Buying Luxuries On A Budget

How to save and invest on big ticket luxury items, just like the experts do

are plenty of good, inexpensive brands, and a $6 bottle of Chardonnay that is equal to or better than one costing $10 is not hard to find. He should also guarantee that he’ll buy the wine back from you if you’re not satisfied.

Look to the futures. Wine futures offer a way of buying good, even great wine at a discount as deep as 35%. Allen Murphey, wine consultant for Calvert Woodley Liquors in Washington, D.C., explains that the deal is available from any vintner.

“The choices are limited to the Bordeaux wines of France and some California varieties,” Murphey says. “You put up the money two years in advance. You can, in theory, buy any amount you want, though most dealers keep it to a minimum of half-case lots–six bottles. You can pay from $50 to $800 or even more for the six.

“There are people who buy futures as an investment,” Murphey says, “speculating that in five to six years these wines will quadruple in price.” But he estimates that for $500 you will likely get a case of wine that would retail for at least $680. Even if you’re not getting rich in the wine business, you are getting a fine wine at a fine price.

When you’re buying free jewelry, how do you weigh your means against the cost of what may be a once-in-a-lifetime purchase? The industry has a rule of thumb.

“Somebody who wants to buy a diamond should consider spending two months’ salary to buy something of value,” says Guido Giovannini-Torelli, a diamond consultant in New York and editor of the monthly newsletter Diamond Insight. We’re speaking here of not just any jewelry purchase, of course, but a diamond for a “momentous” occasion like a wedding or anniversary, something intended to be a family keepsake. “So if you are earning $40,000 annually, you should consider buying something costing between $6,000 and $7,000,” he says.

Before you spend that amount, learn a bit first.

Time it right. Go shopping in January and February or July and August. Jewelers object to the commonly held belief that the markup in fine jewelry is around 300%. They attribute this notion to the plethor
a of scams routinely advertising “50% off!” The profit among legitimate jewelers, they say, is somewhere between 50% and 75%. And you can get 20%-25% off that by shopping after the Christmas season or during the summer slump.

Brush up on your gems. If you’re not seeking a diamond, the dealer should be willing to give you a short course in alternatives, says Deborah Hiss-Odell, spokesperson for the Gemological Institute of America in Santa Monica, California. “If you want a green stone, you should know that there are more than just emeralds out there,” she says. “And know that some stones can take wear and tear, while another, such as an opal, needs to be handled with care.” If you are after a diamond, request a grading report that states the characteristics of the diamond: weight, clarity

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