Three ways to supercharge your investments and your wardrobe!
At The Curve, we have talked a lot about how important it is to invest in high quality companies and take a long term view. This investing mindset can be utilised when investing in many different assets or items, not just stocks. One of those items is Fashion. Now, this may seem a bit strange, but hear me out.
Despite the fact that clothing tends to depreciate overtime (meaning, the more you wear it, the less it is worth), there are actually a lot of similarities between investing in stocks and investing in fashion.
Firstly, you should always invest in quality. Whether it’s fashion or stocks, a high quality investment will go the distance. A high quality company is one that has delivered sustainable revenue and earnings growth over a long period of time. there is a higher chance that it will do well, even in a tough economic environment. With fashion, a garment that is well made and therefore of high quality, is more likely to go the distance - even in the toughest of conditions!
Secondly, invest for the long term. Holding a stock for the long term means you are less susceptible to the ups and downs of the market and you can take advantage of compound interest. Some high quality pieces of fashion e.g a vintage leather jacket, also compound in value and actually appreciate in value the longer you hold them too.
Thirdly, don’t invest outside your means. Don’t take on debt or spend your entire monthly paycheck on an investment. This applies to stocks and fashion. Investing in stocks always involves risk, and therefore the risk that you could lose all your hard earned savings.
As an investor, before you decide to invest in a company, you should be thinking ‘what will be the return on my investment?’, ‘If I invest $x, for 5 years, what do I expect will be the possible return on my investment?’. Obviously, the higher the better! The same mindset should be used before purchasing an item of fashion. You should be thinking ‘if I spend $ on this dress, and wear it X times, what will be my return on investment’’. In this case, the greater the number of times you wear your piece of clothing, the greater the return. (Also, the more you focus on cost-per-wear, the less items of clothes you will likely purchase, which is great for your wallet!)
Like any veteran investor, you should always ‘buy low and sell high’. If it’s a high quality fashion item, wait and buy it when it is on sale. The same can be said for stocks. Whilst trying to ‘time the market’ can be tough, buying a share in a company when the market falls, can lead to better returns (because you are effectively buying the share at a discounted price).
So next time you are out shopping at the mall, or thinking about adding items to your online cart, think - is it high quality? Will it be a long term investment? And what is my expected return on investment? The more frequently you use an investing mindset, the more secure you will be in your financial future.