 Do luxury brands prevent people from building wealth by incentivizing poor financial decisions? This Asian YouTuber is going viral for breaking it down. Yeah, we got to talk about it. This hopper YouTuber, Karen Nicole, dropped a video called How Designer Brands Keep You Poor. And it is sparking a lot of arguments surprisingly in a lot of spaces on the internet, particularly Asian circles, because Asians consume a lot of luxury designer products. Yeah, so she also uses a lot of math terms and investing terms. So I think it was very technical in a sense. And we're going to go through, we're going to talk about the comment section, we're going to talk about what people are saying, people agreeing, people disagreeing, our own takeaway. So please hit that like button and check out other episodes of the hot pop boys from silly to serious. Real quick, Andrew, what were her main points in the video that she was making? Because that was a video essay. I mean to sum it up, obviously she is more talking about like maybe a lot of women's stuff, like bags and shoes, things like that. But she's basically saying most of these things do not ever increase in value. Some of it may hold its value at best, but probably not increase. If you invested thousands of dollars into the S&P 500 over 10 years, it's a way better return than investing it into a bag. Social media is also just pushing everybody to be in this rat race to just one up each other. The influencers. And she's also saying that these luxury brands do market and target the lower middle to middle class, people who usually do not even have the means to be spending thousands of dollars. Right, because it's trying to trick people into getting an aspirational item from the upper class, therefore making people feel better, right? Because they're in this status chase when their bank account or their actual liquid assets do not reflect that level of financial health. For sure. And I think this video is super relevant nowadays, people all on social media. And shout out to Kara. I think she broke it down in very simple math terms as well. Yeah, I mean I think that for sure I don't agree with every single one of her points, but she has a point that luxury consumption probably is at the peak of any point in human history. Yeah, for sure, for sure. Anyway, let's get into the comments section. Andrew, this one was in defense of the brands. Somebody said, man, how is it the brand's fault? They did all the work to build up this scepter of coolness and guess what? People inevitably they want to hold the scepter, it's just human nature. Yo, that's crazy to use the imagery of the scepter that you're holding. But basically, yeah, I mean, listen, that's what brands are supposed to do to try to get you to buy things, right? Yeah, I mean, listen guys, I think it really depends. If you like work at a brand, you're probably more in agreement with that statement. But if obviously you don't work at a CPG, a consumer brand of good, you're probably like, I'm against that. Somebody said, tell this to Asia. They're buying up so much luxury, real fake, whatever it is, they sure value it a lot is because Asia's so classist in old school ideas on the European dominance. Yeah, you know, I'm not fully tapped in to Asian society on the level to tell you whether the lower middle class and middle class people are buying luxury brands. I think a lot of them are buying the fake stuff because it's easier to find the fake stuff in Asia to be honest, because it's made there. So it doesn't have to be shipped and travel as far. But I will say this in America, I do know a lot of middle class people to maybe lower middle class people that probably should not even be thinking about buying designer brands, but it's kind of our culture out here. Yeah, I mean, there's like a different type of credit system. You can get money from the bank here and stuff like that. I mean, it's different culture to culture, but for sure in Asia, I mean, a lot of people got new money recently because of the economic boom, and it's true. Whether you're talking about Japan, Korea, China, all the way to Southeast Asia, a lot of people are buying real bags. They probably used to have fake bags because they do value it. Somebody said, you know, there's just an illusion that gives you wealth and coolness. I mean, it's just all an illusion and we buy into that illusion. We'll kill our own credit score to buy into that illusion. Listen, everything is shallow, whether you're focused on health and fitness and looking good and oh, it's more about beauty. It's not about these material things or some people will be like, well, it's more about the money and the material things than it is about the beauty. Guys, everything is like in a way kind of shallow right now, but if you made me choose, I would rather take good health and good looks over buying all these luxury brands. If you had to choose. For sure, for sure. Listen, if you're a 10 out of 10 wearing Target clothes or Amazon's choice, I do not think anybody in society is gonna question you. I will say this though. I think it really depends on the fishbowl that you inhabit, Andrew. Wearing all designer things means something different in Beverly Hills on Rodeo Drive than it does in the Bay Area where everybody's worried about how much equity they have in a tech company. Is that true? I mean, those are different fishbowls. They value different metrics. Yeah, in the circles that I've been in my life, I have to say, I would much rather be a productive. Impactful person. Low-key, wealthy person than even having all those things. But it is true and we do work in entertainment even though you could say we're more on the YouTube side than the Hollywood side. In Hollywood, they care a lot. Yeah, I guess they care more. Somebody said, why would you wanna wear designer and makes you a target out in the streets? That's true, but you know, I don't think that's ever stopped anybody from wearing in certain worlds like iced-out chains because it makes you a target. But if something that makes you a target means that it's valued, it means you're wearing something valued by that fishbowl. Yeah, and also like I do think more watches and things like that are more what a lot of people are robbing them for. I mean, I guess, do they really target female bags and female shoes like Louis Vuitton and stuff? I know, yeah, I've seen some girls that some videos of girls getting robbed for like a really bad... Yeah, yeah, yeah, that's true. Basically, you gotta be careful if you're flossing. Man, people love the words Andrew. The word went from stuntin' to flossing to flexin' to drippin'. Man, there's so many words for the same thing over the years. Somebody said, you know the real rich people? They like stealth wealth. They'll wear a $1,000 plain hoodie that nobody even recognizes except other rich people on the label. Do you think that's true? That's true, that's true. Dude, you walk into some of these designer stores out in SoHo and you're like, how is this hoodie $800 for nothing? But I'm like, no, no, no, no, no. Other rich people know. Somebody was trying to poke a hole in Karen Nicole's argument that Steve Jobs and Mark Zuckerberg were some of the richest people in the world at some point, but they were just wearing like black turtlenecks and blue t-shirts. Because somebody said, yeah, if you knew Steve Jobs had a custom Issey Miyake turtleneck and Mark Zuckerberg is wearing $600 Bruno Cusinelli t-shirts. So that goes to the point of stealth wealth, right? Stealth wealth. And it's never to say that the clothes that they were wearing was cheap, but it was simple. And it was basically the message that they were sending is that I'm not putting my brain power into fashion. I just have 50 of these beautiful t-shirts that are all $500 each and that's what I wear. Somebody said, I'm pretty sure luxury brands do not target middle class or poor people because those people are realistically gonna buy one card holder every two years or three years. I'm pretty sure their exclusive VIP lists are actually filled up with legit rich people. So this is sort of her attacking her argument that designer brands are trying to extract monetary value from poor people. Yeah, I think it's both because there are certain items of the same brand that appeal more to actually upper class wealthy people. Typically the clothes, poor people do not buy, like even when I was like buying Forever 21 clothes, Andrew, I was just getting the card holder. Yeah, I was gonna say like Gucci slides obviously is like a very common one that like basically everybody will spend like $300 on because it's fairly affordable, $200 to $300. But it's like obviously the items that are like $5,000, $3,000, even $2,000 and up that's gonna more appeal to people who actually have money. Yeah, I think that they've opened up recently to get middle class and upper middle class people to buy their items, but traditionally I would say luxury houses for many years because let's say some of them have been around for a hundred years were more for upper class people. Somebody said, yeah, but we all know somebody at our middle class job who went into debt buying these things literally on mad credit. Yeah, no, I mean it happens pretty common. Somebody said, you know, it really varies brand to brand. For example, LV, I feel like they're targeting middle to upper middle class people, but Hermes is definitely for just the super rich. Oh, and especially Birkin. Birkin is super exclusive. You have to be on a certain list. You have to get invited. You're like limited by how many you can buy. You have to like talk to the person and the sales person has to like approve you and all this other stuff. So yes, there are certain brands that are like way outside of the tier of like a middle class person. Do you think nowadays luxury has become so diverse? It's kind of unfair to like categorize all luxury brands from France or Italy in one bucket, right? Because you know how they got like, maybe at one point coach was at the very bottom and nowadays I feel like coach is not even considered a luxury brand anymore. It was when I was growing up. Like I said, man, culture changes. Somebody said, kids nowadays got the worst spending habits I ever seen, man. I've been a PT. I make six figures. I've worn the same shirt for 20 years. What's wrong with that, man? I got a big old investment fund. Social media, man. Social media is the media, Dave. It's the media. Do you think it's because social media opens you up to the exposure of the whole world where somebody that's a PT nowadays in 2023 that's making six figures doesn't want to wear the same shirt for 20 years? Man, if you're very successful I think all this stuff matters less usually. Somebody said, who wants to live like that? You're being cheap, man. Man, think about it. Most Americans, they work until they retire and then they travel the world when they're 55 or 65. Us Europeans, we don't make that much. We don't spend as much. We have less stuff, but we travel all the time. You know, we are like world travelers. So we do not need these symbols to like tell you our status. Do you think that's true? I think it's true. I think that some people like in America we have a lot of nice things but we work really hard and we work really long into our later years. Whereas Europeans, they're almost like having a slow burn throughout their life. Well, it's very hard to like buy or have a really big house in Europe because Europe is like already like packed and developed. So I would say a lot of Europeans who are rich and retired they more value traveling in those experiences. Yes, when you travel out as an American you realize how much Europeans like to travel because you meet them out there. No, no, because when you go somewhere you will see like, let's just say we're traveling and I see like a hundred white looking people. 97 of them are from Europe. Yeah. And three might be from Canada. Somebody said, you know, our term in England for this is called a cheap aristocrat. We always call these people cheap aristocrats. Hey, I got a new term. How about this? Aristocrat. Ah! Why do you think in America, Andrew, we've had terms for this in the past? I remember Murphy Lee had a song called Bougetto or Ghetto Fabulous but none of these really stick. I feel like this whole cheap aristocrat thing it almost just became normalized. Yeah, I think old money versus new money is generally how people see it. And most of America, Andrew, is new money. Somebody said, duh, I thought this was obvious. I don't need Karen Nicole to explain this to me. What is she like, 23 years old? I knew this, boring. Yeah, I think the way she broke it down and also she just kind of seemed like a gal that would be into buying all this designer stuff. So obviously it's the messenger that matters but it was a really well thought out video, I think. Yeah, I thought she did a really good job and broke down a lot of things that you think are common sense but common sense, not that common plus people don't know the minutia and the details behind it. Andrew, we have flown on a Spirit Airlines flight from LA to Vegas before with Spirit Airlines. If you guys know, you know, I don't want to trash it too much publicly, the worst airline. And there was people on there, Andrew, who had real monogram luggage. So I'm saying people making conspicuous consumption choices. People have LV luggage and luggage is not cheap. Luggage is expensive. The LV luggage and you flying Spirit, I don't know, man. Somebody said, you know, it's all about buying the pieces that are assets and maintain value or even grow shoes and bags. They lose the value, but men, we buy watches and gold or gold watches. And if you buy the right gold watches, they soar in value over time. That is true, man. Watch collecting is probably gonna give you a lot better return than like shoes collecting. It's true. Right. Unless the shoes are like, I guess only certain pairs of shoes but really essentially most guys that I talk to, they'll collect watches. Somebody said, you know, for me, honestly though, I wish I would have bought a Chanel bag. That would have decreased less than my index fund did in the past two years. Yeah. I think the last few years was a particular one that doesn't always happen all the time. But yeah, certain luxury goods made it through the recession. And would you say the luxury goods actually, depending on what you invested in, like high growth tech or whatever, it outperformed the stock market? Yeah. It also depends on what point you got into the stock market. Somebody said, who cares how others spend their money, man? And this via guy came in and said, yeah, man, you gotta enjoy it, man. We could all die tomorrow, man. What the hell? Who cares? I mean, honestly, there's a valid perspective to this too, right? I mean, we're just playing the odds here, right? Obviously there's a soon. What do you work hard for? And somebody said, yeah, man, sometimes if you buy the clothes or the bag and you look better, it gives you more confidence to attack your life. Maybe you'll do better at your presentation at work and get a promotion. Yeah. I think if you are a person who likes the validation or you like the comments or you like to show off, you're like, hey guys, look at what I got. And that gives you that kind of energy and dopamine. Then you should do it. You should do it to a certain level because sometimes you need those drivers in your life to push you forward so that you can work harder and harder. Because some people who are like, well, I don't spend my money on anything nice. It's like, well, you're not even working hard. So like get something. Just find the thing that drives you forward. Yeah. People gotta know their own triggers and their own buttons. Everybody is different, even in the same family. Somebody said, hey man, just buy a knockoff. Just go to Canal Street. What do you think of this? I mean, this is not bad. I see all types of people on Canal Street buying the fake bags. A lot of them are tourists. I've seen white people. I've seen black people. I've seen Asian. All types of people are buying these fake bags. You know, to me, I don't know what's real or fake, to be honest. Andrew, I got a little fake bag 101 for people. The really, really good ones, you gotta know somebody on the inside though. It's sort of like the best fakes of anything. If you're not deep in that circle, you're probably not gonna have access. A lot of things is about access. Somebody said, I'm from a poor family and I used to think like this, but eventually I grew out of it. I think that this is pretty common, man. I think especially when you're young, Andrew, I remember out of time, we could only buy Forever 21 clothes. Forever 21 clothes also designed to look expensive and be cheap. But I had a real LV wallet when I could only get Forever 21 and old Navy clothes. Yeah, and then also someone said, it's all about craftsmanship. Things like Montclair is a rip-off, but there are some luxury brands that really are worth it. Yeah, I do think that's true, but it requires you to be enough in the luxury where you sort of know which items from which brands resell a whole value appreciate, because it's not everything. I would say like probably 80% of stuff goes down, but there are some limited edition stuff. Okay, David, what do you think about this comment questioning the morality? Stop supporting brands that exploit Asian labor for wealth. Okay, and also a lot of these things are polluting the environment. So between Asian labor costs, because a lot of like poor Asians in Asia are working at these factories, or even poor Asians. Or even they might even import those Asians to Italy to make them in Italy, whatever. I guess that's a hard one, because obviously those people need jobs and these are jobs. So part of the economy, right? It's part of the economy. So it is a tough argument, but I understand, and I do understand that a lot of the fashion industry is polluting the environment. That's a whole different thing. Let me say this. I do wish that Asians built like luxury functional brands that were like maybe a fourth of the price, but still really nice, because I'm always on Amazon looking for new wallets. And I see a lot of really cool designs that the luxury brands would never touch, but they're not made with like the best materials. So what if there was a brand that came through and made these innovative, usable designs for productivity, but with better materials and then branded it and then Asians, instead of giving all the money, shout out to them, but to the European brands, we could give it to our own brands and we still have quality stuff. So almost like a more elevated Uniqlo, like a Uniqlo purple label, who knows. Somebody said, hey guys, you guys aren't gonna wanna hear this, but this conspicuous consumption absolutely includes sneaker heads too. Oh yeah, for sure, for sure, for sure. Somebody said, you know, nowadays this culture is out of control. The richest man in the world, Arnold, owns all the luxury brands. It used to be the tech guys. This whole thing is a bubble. Luxury is out of control in 2023. I mean, I think she has a point. That's why Karen Nicole's video went so viral, even though it's common sense, because this culture is peaking. Yeah, and also I will say this, even like three years ago, a lot of people did not know who the Arnold family was, but nowadays you kind of talk about wealth more and talk about brands, and we know at least who owns LVMH. Who's the head founder and CEO family of LVMH? It's these guys, and they're the richest family in the world. You know what's crazy, Andrew? It almost cycled back to Robin Leach in the lifestyle. I was the rich and the famous. And we own a 14th century French winery. And then for a while, it was all tech guys, Bill Gates, Elon, Steve Jobs. Now that the tech dipped a little bit, people back to the Arnold family, ruling the world, selling Hermes bags. I mean, somebody said, it really depends on the city you're in. In LA, people really like luxury. They may not have as much money as like, for example, people in SF, but people in SF, they're wearing like Patagonia and just like hiking vests, but they're worth like three billion in stock options. Yeah, I mean, I think overall, one of my takeaways to kind of round this out, and you let me know in the comments down below what you thought about the comments, about the different stances. Where do you stand on luxury goods? Obviously, depending on your financial decision, it might change. Or depending on what drives you, what's a trigger, right? Do material things drive you? You let me know in the comments down below. One thing I will say is like, I would say for 90% of people that you meet on an everyday basis, if you just wear some very well-fitting, and this is an argument for fast fashion, I know there's arguments against fast fashion, but if you just wear really nice, well-fitting Uniqlo or Zara or even H&M, and you look good and you look professional, that is going to get you farther, probably amongst like 90% of the people that you meet. Like you can actually change the way you get treated if you just buy one of the suits from H&M and Zara. Right. And then you just look nice. You know what I'm saying? You don't act, I'm saying for 90%, I'm saying there's 10% of people who will judge you. Oh, I could tell that this is an H&M suit or a Zara suit, and this guy doesn't have a Rolex on and actually doesn't have. He has an Invicta on. Yeah, yeah, yeah. There's 10% of people who are gonna notice, but 90% of people will treat you differently. I really think so. But anyways. Yeah, I mean, I think back to the luxury item thing, I think it is really different. I mean, just to address her main points, I think that a lot of luxury brands are finding that the non-rich customer base really likes the monogram items. They really like the flashy items, which are usually mid-tier. If you go to LV, you go to Gucci and you find their monogram stuff, they got a tiger or a bumblebee or whatever limited Murakami thing they're doing. That's usually a mid-tier item. Their ultra high-end stuff usually has some sort of quilted pattern on it. And then they're really, I guess, lower-end stuff like you can't even tell what it is. Oh yeah, that's a good point. Yeah, there are certain patterns. Obviously, the more logo out it is, it's probably more of the lower to middle tier of that brand. And I do think LV was starting to target a little bit more of the middle class and upper middle class, because there are brands, Andrew, that like, for example, people don't even know about like Kitan, Laura, Laurel, Piana. I mean, it's almost like an Invicta, right? That's the knockoff canal version, right? You know, shout out to Invicta. It's not a knockoff, but it's like a takedown. Then you got the Rolex Submariner, right? Which is almost like your basic new money pick, right? And then all the way, Andrew, they got watches like a Vacheron, which is like 30K, 40K, and you don't even know what it is. Right, yeah. So I think it is really like, there's like, it's weird because only old money people used to even know about this world. Then it started trickling down and now you've got the influencer world like boosting everything. I wish we could break out of this time, Andrew, but I just don't know when we will because people are like chasing what they see on the internet. The question is, if people stopped focusing on luxury goods as much, what do they focus their time on? And would they really focus it and put it into a productive manner? Because I think that there's no real argument. Like, I know people want to say like, oh, we should take our mind off the luxury brands and then put it towards something else. It's more productive. I'm like, who's to say people would even do that though? Right, like who's to say that those are the two choices, right? Yeah, I would, I agree with you that that would be ideal, but who's actually gonna do that? I don't know. I think the best, most realistic advice I could give to Americans, I cannot speak for like every country on earth, is to spend on what you really value, but save on what you don't value. For example, Andrew, we buy cold brew at home, right? In the big jugs for $6. You could get a nitro cold brew from Starbucks for $6 or $7. But of course the jug at home is gonna give you what like 10 cups, maybe maybe 12 cups, whereas Starbucks is one cup. So, you know, obviously we're not valuing, we still want the caffeine from the cold brew, but we're not valuing, I guess like, that whole Starbucks experience. I'm cutting back on it, but I'm buying like every single Jordan that's coming out that's our performance Jordan, because that's what I want. That's what I value. Yeah, for sure. I mean, I think I have an off white wallet and I also have a Stone Island jacket, but that Stone Island jacket, I plan on using it for years. Right, and it does hold its value to some extent. It does hold its value and it's very warm. So anyways guys, buy high quality things, but just be smart about it and also know why you're buying it. I think that's very important. I think ultimately what you said is true though. Literally, if you look really good and you got everything else on point, I think nowadays you could buy stuff at even clothing at Target and still look good, man. Hey, trust me, guys, you don't want to be one of these people with like all the logos on and then just whack hair, stinky breath, don't know how to talk, don't know how to move. Then you just look like some dumb rich kid who's using their parents' money, because usually, let's be honest, if you're successful and you had to work for money and you're trying to buy nice things to look better, you're probably gonna do a better job of looking better because you're already successful in other parts of your life. Anyways, longer conversation, guys. Let me know in the comments down below. We are the hot-pop boys. And yeah, until next time, we out. Peace.