Personal Finance
Are designer handbags an actual investment? Here’s how returns stack up
Luxury handbags have outperformed other collectibles in recent years and are increasingly viewed as a potential investment category in the eyes of consumers and analysts, at least according to some recent reports.
For the first time, the value proposition of designer handbags from top brands, such as Hermes, Chanel, Goyard and Louis Vuitton are growing across the board, one report by luxury resale site Rebag found last year.
“These trends signal exciting investment opportunities across both heritage and more attainable brands,” the Rebag report said.
Handbags are among the least volatile of any collectible asset and offer a good risk versus reward, they have also proven to be a worthwhile hedge against inflation, according to a separate 2022 study by Credit Suisse.
However, while some designer handbags, particularly classic and sought-after styles, can potentially retain or even increase in value over time, they are not a traditional investment in the way stocks or real estate are, expert say.
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Over the last two decades, luxury handbags went from being an accessory to what is now “the only female-centric collecting category,” according to a 2020 report by Art Market Research.
For women, however, the evolution of such increasingly expensive purchases has come at a price, said Jasmine Tucker, the National Women’s Law Center’s vice president of research.
“In order to appear that you are in your place, you have to look a certain way, and that grooming can cost more for women, and they are doing that at a lower pay,” Tucker said.
A Hermes Birkin bag in a window display at a KaDeWe department store in Berlin, Germany, on Friday, Jan. 3, 2025.
Bloomberg | Bloomberg | Getty Images
As far as investments go, only a few luxury bags gain, rather than lose, value over time.
Historically, just the Hermes Birkin and the small group of other top designer bags have value retention rates near 90% or higher, Rebag found.
Birkin bags, especially, have increased in value year over year, with an average annual jump in value of 14.2% between 1980 and 2015, according to another study by Baghunter. The bags currently retail for $9,000 and up but can resell for $30,000 or more, depending on size, color and condition.
Meanwhile, since stocks go up and down, the S&P 500 index has an average annualized return of around 10%.
A bag may be a ‘smart purchase,’ not an ‘investment’
Framing a designer handbag as as “investment” does women a disservice, according to Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida.
“It grosses me out when I see purchases positioned as investments, it hits me the wrong way,” McClanahan said.
“I am totally for people buying nice things, but I wouldn’t call it an investment,” said McClanahan, who also is a member of CNBC’s Advisor Council.
“If you have a handbag you know you will keep forever, maybe that could be considered a smart purchase,” she said. “But you still need to make sure you are spending less than you make and you are saving.”
At some point in their lives, most women will likely be on their own and solely in charge of their finances, McClanahan said, that makes it more imperative that women are planning and investing for the future.
A Fidelity Investments branch.
Nicholas Pfosi | The Boston Globe | Getty Images
Limited ability to trade in a big market day
The brokerage’s login issue may have been a greater problem for day traders, institutional investors and options investors, or investors who want to buy at a certain price before the market jumps, said certified financial planner Lazetta Rainey Braxton, the founder and managing principal of The Real Wealth Coterie.
Not having access to their brokerage accounts during big market swings can hurt their strategies because they are actively managing their portfolios, said Braxton, a member of CNBC’s Financial Advisor Council.
But for long-haul investors, a login glitch that lasts a few hours might not make a huge difference, she said.
“Most investors are not chasing the market,” Braxton said.
‘Remain calm’
Technical issues at brokerages have happened in the past. In August, customers of Charles Schwab and Fidelity Investments were unable to trade in the middle of a steep market sell-off of global equities.
If a blip like this happens again, “it is important for investors to remain calm,” said Carolyn McClanahan, a certified financial planner and the founder of Life Planning Partners in Jacksonville, Florida. She’s also a member of CNBC’s Financial Advisor Council.
While it can be a grievance at the moment, such technical difficulties are temporary — “these outages usually don’t last long,” said CFP Cathy Curtis, the founder and CEO of Curtis Financial Planning in Oakland, California.
And besides, “tech outages will not affect the value of investments,” said Curtis, a member of CNBC’s Financial Advisor Council.
U.S. President Donald Trump takes a question from a reporter during a news conference in the Roosevelt Room of the White House on January 21, 2025 in Washington, DC.
Andrew Harnik | Getty Images
Why are borrowers now at risk of wage garnishment?
How much of my wages can the government take?
The U.S. Department of Education can garnish up to 15% of your disposable, or after-tax, pay, said higher education expert Mark Kantrowitz.
By law, you must be left with at least 30 times the federal minimum hourly wage ($7.25) a week, which is $217.50, Kantrowitz said.
When could the wage garnishments start?
The Treasury Department will send notices to 5.3 million defaulted borrowers about the collection activity of their wages “later this summer,” the Education Department wrote in a recent press release.
As soon as June, the Trump administration says it will begin seizing portions of defaulted student loan borrowers’ federal benefits when applicable, including their Social Security retirement checks. (Social Security recipients can typically see up to 15% of their monthly benefit reduced to pay back their defaulted student debt, but beneficiaries need to be left with at least $750 a month.)
What if I’m self-employed, or a gig worker?
It is more difficult for the federal government to garnish the wages of someone who receives 1099 income, Kantrowitz said.
“If there is no employer, wage garnishment can’t happen,” he said.
Can I challenge the wage garnishment?
Yes.
Borrowers in default will receive a 30-day notice before their wages are garnished, a spokesperson for the Education Department told CNBC.
During that period, you should have the option to have a hearing before an administrative law judge, Kantrowitz said. The Education Department notice is supposed to include information on how you request that, he said.
Your wages may be protected if you’ve recently been unemployed, or if you’ve recently filed for bankruptcy, Kantrowitz said.
Borrowers can also challenge the wage garnishment if it will result in financial hardship, he added.
What should I tell my employer?
Most employers will already be familiar with the wage garnishment process, Kantrowitz said, “since this occurs for a variety of reasons, such as child support, alimony and unpaid taxes — not just student loans.”
Your boss is not allowed to terminate you because of the wage garnishment, Kantrowitz said.
How do I get out of default?
You can contact the government’s Default Resolution Group and pursue a number of different avenues to get current on your loans, including enrolling in an income-driven repayment plan or signing up for loan rehabilitation.
Some borrowers may also be eligible for deferments or a forbearance, which are different ways to pause your payments, said Carolina Rodriguez, director of the Education Debt Consumer Assistance Program in New York, in an earlier interview with CNBC.
“We’re advising clients to request a retroactive forbearance to cover missed payments, and a temporary forbearance until they can get enrolled in an income-driven repayment plan,” she said.
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