This column is dedicated to all the brothers out there who are buying an engagement ring this weekend.
And there’s a lot of you.
According to the ABS, 120,000 people get hitched each year.
That’s 60,000 blokes, and 60,000 rocks.
It’s stressful (you know her taste … right?) and bloody expensive.
It’s a status symbol on a finger.
It’s a measure of your manhood.
The size of the rock is the size of your success.
But let me share a little secret with you: the engagement ring is one of the biggest marketing conjobs in history — right up there with the Marlboro Man.
In the 1930s, less than 10 per cent of couples sealed the deal with a diamond — today it’s around 80 per cent.
Well, it began in 1938 when a mining company called De Beers set out to make diamonds the symbol of love.
(Actually, the story really began 70 years earlier when De Beers found massive deposits of diamonds in South Africa and shrewdly stitched up a cartel that controlled 90 per cent of the world’s supply.)
The De Beers marketing campaign infiltrated Hollywood, paying celebrities to parade their diamond engagement rings in the magazines and newspapers of the day. De Beers also paid for diamonds to be ‘placed’ in Hollywood films, and it’s rumoured they were behind Marilyn Monroe’s famous song ‘Diamonds Are a Girl’s Best Friend’.
It was stunningly successful.
In 1938, De Beers sold $US23 million worth of wholesale diamonds in the US — today it’s $US2.4 billion.
And at the retail level, diamond jewellery sales were $US81 billion worldwide in 2014.
Diamonds are not only a girl’s best friend — they’ve also bought a lot of cocaine for marketing executives:
‘A Diamond Is Forever’ has appeared in every De Beers engagement advertisement since 1948.
It was voted ‘slogan of the century’ by Advertising Age, and with good reason. The brilliance of this line is that if you’re convinced that a diamond should be kept forever — and never resold — then the De Beers cartel can effectively control the price. And that’s exactly what they’ve done over the years.
The truth is that buying a diamond is like buying a brand-new car — in both cases, the moment you walk out of the showroom, 30 to 50 per cent of the value is lost.
Because diamonds are not really precious; they’re more common than dogs’ balls. Seriously, there are said to be 39 billion stones in existence — more than five for every person on earth, according to diamond analyst Martin Rapaport.
And what about the saying that a man should spend ‘three months of his wages on an engagement ring’?
De Beers marketing genius at work again.
It started out as one month, and it worked so well they bumped it up to two, then three.
On an average $65,000 wage, post tax, that’s a $12,750 outlay.
Remember, though, that diamonds are not an investment. They don’t increase in value. They’re just a multi-billion-dollar marketing machine created by a bunch of miners — to manipulate men.
Now, by all means, forward this article to your fiancée and say to her:
‘The Barefoot Investor makes some really excellent points. So, my love (you bending down on one knee), here’s a $35 cubic zirconia ring I bought off Gumtree. I’m going to invest the money I saved in a diversified portfolio of quality shares … Will you marry me?’
No, you’re not going to do that.
You’re going to buy a rock. Just like I did. Just like your father did.
Welcome to the club, son.
How Much Should You Spend on an Engagement Ring?
As any bridezilla will tell you, selecting a diamond comes down to the four C’s: Cut, Colour, Clarity and Carat weight.
But I’m not a jeweller, I’m a finance guy, so let me add another ‘C’ to the mix: Cost.
You can get a beautiful rock for a couple of grand, as long as you shop smart.
Don’t buy your ring at a name brand jewellery store — their markups are horrendous (especially Tiffany’s).
Instead, to get the best bling for your buck, do these three things:
First, go with a specialist diamond dealer for the rock itself, get some diamond prices based on having the ring set somewhere else (this is what I did).
Second, look at the prices from an online diamond jeweller. Most of the big players operate from the US and ship to Australia (and often their prices are often up to 30 per cent cheaper than you’ll find in a shopping mall here).
Finally, look at buying a ‘reject ring’ — one that was bought by some poor bloke who then got turned down by his bride-not-to-be, and is now sitting on gumtree.
Harsh? Sure. But someone’s ‘no!’ is your ‘hell yeah!’ Just make sure you get it inspected (it should come with a valuation certificate from a valuer registered with the National Council of Jewellery Valuers, as well as a grading certificate).
Whatever you end up doing, don’t blow your wad on a ring.
Trust me on this. If she says ‘yes’, you’re about to enter the most expensive decade of your life — the Triple Ms (Marriage, Mortgage, Midgets). Brace yourself for the wedding venue bill, the Bugaboo stroller, and the $100,000+ house deposit.
Shine on you crazy diamond.
Tread Your Own Path!