Once upon a time, luxury bags were simply fashion accessories. Then, someone at CHANEL and HERMÈS had a stroke of brilliance: if you tell people a handbag is an “investment,” they’ll feel better about spending a small fortune on it. And so, the myth was born.

Influencers, resellers, and even financial analysts jumped on board, preaching the gospel of “investment pieces.” They waved graphs, pointed at resale prices, and conveniently ignored one small detail—luxury bags, like stocks, can crash. What happens when the hype shifts, the trends die, or a brand decides to flood the market with new releases? Suddenly, that “valuable asset” starts looking a lot like a liability.

And yet, people continue to treat their designer bags like blue-chip stocks, convinced that their purchases are somehow immune to the forces of supply and demand. The reality? Luxury brands are not in the business of creating wealth for consumers. They are in the business of extracting it.

For a bag to be a true investment, it would need intrinsic value—something that holds worth beyond artificial hype. Gold, real estate, and fine art have tangible reasons for appreciating over time. A leather handbag? Not so much. It’s a trend-driven, brand-dependent product that holds value only as long as people are willing to buy into the illusion.

The second-hand market, often cited as proof of luxury’s investment potential, is another marketing masterpiece. The brands themselves have no interest in supporting resale markets unless they can profit from them. CHANEL, for instance, has aggressively raised retail prices in an attempt to keep its bags out of the hands of resellers, while LOUIS VUITTON burns unsold inventory to maintain an illusion of scarcity. This isn’t an investment landscape—it’s a high-stakes game of manipulation.

The Real Reason The Wealthy Buy Luxury

If luxury bags were truly about investing, billionaires would be leading the charge. But here’s the truth: the ultra-wealthy aren’t treating their Birkins like stock portfolios. They buy them for fun. They use them without worrying about scratches, gift them without hesitation, and don’t obsess over keeping them in pristine condition for some future payday. The idea that a bag is a “financial asset” is a fairy tale sold to the middle class—those eager to justify a splurge as something more than just that.

Meanwhile, the brands keep pulling the strings. The “quota bag” system at HERMÈS? A brilliant way to make customers beg for the opportunity to spend money. CHANEL’s endless price hikes? A tactic to create urgency. The luxury industry thrives on convincing buyers that exclusivity equals value when, in reality, the only thing keeping these brands afloat is the willingness of consumers to overpay.

The Myth of Resale Profits

There’s always a viral story about someone who bought a HERMÈS bag for $10,000 and resold it for $20,000, but these anecdotes ignore the countless others who bought into the hype and couldn’t even break even. The resale market is a shark tank, where only a select few truly profit, and the majority are left holding overpriced leather.

Even billionaires aren’t above a good dupe—so why should you be?

The Luxury Paradox: Prestige or Profit

The luxury industry has spent decades conditioning consumers to believe that prestige equals profit. Price hikes, manufactured scarcity, and influencer-fueled hype all serve one purpose: to keep you convinced that buying a handbag is a strategic financial move rather than what it really is—a high-priced indulgence.

Luxury Is A Consumer Game, Not A Wealth Strategy

Luxury bags are not assets. They are products, designed to be sold at extreme markups under the guise of exclusivity. No matter how many price hikes CHANEL implements or how many hoops HERMÈS makes customers jump through, at the end of the day, they are selling leather goods—not stocks, not gold, and certainly not financial security.

The true investment is in knowledge—knowing when you’re being sold a fantasy and choosing to step back from the illusion. The smartest luxury consumers aren’t the ones fighting to get on the HERMÈS waitlist. They’re the ones who see through the marketing and refuse to be played.