Are diamonds really forever?
One 4-letter phrase changed the way the world thinks about diamonds. In fact, it may be the reason you're saving up for a diamond engagement ring right now. Or wearing one! (Or discovering one in your Wendy's frosty.)
In 1947, De Beers diamond company launched an ad campaign using the famous slogan, "A diamond is forever." They needed to convince the public that diamonds were scarce and valuable, despite owning every diamond mine in South Africa where diamonds were being "scooped out by the ton".
So how did diamond engagement rings become a global symbol of love and devotion? In honor of Valentine's Day, here's a deep dive.
The rise of the diamond ring
Until the early 1900's, diamond rings were few and far between. That is, until De Beers Group made it their mission to influence mass psychology around the tradition of engagement rings.
From 1939 to 1979, De Beers’ ad budget increased from $200,000 to $10 million a year. Their wholesale diamond sales followed suit: going from $23 million to $2.1 billion in the United States. The result? Today ~75% of brides in the U.S. wear a diamond engagement ring.
Source: How an Ad Campaign Invented the Diamond Engagement Ring
So it's all just hype?
Not necessarily. Diamonds can be an investment if you choose wisely. When you buy a diamond retail, the markup can be 100-300% of wholesale. So there's a long way to go before you start to see return on investment. Unlike gold and silver, there's no price index for diamonds. This combined with De Beers' near monopoly makes determining the true value of a diamond tricky. Rare, desirable diamonds have the best chance of a strong resale value. (Like this Asscher-cut canary.)
The Playbook take
Whether you're the buyer or the wearer, it's better to think of an engagement ring as a purchase, not an investment. And ya know what? It's refreshing to free yourself from that pressure. Not all purchases can be rationalized as 'smart investments or not'.
Instead, think of a diamond purchase as the perfect opportunity to talk with your partner about your finances, and share your perspectives on large purchases.
De Beers famously recommends spending 2+ months' salary on an engagement ring. But remember, this "rule" was created by an ad agency. So don't let it cause stress or set you back from your other goals. Let an engagement ring fit into your financial plan just like any other big purchase.
And yes, maybe we're brainwashed by decades of great copywriting, but diamond rings (when they're conflict-free, ethically-sourced, and purchased with your financial future in mind) can be a thoughtful way to celebrate love.
And remember, no matter what you'll never propose as well as this guy.
To financial freedom and beyond,
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