Is Buying Your Love a Diamond Engagement Ring Really A Good Investment?
Man (not to forget the ladies) has had an obsession with gold for hundreds and thousands of years, but diamonds are a relatively newly acquired taste. Like most gemstones and precious metals, diamonds come expensive as they are high in demand and relatively rare to find. But a diamond can be rendered worthless if the demand for it stops. It’s demand might stop else where in the world, but not for many young American men and women who wish to enter into the promise of marriage with a diamond engagement ring.
Why are we Americans spending thousands of dollars and much of our savings on a few tiny pieces of carbon? To quote Sheldon from the TV series The Big Bang “just because there is some carbon with their atoms stacked neatly, I cannot be expected to hand over thousands of dollars.” We feel you Sheldon, we feel you!
Diamonds – a Man’s best friend
For those who believe that diamonds make for a good investment, there are plenty of reasons for them to invest in it:
* They don’t take up room- unlike bulky gold or silver, diamonds are a small item and one can easily store diamonds worth $1 million and more in the smallest safes and vaults.
* They are durable- as one of the hardest substances known to man, we do not have to worry about it breaking, corroding or wearing off. We just need to be sure not to lose it!
* Inflation resistant- like real estate, gold and silver, diamonds generally appreciate with inflation but one key difference from the others is that diamonds are easily movable and more durable.
* Psychological factor- unlike stocks, shares and other financial investment tools, diamonds are physical; in that you can look at it, hold and even mount it onto jewelry to wear. It feels like a safer investment.
And this does make sense to us but there are some strong arguments against purchasing and investing in diamonds. One of them being that in the prime of most men’s lives when they are earning well and starting to save up, possibly for the future and retirement, many feel compelled to trade it all to get their beloved a diamond ring. Societal pressures and expectations dictate that every woman must be given a diamond ring if they are to get engaged. So what is a fella to do? Read on weary men…
Let’s not call diamonds an investment
This commonly believed myth floating around is that diamond rings, and diamonds in particular, are a good investment option. Well it was before the late 1800’s when they were rare to find and were mostly mined from few sources in India. But then man just went right ahead and found more diamond mines and that’s how diamond became more abundantly available in the market. So why is the price of diamond still so high? Blame it on the DeBeers Mining Company which have purchased practically all the diamond mines across the world and because of the monopoly they enjoyed, controlled its prices. Although this monopoly ended in 2001, prices still stay at those highs.
You’re buying a depreciating asset
Much like any car, diamonds are also a depreciating asset, as its value steadily decreases the second you purchase it. Now when we compare this to buying gold or silver, the market for them is highly fungible and liquid as it can be easily traded later on, stored as coins, or even sold quickly as there is always a demand for it. Gold and Silver cab actually act as a buffer against inflation as the cost appreciates and gold/silver gets costlier to buy. Sadly, that’s not the case for diamonds, as it remains to be a nearly non-liquid investment.
The heartache of selling a diamond
Did you know that there is a general 100% to 200% mark-up on the store prices of diamonds, and that a majority of the stores will not entertain buying back these stones from the people who bough it. Why? One of the reasons is that they do not want to make a small offer to the customer, as it would shatter the illusion that diamonds are a good investment. One industry expert illustrates this by pointing out that you may purchase a $2,000 ring from a retail jewelry store, but it’s resale value would only be worth $600.
So if you’re just a young couple, very much in love, you might want to reconsider shelling out a small fortune for a diamond ring, all thanks to DeBeers and their sky-high prices. In view of the pros and cons, when seeing diamonds as an investment, the cons definitely outweigh the pros. Yet, if you or your ladylove are into diamonds and bling, there’s nothing wrong in buying them in order to wear it as jewelry. Just, please don’t call it an investment!
These Powerful Couples Are Making It Big in Tech Industry and How!
The tech industry in the US has been thriving more than ever. By providing employment to 11.5 million workers, the tech...May 21, 2022
5 Signs of An Ideal Loan
How should the ideal lender and the ideal loan be like? Loyal and undemanding, distributing large amounts for a long period...May 20, 2022
What is the ‘Debt Snowflake Method’ and How Can It Help You Pay Off Your Loans?
Paying off debts can be really overwhelming sometimes – in case you feel this way, don’t worry, because you’re not alone. ...May 20, 2022
Looking Beyond Credit Card Interest Rates
Interest rates are the first and most important thing to consider when in the market for a credit card. After all, you...May 20, 2022
These Crazy Confessions by a Real Estate Agent for the Stars Will Shock You
To really know a celebrity, you have to be inside their house. Dolly Lenz, has been in real estate for over 25...May 15, 2022
How to Get the Lowest Rate on a Car Loan
So you’ve already done your research, test-driven a few cars, negotiated a great price, and maybe even made your choice amongst...May 15, 2022
Matt Lauer Sells His $44 Million Hampton’s Beach House Property after His Firing
Matt Lauer, the disgraced Today anchor hopes to offload his $44 million family home where he had been living after being fired from...May 15, 2022
Airline Tickets: How to Save Money on Them
If you aren’t acquainted with how flight tickets are priced and the explanations behind them, they can be costly. There are...May 14, 2022
We Bet You Had no Idea That These Celebs have Giant Real Estate Empires
What can a celebrity do when they are making more money than they can normally keep track of? Invest in property and buy...May 14, 2022