Jewelry: Are They Really Investments?

When I was growing up, I often hear my mom and her friends say that jewelry are investments.  True enough, she was able to accumulate many pieces over the years. 

In my mind, a good indication that my family was in “good, wealthy times” was when I would see many bling blings in my mom’s closet.  Of course, lesser jewelry indicated bad times or a financial crisis.

When I became older, I began to understand the real value of jewelry in our family’s finances.  My mom would later tell me that whenever she needed money to fund her businesses, she would “sell” her jewelry to friends or even pawnshops. By doing this, she was able to receive cash almost instantly but they were sold at lower costs.

So here is a question that puzzled me over the years:  Are jewelry pieces investments?

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The story I narrated above was during my grade school until college years. When I started working, I, too, was attracted to jewelry. 

In fact I had 2 jewelers (in Tagalog, we call them “alahera”), the first one I met through referrals in the office and the other through my mom. 

I remember the first set I bought.  I was 24 years old. They were a pair of earrings with matching ring.  14K white gold,  X-shaped with small diamonds priced at Php 14,000.00 (USD 305). 

I paid Php1,000.00 (USD 22) every payday in the next 7 months.  After I fully-paid my first set, my jeweler offered me another set, and another and another……I became her loyal buyer (“suki” in Tagalog) for the next three years. 

The reason I stopped buying from my original suki was when I met a new jeweler and I bought pieces from her as well. And the cycle continued – I bough one set and after paying it in full, I was always offered another set.  I paid all my jewelry in terms.

After five years of paying off one piece of jewelry after another from two jewelers, I decided to stop buying. 

I realized that even if I have gold and diamonds, I was not liquid enough.  I remember a time when I needed cash ASAP and the first thing I did was to sell my first set of white gold.  I even went to pawnshops and asked how much they were willing to buy, and the highest “bid” I got was Php 5,000.00 (USD 110)!  Less than half of the amount I paid.  I also tried to sell by emailing some friends and office mates about it but there were no takers.

Good thing that my mom came to the rescue!  She bought the set from me even though I knew she did not like it. 

In fact, she gave me and my sister some jewelry that she does not use as much and that was the second reason I stopped buying for myself! 

Seriously, after attempting to sell my jewelry set,  I realized that I can’t easily convert it to cash.  I mean, it was worth thousands of pesos but at that moment it was of no value to me because I needed cash.  There are countless pawnshops out there who are willing to give cash but I was not desperate enough to sell my jewelry at half the price.

That time, my thought was I used my hard-earned money to buy that set and took me months to pay for it.  I can’t let it go just like that.

So based on my love (and hate?) affair with jewelry, do I consider them investments?  

Yes and No.

Yes, they are investments because the prices of gold and diamonds always go up.  The price of gold per gram  five years ago is a lot higher compared to its price today and continues to increase.  A one-carat diamond costs  Php 50,000.00 ten years ago and the price today? At least Php 100,000.00.  That depends on the 3 Cs (cut, clarity and color). 

No, they are not investments because like what I experienced years ago, I cannot easily turn my jewelry set into cash!  Except, of course, if you have a jewelry store or you know a jeweler, then you can actually sell it at a decent price. But again, it may take a while before an interested buyer comes along.  So you still have to wait for that cash to come. 

I believe that jewelry become “true” investments whenever they are passed from one person to another.  They now become heirloom pieces.  Like the jewelry pieces that my mom gave me and my sister.  They are definitely priceless to us because of their sentimental value – there is emotional attachment. 

Lastly, my fondness with diamonds ended temporarily when my jewelry mentor, my mom casually mentioned that it’s better to have cash than jewelry.

In other words, it’s better to have liquid investments. The last piece I bought was three years ago and I follow her independent financial advice until now.

P.S  Do you really think that diamonds are a girl’s best friend?