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there was a good freakonomics podcast this week about diamonds. basically all stuff I knew about how there's no logical reason diamonds are expensive and in-demand, it was advertising that got us where we are today. but you could say I'm biased, I always thought this. I was a teenager when the stories of abuse and torture of diamond miners started breaking, but after those were investigated and possibly resolved, it lead a lot of us to ask the questions of what we all did to empower an industry to go to such unethical lengths to turn a profit. I didn't need much of an excuse to not like diamonds. So even if they are 100% nice to all those workers (which I doubt), there's still the silly history of marketing schemes giving people a false sense of value and taking their money for something totally impractical.

which leads to the podcast, touching on practicality. in the story, they interview a couple whose marriage almost dissolved over a diamond. the husband in the story is notoriously cheap, unscrewing light bulbs in the house to save money, categorizing everything as a need or a want. the wife puts up with this but doesn't totally love it. So at a charity event, they win a $7500 diamond, and then there's the controversy: the wife is thrilled she can finally have something nice and luxurious to wear, the husband says it's obvious they should just sell it and use the money to pay down debts.

luckily marc and I would have no marriage issues if this happened to us, we'd both sell it in a heartbeat! but it got me wondering if this is a problem everywhere. so hey, a poll!

if you won a diamond worth $7500...

I'd keep it and wear it
I'd sell it because I'm not a diamond fan
I'd sell it, and do the same for any luxury item I'd won

bonus poll question: if you have a significant other whose financial resources are linked to yours, do you agree on this?

we agree we'd keep it
we agree we'd sell it
we disagree

incidentally, the podcast ends with the couple having a nice discussion, admitting that they each just wanted to fill listened to, and agreeing to sell the diamond - and as proof, it's currently on ebay.

Posts from This Journal by “personal finance” Tag


( 21 comments — Leave a comment )
Apr. 19th, 2015 03:54 pm (UTC)
I think that the resale value of diamonds is particularly low so I would keep it.
Apr. 19th, 2015 04:07 pm (UTC)
That was my experience. We learned early on in one of my jewelry-making classes that if you buy a used ring from the classifieds (pre-ebay/craigslist) you can get that "assessed at $7500!" diamond for $700, and resell the scrap gold for 1/3 of that, and finish up with a brand new design "assessed at $7500!" and people will actually buy it. Crazy.
Apr. 19th, 2015 05:02 pm (UTC)
Yeah. If that $7,500 is notional then keep it. If I can get $7,500 for it, then sell.
Apr. 19th, 2015 04:14 pm (UTC)
I debated clicking on the last one, but then realized there's like countless luxury items that I'd totally take. A $5,000 Armani suit? I'd totally wear that to the next wedding I'm invited to even though I already have a suit! Maybe some super-expensive cognac, vinegar, chocolates, etc-- I'd eat/use any of those. Vacations, I normally can't afford, so I'd take what I can get. But $7,500 seems like a lot of money for a rock. Plenty of other luxury items I'd just sell-- like, a super-nice car, I'd just sell, buy a cheaper car if I needed a car, and keep the money. Granted, I'm a male and don't get to wear jewelry, but I feel like even if I were a woman I'd have to really love that diamond to keep it.

I feel so bad for her, though, because she never got to finally have anything nice. I don't like that the guy not only just saw the diamond as just money, he saw it as his money.
Apr. 19th, 2015 10:04 pm (UTC)
I feel so bad for her, though, because she never got to finally have anything nice. I don't like that the guy not only just saw the diamond as just money, he saw it as his money.

I was about to say this, at much wordier and more arm wavy length. *agrees*
Apr. 19th, 2015 09:34 pm (UTC)
I'd wear it, it's great to have nice things once in awhile. These opportunities don't come up that often, to have nice things. Maybe keep it until a rainy day and sell it then (I'm thinking personal medical expenses or medical expenses of a loved one or job loss). Then I could enjoy it for awhile but then sell it to someone else when I really needed the money.

If I had it due to some for-profit sweepstakes, I would probably donate it to charity, since that is something I like to do. But they won it from a charity, so I would keep it.

But I am single, so I don't have to consult anyone for my financial decisions.

Also, I think it depends on the luxury prize--if I won a car, I would sell or donate it right away, because having a car in the city is a pain. Or maybe I would give it to my parents who live in the suburbs. If it was some dream vacation, I would go on the dream vacation. :)
Apr. 19th, 2015 10:06 pm (UTC)
I never understood the diamond thing either. But it depends on the item, doesn't it? If I won something I'd dreamed of all my life (an example: an all expenses paid trip to Crete) and my SO wanted to just sell it and pay debts, not caring about what it meant to me, I'd be pretty hurt. Currently my SO and I don't share finances, but I'd like to think that if this happened we would be able to agree.
Apr. 19th, 2015 10:45 pm (UTC)
I would strongly consider selling any luxury item I won because I don't generally want the item. In the case of winning a really expensive piece of jewelry, I probably would never wear it, even though I do like nice things and dress up from time to time. I just can't imagine a situation where it would not be out of place. I might set aside some of the proceeds to buy a less expensive piece of jewelry.
Apr. 19th, 2015 11:19 pm (UTC)
I mean, if it has no sentimental value, then its value to me is only what it's worth monetarily. Since diamonds are a controlled industry (less than they used to be, but still) to such an extent that it wouldn't be akin to investment to keep it, I wouldn't keep it. Hell, for one thing, I don't want to be responsible for that kind of value-density. I do have some very small very valuable things, but they mean enough to me that I don't mind the psychological and emotional cost of keeping track of them and taking good care of them. It comes naturally, even. Even ignoring the question of increase in value, it's just plain easier to have a Certificate of Deposit of the same value than the thing itself.

I might be moved by an argument-from-bargain, if I couldn't replace it for the cost of buying it, but the reality is that there'd be things I'd much rather have for the proceeds of selling a diamond than the result of buying one, I suspect. There's no doubt some kind of curve there, but overall that's my intuition.
Apr. 19th, 2015 11:52 pm (UTC)
sell it and buy a prettier gem 8) or whatever
Apr. 20th, 2015 12:07 am (UTC)
I'd sell it, I have no use for diamonds :P Can't promise I'd do the same for -any- luxury item, but most.

I asked my husband, he said "I'd ask you what you wanted to do with it. I don't care what happens to a diamond." So I guess that means we agree we'd sell it.

But he did say "now, if it was a high end laptop..."
Apr. 20th, 2015 12:14 am (UTC)
I would keep it, it might be assessed at $7,500, but selling it without a podcast and story behind it, you would be lucky to get anywhere close to that amount of money. So wear it, enjoy it, and maybe later you can sell, or use it as barter for something.
Apr. 20th, 2015 03:16 am (UTC)
Hm... if it was a rare kind of diamond I might keep it, but only if it was because it was an interesting mineral specimen. :P

Otherwise I'd sell it. And maybe buy one of those meteorites I've had my eyes on. A rock for a rock, amirite? ;)

Though $7500 maybe for a nice trip someplace awesome would be better...

...why...would anyone unscrew the light bulbs?? I do feel bad for that poor woman, and if she won it then it should be hers. Honestly, what a jerk.
Apr. 20th, 2015 04:10 am (UTC)

I wouldn't think twice about selling a diamond and, since I'm single, that would be that. I'd also sell a fur coat or a luxury car, but if I won a posh trip, I'd have to give serious thought to going. Very serious thought.

Apr. 20th, 2015 08:51 am (UTC)
I would sell it especially because I would need to money more than the diamond, but I would sell it in any case, I guess. Because, while I do appreciate diamonds for "oh shiny!", it is the same reaction I would show to a pretty glass jewel, so, it doesn't matter to me if it is a diamond or a swarowski glass crystal.

As to "any luxury item" ... that is a pretty broad spectrum. But most/all things I can think of right now, if they would sell for a value worth the trouble of selling them, would be of less worth for me than being rid of my debts or getting a new kitchen or traveling etc.
Apr. 20th, 2015 11:22 am (UTC)
I've never really like diamonds. They're my birthstone, and so bland. Give me an amethyst any day of the week! My husband and I actually had a fight about this when it came to engagement ring shopping, I would've been happy with just an amethyst, but he want diamonds, and eventually he told me he wanted them so that it "looked like an engagement ring" which (though it may not seem so) was a surprisingly romantic thing for him to say so I capitulated.

Side story: My ring has three stones on it, the in-store version of which were all diamonds. We didn't know if we wanted an amethyst between two diamonds or a diamond between two amethysts, so what did the salesman do? He whipped out a purple crayola marker and colored one of of the diamonds in, let us look at it, then wiped it off and colored the outer two in. It was SO useful, and a trick I never would've thought of.
Apr. 20th, 2015 11:50 am (UTC)
I can't imagine keeping something like this. For one, I never go anywhere where I would feel comfortable wearing it. Plus the fact that I've never been a fan of diamonds. They don't seem all the pretty to me, not like opals.

So, I'd sell it and maybe use part of it to pay down debt, but most of it I'd use to take a trip.
Apr. 20th, 2015 12:45 pm (UTC)
I'd sell a diamond - I don't like diamonds

Most things I see used as prizes are things I don't want, so I'd also sell those things. But sometimes it is something I'd want to keep.

ETA - my only debt that isn't a cleared-every-month credit card is my (UK) student loan, for which the repayment terms are very generous and I wouldn't want to pay that off even if I did get a sudden chunk of cash; so I'd be using the money for "save for a house"

Edited at 2015-04-20 12:47 pm (UTC)
Apr. 20th, 2015 02:51 pm (UTC)
Well, my engagement diamond is worth much more than that, but it's a family heirloom, so there's no way I'm getting rid of it!

I think it depends on the item. A diamond that i don't find very pretty, probably sell. Picard's flute from ST: TNG, NO WAY am I selling that.

I can say from past experience that if we win a decent, but not huge amount in the lottery, my partner and I agree that we should use it to pay down debt. :)
Apr. 21st, 2015 04:11 pm (UTC)
If we could actually get that much money for it, we'd sell it and either pay down debt or invest it in redoing some things in the house. I have no sentimental attachment to it and I can't imagine it being more beautiful or wonderful than the ring my husband got me. If it would sell for much, much less I might keep it and pass it down to my Goddaughter, if she were interested in that sort of thing.
Apr. 26th, 2015 01:15 am (UTC)
I polled him, and we separately agreed that we'd keep it, for two reasons:
1) Diamonds and gold hold their value. Unlike other luxury items, like a car or electronics, which we'd want to sell immediately before they depreciate.

2) The diamond shown is not really worth $7500. For comparison, my engagement ring is a VS2, Color G (one step lower but indistinguishable from an F), and 0.75 carat, and it may be valued at probably $5000 but we certainly did not pay that for the diamond. So similarly, the princess cut diamond won at the auction may be valued at $7500 but selling it (if you didn't have podcase notoriety), you'd get maybe $2000. Might as well keep it and wear it.
( 21 comments — Leave a comment )

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