect; instead of just showing up in the store to make a purchase, relationships often have to be cultivated—leading to most “investors” buying on the resale market anyway.
On Rebag, certain items are labeled as “Investment Piece[s],” which Layne says indicates that the style has exhibited “consistent value retention, historical appreciation, and strong resale demand,” and adds that luxury goods can be a “savvy complementary asset in any diversified portfolio.”
“Designer bags, particularly from brands like Hermès, Chanel, and Louis Vuitton, are among the least volatile collectible assets and have some of the lowest correlations to stocks,” Layne tells Fortune. “This can be especially important in uncertain economic times.”
“While social media can be an amazing tool, don’t let it be your Bible,” Kiel says. “You don’t know what people are motivated by or what endorsements are coming from. And so you’ve really got to take that with a grain of salt.”
By the time a “new” investment tactic pops up on your feed, millions of others have probably beat you to it.
“If you heard about the latest greatest investment at a cocktail party, you probably already missed it,” she tells Fortune.
“It’s best to approach life with the philosophy that there is no such thing as a get rich quick scheme, because there isn’t,” Kerner tells Fortune. “Of course, there are those outliers that got rich quick by winning the lottery or somehow managed to time the crypto market appropriately, but for the rest of us, it’s a terrible strategy. The only way to get rich is to get rich slow.”
“The younger you are when you start this journey, the longer your runway is, and the more wealth you’ll generate.”
