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Diamonds – Nothing But a Brilliant Illusion

It must be Canada week here at Frugal Fringe. Here’s an article from the great Manitoban blogger Free to Pursue (F2P) in which she dishes on the diamond industry. I don’t want to give anything away, so let’s just say her reasoning all rings true—with clarity!

F2P is a terrific writer who has rearranged her life to focus on the pursuit of happiness. If you’d like to read more from her, here are three of my favorite posts:

*   *   *

My engagement/wedding ring is the top ring. The ring below is another cubic zirconia I wear.

I love my engagement ring. My husband designed the set (engagement ring and wedding ring) and it means the world to me. It’s unique and beautiful in its simplicity…

…and the diamond is a fake.

When we discussed our rings, we decided that my ring’s design would include a pear-shaped diamond and we started shopping for it to ensure we could find it in plenty of time before the Big Day. One stop during our hunt for the right gem was a jewellery store at a local mall. There, we saw a stone that fit our shape and size requirements and the saleswoman started speaking to us about the characteristics of that particular stone—you may be familiar with the 1938-born classic 4Cs: cut, colour, clarity and carat.

Upon closer inspection, I noticed a major flaw in the stone that ran diagonally through it for nearly its entire length. The saleswoman said it was a feather (read: a crack inside the stone itself that affected its durability and clarity). She insisted that this feather was a feature unique to this stone, stressing that features such as this are characteristic of real mined diamonds and help differentiate them from man-made alternatives. I didn’t have to be a gemologist to understand that was a load of bunk. And the price of this one-carat pear-shaped gem in 2000? A cool $6,000!

This conversation, and similar exchanges with other salespeople, made us stop and think about what we were doing. We were buying a diamond because…well…that’s just what you DO! We gave our heads a shake and realized that we didn’t particular need or want a diamond per se, just a stone to complete the design we’d agreed on.

With a quick search online, we found we could get a flawless cubic zirconia, a stone nearly as hard as a diamond, for 1% of the cost of the real deal!

Well, we went for it! I mean, what did we have to lose?

We bought the cubic zirconia on the internet. It’s a beautiful stone. The jeweller who custom-made the setting was upset with our decision (sorry, we didn’t care what he thought) but once finished, the rings were, and still are, beautiful.

Are diamonds really a girl’s best friend?

At age 25, that $6,000 was a SIGNIFICANT sum of money* and we felt we could come up with many better uses for it than a gem that would do nothing useful for us, other than enable us to fulfill a social obligation.

F2P insert NEW goodwifeDon’t get me wrong. I grew up with the same thoughts and feelings about diamonds as the next girl. They’re beautiful, lasting and a powerful symbol of love, commitment, security and current or future social standing. In short, it’s a measure of how much you, the recipient, means to the one making the offering, your significant other. The gem communicates all these things without having to utter a single word—effectively portrayed in this poster for the popular TV show “The Good Wife”.

And that’s the problem. Because the relatively recent tradition has simply become an understood step in the courting process, a suitor doesn’t believe there’s a choice and bringing up the subject can have disastrous results. And, for women, there’s perceived value in seeing just how much you mean to your partner; how much is he willing to sacrifice to show he’s worthy of gaining your hand?

The strong social deterrents to opting out of the “diamond offering” as a necessary step in a couple’s courtship masks a number of larger issues due to its strong emotional undercurrents. Namely, we tend to disregard the following realities:

  • Diamond engagement rings, and subsequently gifts of diamonds to mark special occasions, is based on a fabricated and fairly recent social expectation based on savvy marketing by the De Beers diamond cartel.
  • Diamonds don’t retain their value. At best, they hold their wholesale value, but you can’t sell a diamond for the retail value consumers pay. Don’t believe me? This astounding 1982 article by J. Epstein will convince you of these facts**.
  • These precious stones serve no practical purpose day to day and are prone to breakage or damage, loss, and theft due to significant wear—likely causing households to pay insurance costs for holding such property.

So why do we care so much? Blame it on a powerful marketing machine.

It’s been a mere 75 years since De Beers convinced North Americans that diamonds are a necessity thanks to a successful marketing campaign started in 1938. The campaign made heavy use of new marketing vehicles, such as TV and motion pictures. Everybody who was a somebody in Hollywood was sporting some “bling”. We still quote their 1947 campaign slogan today:  “Diamonds are forever.” and celebrities still show off these pricey gems on the red carpet and the big screen.

To this day, despite the commoditization of diamonds,—current supply far exceeds demand due to continued discoveries of significant deposits throughout the world—De Beers contends that diamonds are not a commodity because each one is unique in its own right***. That argument could be made for many other commodity products, none of which warrant the exorbitant price.

And it gets better

Have you heard of “chocolate diamonds****”? This is yet another fabrication from the diamond industry. Brown diamonds are now marketed as the newest craze, but what are they? An over-supply of industrial-grade diamonds (see this article on Jezebel.com for more on brown diamond marketing).

Bottom line for the diamond industry: If you can’t sell diamonds, spin the message and the market will eat it up. They’ve been successful so far in regulating supply and spin, so why stop now?

Am I cold-hearted? I think its just the opposite.

It’s never about the “stuff”. It’s about how it makes us feel. At their core, all purchases are emotional. Show me one that isn’t, whether personal or business and I’ll prove otherwise. There’s irrationality in nearly everything we do and the marketing machine knows it all too well.

How else can you explain that a nearly-clear stone of rather modest size compared to most objects we value in our day-to-day life carries such psychological weight and meaning? And what about the box in which it’s setting is presented? Tiffany’s anyone?

When stripped of the marketing hype, it’s nothing more than a clear mineral that, once cut and polished, has come to be understood as a necessary component of a person’s expected life steps in western society*****.

Every society has such symbols. It’s a natural aspect of cultural evolution. What makes this type of cultural evolution different is that its development was anything but natural and progressive. The more we understand that fact, the more we communicate with our significant other, the more we can invest in what brings the most lasting value to our lives and our relationships, regardless of social expectations or marketing dogma. I only wish those conversations weren’t so taboo.

If my husband and I had not had the touchy “rock” conversation, I’d probably have a pretty naturally-sourced stone on my finger that looks exactly like the one I have, minus an absolutely amazing honeymoon in Jamaica. Now that was a $6,000 we feel was well spent on a truly unique and memorable experience.

Are you thinking of taking the plunge and buying the all-important “rock”?
What do you think of the diamond “tradition”? Is it a good thing? Will it last?

*The average cost of a diamond engagement ring is $4,000. If a 25-year-old couple were to invest that sum in the stock market instead, based on historical average whole-market returns of 9% and the rule of 72, they would have over $100,000 at age 65. That sounds more like a “happily ever after” than does a tiny gem thats not likely to appreciate in value.

**Written over 30 years ago, I find it shocking that Epsteins article, and related book, The Rise and Fall of Diamonds, has had little to no effect on the diamond industry.

f2p bloomberg insert***For an overview of the De Beers group of companies and its diamond production and distribution, see Inside De Beers, Bloomberg’s Unprecedented Access.

****They also go by the name champagne, cognac or caramel diamonds. Im sure there are other names as well, all equally delectable.

*****They convinced America in the 40s and were also successful in doing the same in Japan in the 1960s. Additional markets are also in their sights. We will have to wait and see whether the diamond craze will be a global phenomenon.

Topmost Photo by Kim Alaniz

 

 

 

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20 Responses to Diamonds – Nothing But a Brilliant Illusion

  1. Emily @ Simple Cheap Mom October 15, 2014 at 3:06 PM #

    Your ring looks beautiful. My engagement ring was a kitten, so a lot of what you said here I could really agree with a lot you said!
    Emily @ Simple Cheap Mom recently posted…Things I’m Thankful For This ThanksgivingMy Profile

    • Free to Pursue October 16, 2014 at 1:09 PM #

      Thanks for the compliment Emily. A kitten? How cute is that!? Happy to hear a “diamond substitute” worked for you ;).

  2. Myles Money October 18, 2014 at 5:52 AM #

    Isn’t it amazing what we all get pushed into by marketing? It’s taken for granted that a diamond ring is pretty much the *only* way to propose, and really it makes no sense at all that a soon-to-be-married couple would first get themselves into debt before starting out their married life. And for what? To conform to society?

    It must be hard to buck the trend — particularly if you’re the guy suggesting the cheaper, more sensible option — but I would opt for the amazing honeymoon too.
    Myles Money recently posted…Leftover Lunch | #FrugalFridayMy Profile

    • Free to Pursue October 19, 2014 at 4:11 PM #

      I couldn’t agree more Myles. What an important financial discussion to have right up front. I hope more couples will have that all important discussion before tying the knot.

  3. debt debs October 19, 2014 at 4:48 AM #

    I must admit I fell into the diamond hype with an engagement ring, an 10 year anniversary band and now I also wear a solitaire belonging to my mother that my Dad gave me when she passed away. It isn’t her engagement ring but her “me” ring that she bought with her own money in later years. For sentimental reasons I cherish it, but after reading this I will attach more meaning to it because even though she had a bit of Jonesying going on she was actually quite frugal. She worked hard and wasn’t retired long enough to enjoy the fruits of her labor. So in some ways I’m glad she got to enjoy some of it before she was FI. Don’t get me wrong, I’m still a big proponent of FI, but not to the total exclusion of what’s important to you. Now should diamonds be part of that? That’s personal preference, but I would say that the blood diamond mining practices do give me cause for concern the most. I’m not sure I would purchase a diamond if I was young and getting engaged today. However, that introduces another social stigma to be overcome slowly until cubic zirconias and engagement kitties and dogs become commonplace. Great article, F2P!
    debt debs recently posted…55 Reasons it’s Okay To Be 55My Profile

    • Free to Pursue October 19, 2014 at 4:18 PM #

      Thanks for your comment DD. Sounds like your mother’s ring brought her a great deal of joy and now does the same for you. That’s what’s truly important in the end, isn’t it? That it brings more emotional value to you that anything else might?

      You also bring up a good point about blood diamonds. It was difficult not to include that angle in the article as well, especially after my recent trip to South Africa.

  4. jlcollinsnh October 23, 2014 at 11:33 AM #

    A brilliant post that cuts to the heart of the issue. 😉 Sorry, I couldn’t resist.

    34 years ago when I was shopping for and designing my wife’s engagement ring I fell into the diamond trap.

    I was convinced that diamonds were an investment and only flawless would do. My goodness what a babe in the woods was I.

    Anyway I went with a flawless 1/2 caret. My wife has always loved it, but almost from the start I regretted not buying a full caret for the same money. Would have made for a prettier ring and even if it had investment potential – ha! – it’s not like we ever plan to sell the damn thing.

    Now you come up with an even better option: CZ!

    Even for those who have doubts, I’d say start with the CZ and invest the money. You can always replace it with a diamond later if that becomes important. My guess is, it never will.

    • Free to Pursue October 23, 2014 at 6:38 PM #

      Thanks for dropping by and adding to the discussion JLC. Your advice is right on the money as far as I’m concerned. Although we didn’t invest the money the diamond would have cost us (unless you call a honeymoon an investment ;), we went for the CZ and thought that if we ever felt that it had been a mistake, we could always replace it with a diamond. Well, over 13 years later and we have never thought about replacing it with a “rock”.

  5. Amy October 26, 2014 at 12:38 AM #

    I was watching ‘Storage War’ series recently and they found an old trunk box in the storage that they bought. Guess what is in the trunk box? 2 pieces of 4 carat real diamond rings! I felt really crushed of how easy the people who found it selling it away for $10++K, who knows how difficult the buyer save his/her money to buy those diamond rings but in the end found by strangers and sell it away??

    My point is once you leave this world everything will be left behind, and the best way to enjoy life is to create wonderful memories and live life to the full.

  6. Lisa October 31, 2014 at 11:23 AM #

    Love love LOVE this! When shopping for engagement rings, I didn’t want my fiance to spend the “standard” 3 months worth of salary on it. In fact, I told him the less he spent on the ring, the better! Not to mention the whole blood diamonds controversy…
    Lisa recently posted…Links Lisa Likes – Engagement Party RecoveryMy Profile

    • A Noonan Moose October 31, 2014 at 11:31 AM #

      So “diamonds are a girl’s worst fiend”? 😉

    • Free to Pursue February 9, 2015 at 11:46 AM #

      Good for you Lisa. Nice to hear you and your fiancé were on the same page.
      Free to Pursue recently posted…Valentine’s Day BluesMy Profile

  7. Jeremy @ Go Curry Cracker! December 26, 2014 at 12:44 AM #

    We avoided diamonds as well. Neither one of us wears a ring, but we do wear jewelry that Winnie made herself from local silver while we were living in Mexico

    A few months ago I read an article published by economists at Emory University, correlating the cost of a ring and wedding with rate of divorce. The more you spend, the more likely you will divorce

    “In other words, Bridezilla equals Divorcezilla,” he says. “Don’t let advertisers fool you into spending your life savings on your wedding.”
    http://nypost.com/2014/10/15/the-pricier-the-ring-the-likelier-the-divorce/
    Jeremy @ Go Curry Cracker! recently posted…Merry Christmas and Happy Holidays!My Profile

    • A Noonan Moose December 26, 2014 at 8:34 AM #

      Thanks for the great link Jeremy!

    • Free to Pursue February 9, 2015 at 11:50 AM #

      Wow! Likely the correlation is with 1. a household’s debt to equity ratio (leverage anyone?), 2. materialism winning over what truly matters, or 3. Both. Talk about making the diamond ring a symbol of love lost as opposed to the everlasting sort. Great food for thought.
      Free to Pursue recently posted…Valentine’s Day BluesMy Profile

  8. White sapphire September 17, 2015 at 10:02 PM #

    Everyone will be shocked when they find out it was a cubic Zirconia since its similarity to diamond. I’m one of them who really do not take too much attention on what gem on people’s ring, as long as suit to the wearer that’ll be fine to me. If the financial situation does not become a problem, then buying some precious diamond rings will be fine.
    White sapphire recently posted…Cubic Zirconia vs Diamond, The DifferencesMy Profile

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