- As Gen Z turns to social media for financial advice, luxury handbags are being touted as the next big asset class. “When a man tells you to invest in the stock market but you know Hermès Birkin bags give you a better return on investment,” one influencer says. But experts aren’t so sure.
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.
Amid the sea of information, you may even find eyebrow-raising ideas of how to outperform the S&P 500. For any seasoned investor, that’s a tough sell—especially in today’s rocky market. But for Gen Zers who might not know any better, the idea is intriguing, and it’s led to an influx of young women in particular who have been told that investing in luxury fashion goods, like the Hermès Birkin bag, might be a better bet than tried-and-true investments.
“Whoever says handbags aren’t an investment are lying,” one TikTok user posted. “What I’m holding in my hands (an Hermès Birkin bag) is undoubtedly a better investment than the S&P 500, stocks, and gold.” Another channel called Chanel bags the “best investment you can make.”
It’s true that some luxury goods have had jumps in value; according to Sotheby’s, the 40-year compound annual growth rate of a Birkin bag is 5%. In 2024, the Sellier Birkin bag saw a 52% year-over-year increase, according to Elizabeth Layne, the chief marketing officer at Rebag—a luxury resale company. On another site, The RealReal, the Birkin is selling for an average of 34% above MSRP—up 11% compared to last year, says the company’s associate director of fashion and strategic partnerships, Noelle Sciacca.
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.
Bringing data to fashion
The intersection of data and fashion is an area that Madé Lapuerta says is missing most from the conversation. Her Instagram account, Data but Make It Fashion, which now has over 500,000 followers, exploded in popularity as an avenue for Gen Z women to find interesting and easy-to-read analysis on the price changes of luxury goods.
“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:
“When the stock market is crashing but I’ve put all my savings into my shoe collection,” one post said, showing the resale vs. retail price of popular sneakers, like the Dior Air Jordan 1 High. “When a man tells you to invest in the stock market but you know Hermès Birkin bags give you a better return on investment,” said another, including a basic two-bar graph showing that the Birkin appreciated 24% more on average than the S&P 500 market in the last five years.
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 [I’m] by no means telling people that the only way you can do it is with a Birkin bag.”
A $10,000 investment 10 years ago in a S&P 500 index fund would now be worth over $30,000 thanks to compound interest. But for a Birkin, which had a starting price of about $12,000 in 2015, the investment return depends heavily on the bag color, condition, and demand. For example, Sotheby’s is selling two Hermès bags from 2015: one that’s on the market for $17,500 and another for $24,500.
The complexities of buying luxury goods
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, a buyer often has to cultivate a relationship—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.”
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“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.”
It’s also worth noting that Rebag reminds customers at the top of every page on its website that they can buy certain goods, including some costing over $30,000, using Affirm, a buy now, pay later company. Even though it may sound like a cheat code—buying an investable product even when you don’t have enough money right now—it could dramatically hurt some people’s finances for years to come.
The best investment advice? Stick to the basics, experts say
Allyson Kiel, a private wealth advisor at Synovus Bank, says most new and glamorous investment opportunities are probably too good to be true.
“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.
Noah Kerner, CEO of financial service company Acorns, says he follows the wisdom of billionaire Warren Buffett: “When people are greedy, be fearful.”
“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.”
Sticking with the tried-and-true basics—like saving more than you spend and maxing out your employer’s 401(k) match program—can lead to the greatest opportunity for gain, paired with having the least amount of stress, Kiel adds.
“The younger you are when you start this journey, the longer your runway is, and the more wealth you’ll generate.”
