Gen Z Women Are Being Sold A Risky Dream: The Realities Behind ‘Investing’ In Designer Bags Like The Hermès Birkin

 

• 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.

Among 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 office 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.”

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.”

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 Hermes 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.

Credit Yahoo