Diamonds are bullshit

jmuscatello

Yay, agreement, peace & harmony

my2hands

backseatLover12 said:

They really are. Nothing but a marketing scam created long ago. Spread this to all those young lovers out there.



American males enter adulthood through a peculiar rite of passage -- they spend most of their savings on a shiny piece of rock. They could invest the money in assets that will compound over time and someday provide a nest egg. Instead, they trade that money for a diamond ring, which isn't much of an asset at all. As soon as you leave the jeweler with a diamond, it loses over 50 percent of its value.

Americans exchange diamond rings as part of the engagement process, because in 1938 De Beers decided that they would like us to. Prior to a stunningly successful marketing campaign 1938, Americans occasionally exchanged engagement rings, but wasn't a pervasive occurrence. Not only is the demand for diamonds a marketing invention, but diamonds aren't actually that rare. Only by carefully restricting the supply has De Beers kept the price of a diamond high.

Countless American dudes will attest that the societal obligation to furnish a diamond engagement ring is both stressful and expensive. But here's the thing -- this obligation only exists because the company that stands to profit from it willed it into existence.

So here is a modest proposal: Let's agree that diamonds are bullshit and reject their role in the marriage process. Let's admit that as a society we got tricked for about a century into coveting sparkling pieces of carbon, but it's time to end the nonsense.

The Concept of Intrinsic Value

In finance, there is concept called intrinsic value. An asset's value is essentially driven by the (discounted) value of the future cash that asset will generate. For example, when Hertz buys a car, its value is the profit they get from renting it out and selling the car at the end of its life (the "terminal value"). For Hertz, a car is an investment. When you buy a car, unless you make money from it somehow, its value corresponds to its resale value. Since a car is a depreciating asset, the amount of value that the car loses over its lifetime is a very real expense you pay.

A diamond is a depreciating asset masquerading as an investment. There is a common misconception that jewelry and precious metals are assets that can store value, appreciate and hedge against inflation. That's not wholly untrue.

Gold and silver are commodities that can be purchased on financial markets. They can appreciate and hold value in times of inflation. You can even hoard gold under your bed and buy gold coins and bullion (albeit at a ~10 percent premium to market rates). If you want to hoard gold jewelry however, there is typically a retail markup so that's probably not a wise investment.

But with that caveat in mind, the market for gold is fairly liquid and gold is fungible -- you can trade one large piece of gold for 10 smalls ones like you can a 10 dollar bill for 10 one dollar bills. These characteristics make it a feasible potential investment.

Diamonds, however, are not an investment. The market for them is neither liquid nor are they fungible.

The first test of a liquid market is whether you can resell a diamond. In a famous piece published by The Atlantic in 1982, Edward Epstein explains why you can't sell used diamonds for anything but a pittance:

Retail jewelers, especially the prestigious Fifth Avenue stores, prefer not to buy back diamonds from customers, because the offer they would make would most likely be considered ridiculously low. The "keystone," or markup, on a diamond and its setting may range from 100 to 200 percent, depending on the policy of the store; if it bought diamonds back from customers, it would have to buy them back at wholesale prices.

...

Most jewelers would prefer not to make a customer an offer that might be deemed insulting and also might undercut the widely-held notion that diamonds go up in value. Moreover, since retailers generally receive their diamonds from wholesalers on consignment, and need not pay for them until they are sold, they would not readily risk their own cash to buy diamonds from customers.

Read more at http://www.huffingtonpost.com/rohin-dhar/diamonds-are-bullshit_b_3708562.html

i thought pretty much everyone knew this by now?

never bought a diamond and i never will

polaris_x

jmuscatello said:

Yay, agreement, peace & harmony

it has begun ... please give ample notice to the wedding date ... thanks

PJ_Soul

polaris_x said:

jmuscatello said:

Yay, agreement, peace & harmony

it has begun ... please give ample notice to the wedding date ... thanks

I have a feeling I'm going to be waiting a long, long time for my diamond engagement ring. :P

hedonist

This thread has turned hilarious. Well-done <:-P

polaris_x

PJ_Soul said:

polaris_x said:

jmuscatello said:

Yay, agreement, peace & harmony

it has begun ... please give ample notice to the wedding date ... thanks

I have a feeling I'm going to be waiting a long, long time for my diamond engagement ring. :P

sometimes those cold stares and eerie silence are really a way a guy says "i love you and i want you" ... haha

jmuscatello

polaris_x said:

PJ_Soul said:

polaris_x said:

jmuscatello said:

Yay, agreement, peace & harmony

it has begun ... please give ample notice to the wedding date ... thanks

I have a feeling I'm going to be waiting a long, long time for my diamond engagement ring. :P

sometimes those cold stares and eerie silence are really a way a guy says "i love you and i want you" ... haha

"and I can't wait to slip a diamond ring on your finger"
I am almost positive that the phrase "stony silence" came about to describe guys that are fixated on getting a diamond engagement ring on a woman's hand...

PJfanwillneverleave1

my2hands said:

backseatLover12 said:

They really are. Nothing but a marketing scam created long ago. Spread this to all those young lovers out there.



American males enter adulthood through a peculiar rite of passage -- they spend most of their savings on a shiny piece of rock. They could invest the money in assets that will compound over time and someday provide a nest egg. Instead, they trade that money for a diamond ring, which isn't much of an asset at all. As soon as you leave the jeweler with a diamond, it loses over 50 percent of its value.

Americans exchange diamond rings as part of the engagement process, because in 1938 De Beers decided that they would like us to. Prior to a stunningly successful marketing campaign 1938, Americans occasionally exchanged engagement rings, but wasn't a pervasive occurrence. Not only is the demand for diamonds a marketing invention, but diamonds aren't actually that rare. Only by carefully restricting the supply has De Beers kept the price of a diamond high.

Countless American dudes will attest that the societal obligation to furnish a diamond engagement ring is both stressful and expensive. But here's the thing -- this obligation only exists because the company that stands to profit from it willed it into existence.

So here is a modest proposal: Let's agree that diamonds are bullshit and reject their role in the marriage process. Let's admit that as a society we got tricked for about a century into coveting sparkling pieces of carbon, but it's time to end the nonsense.

The Concept of Intrinsic Value

In finance, there is concept called intrinsic value. An asset's value is essentially driven by the (discounted) value of the future cash that asset will generate. For example, when Hertz buys a car, its value is the profit they get from renting it out and selling the car at the end of its life (the "terminal value"). For Hertz, a car is an investment. When you buy a car, unless you make money from it somehow, its value corresponds to its resale value. Since a car is a depreciating asset, the amount of value that the car loses over its lifetime is a very real expense you pay.

A diamond is a depreciating asset masquerading as an investment. There is a common misconception that jewelry and precious metals are assets that can store value, appreciate and hedge against inflation. That's not wholly untrue.

Gold and silver are commodities that can be purchased on financial markets. They can appreciate and hold value in times of inflation. You can even hoard gold under your bed and buy gold coins and bullion (albeit at a ~10 percent premium to market rates). If you want to hoard gold jewelry however, there is typically a retail markup so that's probably not a wise investment.

But with that caveat in mind, the market for gold is fairly liquid and gold is fungible -- you can trade one large piece of gold for 10 smalls ones like you can a 10 dollar bill for 10 one dollar bills. These characteristics make it a feasible potential investment.

Diamonds, however, are not an investment. The market for them is neither liquid nor are they fungible.

The first test of a liquid market is whether you can resell a diamond. In a famous piece published by The Atlantic in 1982, Edward Epstein explains why you can't sell used diamonds for anything but a pittance:

Retail jewelers, especially the prestigious Fifth Avenue stores, prefer not to buy back diamonds from customers, because the offer they would make would most likely be considered ridiculously low. The "keystone," or markup, on a diamond and its setting may range from 100 to 200 percent, depending on the policy of the store; if it bought diamonds back from customers, it would have to buy them back at wholesale prices.

...

Most jewelers would prefer not to make a customer an offer that might be deemed insulting and also might undercut the widely-held notion that diamonds go up in value. Moreover, since retailers generally receive their diamonds from wholesalers on consignment, and need not pay for them until they are sold, they would not readily risk their own cash to buy diamonds from customers.

Would a sealed benny count as a diamond?

tamisita

Bentleyspop said:

What costs more?

The diamond for the engagement ring?

Or the....


Lawyer for the divorce?

Having been one of the few women on these boards that has actually had to pay for both I would have to say that 23 years of inflation factored in the divorce still cost me more....but was a far better investment ;-)

whispering hands

I always told my boyfriends, " don't buy me valuable jewelry, I am a scatter brained mess! I lose most everything! ( I miss placed my HORSE once!! How do you forget where you left an 1100 LB pet!???), so that would be a worthless investment. Besides Diaminds are just too snobby for me.. I prefer turquoise or amethyst, but I love bloodstone too. Just don't really
Like diamonds.. Except to cut glass with. :-) and I don't want an engagement ring, unless you can find something very unique.. I would want something I can't lose.. I don't know what that would be though.. I've lost some version of everything I've ever owned! It's not funny when it happens.. But it's always funny later! Except losing my horse.. That made me feel horrible, even now.. Poor guy..

hedonist

Seeing this thread pop back up, I thought chadwick had made a (much-welcomed) reappearance.

tamisita, good for you! Some of the best investments have nothing to do with money.

I don't dig stones as a form of jewelry to begin with (ok, maybe the darker hued ones) - just generally not my style. But give me distressed metals any day.

Still got a mood ring somewhere around here too

(whispering, I am not touching the horse fiasco = no ma'am!)

whispering hands

hedonist said:

Seeing this thread pop back up, I thought chadwick had made a (much-welcomed) reappearance.

tamisita, good for you! Some of the best investments have nothing to do with money.

I don't dig stones as a form of jewelry to begin with (ok, maybe the darker hued ones) - just generally not my style. But give me distressed metals any day.

Still got a mood ring somewhere around here too

(whispering, I am not touching the horse fiasco = no ma'am!)

Lol it took me like six hours to realize what I'd done!! Lmao, when I found him, ( remembered where I'd left him), I felt like such a dumbass!! Lol

tamisita

whispering hands said:

hedonist said:

Seeing this thread pop back up, I thought chadwick had made a (much-welcomed) reappearance.

tamisita, good for you! Some of the best investments have nothing to do with money.

I don't dig stones as a form of jewelry to begin with (ok, maybe the darker hued ones) - just generally not my style. But give me distressed metals any day.

Still got a mood ring somewhere around here too

(whispering, I am not touching the horse fiasco = no ma'am!)

Lol it took me like six hours to realize what I'd done!! Lmao, when I found him, ( remembered where I'd left him), I felt like such a dumbass!! Lol

Well I suppose I may as well update....because as much as my boyfriend thinks diamonds are intrinsically worthless and I agree with him....I now have one on my left ring finger.....and damn I like it! Its not a new or flashy or even big diamond....its his mother's ring from when she was married to his father (they are still very good friends and I love them both). Perfect gift from him AND his family to welcome me into their tribe ;-)

Last-12-Exit

I hate that diamonds hold any value. It's dumb men are expected to spend so much on a diamond to get married. It's dumb that women expect to get a huge diamond when they are proposed to. It's dumb that men pay ridiculous sums of money for engagements. I told my wife before we were engaged that I would never spend more than $500 for a wedding ring. And I didnt.

oftenreading

Last-12-Exit said:

I hate that diamonds hold any value. It's dumb men are expected to spend so much on a diamond to get married. It's dumb that women expect to get a huge diamond when they are proposed to. It's dumb that men pay ridiculous sums of money for engagements. I told my wife before we were engaged that I would never spend more than $500 for a wedding ring. And I didnt.

Well, people spend money on "dumb" things all the time. I personally think it's dumb that some people spend huge amounts of money on sports cars or luxury SUVs when a cheaper car would do the job just as well. I also think it's dumb when people spend large sums on big screen tvs, expensive alcohols, and flashy electronics. However, that clearly reflects my priorities, which are not universal (although they should be ).

I think as long as the couple decides and agrees what their spending priorities are, and as long as they aren't overextending themselves, it doesn't really matter if they buy expensive jewellery.

hedonist

Dumb - think I'm just happy

often, your last paragraph - yes ma'am! We live by this philosophy and it's worked well for us.

By the way, we don't even wear our silver bands anymore.

It's just not needed. We keep them in a little dish on the bar and seeing them there is enough.

Also must give congrats to tamisita; can imagine what wearing the history of the ring (plus the goodwill behind it) must feel like - THAT is valuable.

Smellyman

oftenreading said:

Last-12-Exit said:

I hate that diamonds hold any value. It's dumb men are expected to spend so much on a diamond to get married. It's dumb that women expect to get a huge diamond when they are proposed to. It's dumb that men pay ridiculous sums of money for engagements. I told my wife before we were engaged that I would never spend more than $500 for a wedding ring. And I didnt.

Well, people spend money on "dumb" things all the time. I personally think it's dumb that some people spend huge amounts of money on sports cars or luxury SUVs when a cheaper car would do the job just as well. I also think it's dumb when people spend large sums on big screen tvs, expensive alcohols, and flashy electronics. However, that clearly reflects my priorities, which are not universal (although they should be ).

I think as long as the couple decides and agrees what their spending priorities are, and as long as they aren't overextending themselves, it doesn't really matter if they buy expensive jewellery.

Yup, Can't believe what people waste money on.

Cars are the worst. They are the worst purchases you make in your life, yet people way over spend.

brianlux

Spending more on something if the more expensive item is more durable is the only reason I can see for spending more. I'd rather have one pair of $50 shoes that last two years than two pair of $25 dollar shoes that each last 10 months.

As for diamonds, I have to confess I have owned a few (very small ones). They make my records sound good. But that about it.

HughFreakingDillon

PJ_Soul said:

That's true Brian, but it's easy now to find diamonds that didn't involve any human misery. Canadian diamonds, for example. They are more expensive of course, but the difference in price is well worth it if you're going to be buying a diamond.

you are right. a good friend of mine is a diamond driller. no human misery at all.

HughFreakingDillon

I am constantly dismayed at the total judgement on these boards of people who choose to spend their money how they wish. Do I personally want to look like Mr.T? No, but I also don't go around judging others for what they spend their money on. Did I want to have as frugal a wedding as possible? Yes, but if someone wants to spend $100K on a wedding, i'm certainly not suggesting they be tarred and elbow macaronied. did my wife want an engagement ring? Sure she did. does that make her a shallow gold digger? not in the slightest. it's a very modest ring, and I was happy to buy it for her. just as she's happy to send me on trips to see Pearl Jam.