A YouTube video warning against buying expensive luxury brands has gone viral.
Cara Nicole, a YouTuber who makes videos about money, media and intentional living, shared her thoughts about how expensive luxury brands target the poor rather than the rich in a video essay uploaded on Jan. 11.
The video, titled “How Designer Brands Keep You Poor,” was recently re-posted on the subreddit r/videos, where it went viral, receiving over 24,200 upvotes and more than 4,800 comments. Nicole’s video on YouTube now has over 623,000 views and 16,000 likes.
In her video, Nicole argues that people are willing to spend large amounts of money on designer brands because of how they want to be perceived by others around them.
We seek social status from what we wear to where we go to school to the handbags we carry. We want to be perceived as high status, especially higher status than those around us. … The world of designer brands, from Louis Vuitton to Rolex, is one where social status is achieved purely through consumption and spending. It’s a system that can easily keep you poor if you are not careful.
Nicole explains that despite the higher price tags, these designer brands are targeted more toward the poor, or “the people who want to look rich,” than the actual rich. She adds, “Middle- and lower-class folks who don’t have that much money or savings – that is the bread and butter of designer brands.”
The YouTuber then lists some of the “uber-rich” who have maintained simple appearances in public, including Bill Gates, Melinda Gates, Mackenzie Scott, Melanie Perkins, Mark Zuckerberg, Whitney Wolfe Herd and Steve Jobs.
She also notes that while many celebrities flaunt their designer brands on camera, most only do so for marketing purposes organized by the fashion brands, such as ambassadorships.
In return, those same celebrities are paid or even compensated with free items from the brands for wearing their products.
“Because of all this, there’s this illusion that designer brand items equate wealth and coolness,” Nicole says. “It feeds straight into our psychological desire to fit in and be part of an exclusive club, especially one where our peers are our rich and famous idols.”
Another point Nicole discusses in her video essay is the phenomenon dubbed the “Pretty Woman Effect,” in which salespeople consciously act rude and condescending toward shoppers to elicit a reaction that makes them want to buy luxury brand items from the store to show they can afford them.
One example Nicole shares is a viral TikTok video of a Singaporean TikTok user and her mother posted in May 2022. In the clip, the TikTok user says that her mother was ignored by Dior staff for looking “poor” due to how she dressed. The two purportedly returned to the store the following day and bought several items from another staff member to deny the rude employee any commission from the sale, which likely amounted to tens of thousands of dollars.
For those who view their purchase of luxury brand items as a form of investment, Nicole suggests it is better to put that money into other types of investments, such as a low-cost index fund, for a more reliable profit.
Nicole compares purchasing a $3,500 designer back to investing the same amount of money in a more affordable bag and a low-cost index fund. She explains that when someone buys an expensive handbag with the intention of selling it 10 years later, the seller would likely only manage to sell the bag at the same market price they purchased it for, a 0% profit.
On the other hand, if that person decides to buy a quality handbag worth $50 and put the remaining $3,450 in a brokerage account to invest the money into the S&P 500, they would likely turn their initial investment into $10,525 in 10 years based on the S&P 500’s historical average of 11.8% annual growth.
“What I hope this thought experiment in this video overall can do is to help us think a little bit different about designer brands and how we spend our money,” she says in her closing remarks. “Money is time and I think it’s always a good idea to reflect on how we are spending both of them.”