I was indulging in my morning blog reads when I came across a couple of posts that referenced ‘investment pieces’ for this Fall/Winter season and then it hit me – what is an investment piece ? was it really a worthwhile investment? what makes something an investment piece?
See above item details (here
We commonly use this term to define items we are willing to spend a little bit more money on, but I wanted to dig a little deeper. A term can become so overused that its steers far away from its true meaning. So what’s the definition of an investment – a thing that is worth buying because it may be profitable or useful in the future – plain and simple? Nah, that definition was not enough for my curious mind so I thought to myself – should a clothing investment be treated just like typical investment? I instantly went for a no answer because clothing is not a real investment. I say real investment because despite what society has taught us, consumer purchases are the total opposite. For example, if you tried to take that $600 jacket to Crossroads tomorrow, with the tag still on, you would probably only walk out with a 100 bucks. A worthwhile investment would fall into the categories of ownership, lending, and cash equivalents – they do not decrease in value they increase.
Ok, yes, clothing is not an investment but we all are guilty of thinking they are. To keep this post realistic I decided to scratch all the technical definitions and put together a guide to help you buy your next investment piece the right way. If we are going to call clothes, bags, and shoes investments then we should really treat them as such. You would not log onto E•trade and randomly pick a stock to invest in because you were bored, so do not pick your investment items that way either.
Here the 4 things you need to consider before you choose your next investment style purchase-you will possibly save yourself a couple hundred bucks.
Your Goals– Are you really like really into fashion or is this just a phase for you? Are you building a wardrobe you can pass along to your children? Do you actually care about clothing qualities and not aesthetics alone? Your goals should be the first thing you consider before spending hundreds of dollars. If building a wardrobe is truly something that falls into your life goals someway or another then I would say it is reasonable to spend a little bit more on what you want.
Risk– What is the risk you will lose money on the investment piece? In other words, is the item of good enough quality that it will last a while? Is the item so expensive it will get stolen? Is the coat material so delicate even rain would ruin it? Anything that can have you looking at the item like ‘I can’t believe this happened’ would be a risk. Choose an item you know will be safe according to your means.
Volatility– Can you wear the item every month out of the year? Will the investment go out of style in a few short months after a popular spell to come right back out of nowhere? Volatility refers to how much and how often something changes (specifically financial instruments).
Expected Return– How much do you expect to get from the item per year? Will you be able to wear the investment for years? If you are able to look at a piece and say ‘I would wear this 5 years from now and still be great’ your expected return is on the high side. The greater the return the greater the risk, and for our purposes this would translate into high cost or even high likelihood of theft from a local hater.
See what I did their? You just learned how to choose your real investments while possibly saving money on clothes. Each of the four points above are key to choosing your next stock investment, loan, or property purchase. Each of these four points also tie into formulas which would give you the best type of investment for your situation, so please if you are using these steps to really invest (real investments) use them as a starter guide and do a lot more research. For clothing purposes, if these points are looking good for you then it’s a good investment – go ahead and BUY.
I will close with a few thoughts
• Financial constraints are real – consider before investing • Never put all your eggs in one basket • Your money should be working too • You make the clothes, they don’t make you •