Is an engagement ring considered to be an investment?

"Is an engagement ring considered to be an investment?"

As a mom to 3 sons in their early-mid 20s, many of my friends are also moms to sons & daughters of the same ages. Proposals, engagements and weddings have become big topics, and sometimes these conversations include rings.

Ring prices can vary widely. According to Bride's magazine American Wedding Study from 2020, the average couple spent $3,756 on a ring which was less than the $7,829 average price spent in 2018. Some couples spend less, others a great deal more. Some are ditching the diamond and opting for alternatives as the center stone. Others are choosing to direct the funds that would be spent on a ring toward something that they agree is more in line with their future goals.

From a financial perspective, the answer to whether or not the ring is an investment or not isn't clear cut.

Usually, the answer is no.

Engagement rings are largely considered a depreciating asset similar to how a new car loses value after you buy it. If it is sold shortly after the ring has been purchased, it's not likely that the purchase price - or anything close - would be recovered.

But, according to sources, if you buy a large, high quality diamond or gemstone and were to hold it for many years, it's possible that it would sell for more than the purchase price, even more so if the stone is rare. Prices of diamonds have increased consistently through the years.

According to an article in #smartasset, there's generally a 100% to 200% markup on the retail price of a diamond (fyi).

The diamond industry refers to the 4 C's when measuring the quality of a diamond: cut, clarity, color and carat. Clarity is a measure of the purity and rarity of the stone under 10-power magnification. A stone is graded as flawless, if under this magnification, there are no inclusions (internal flaws) and no blemishes (external imperfections). *ref #tiffany & Co.

Planning a purchase such as an engagement ring is a big, important step for any couple. Do your homework. Know how much you are willing to spend. Start saving early so that you don't go into debt with this purchase.

Engagement rings may be viewed as an investment in your future together as a couple. As with other big financial decisions a couple will face throughout their engagement and marriage, think of your choice for an engagement ring as a jeweler would the quality of a diamond. Have clarity on your financial (and other) goals together. While the journey may have occasional imperfections and blemishes, having a long term outlook on your lives together can be a timeless investment.

Ultimately, the most important investments that you make as a couple are those made in your commitment to positive, honest ongoing communication, dedication to helping each other continue to grow and creating and maintaining a shared vision of your future together.

#engagement #rings #clarity #longterminvestment #bestlife #whatsnext? #beready!