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The Strategist’s Guide to Buying a Diamond Engagement Ring

There are a lot of great reasons not to buy a diamond so this article assumes that you’ve already decided to buy a diamond and are looking for the appropriate strategy for making the right purchase. What follows is the result of many dozens of hours of research that I did for my fiancée’s engagement ring. So while this content is catered to diamond engagement rings, the advice is applicable to loose diamonds, earrings, and necklaces as well.

The Objective

The objective is simple: Purchase the best-value diamond within your budget.

But our strategy – a well-aligned set of activities that result in a valuable position within a competitive landscape – is less straightforward.

In this case, we’re competing against the diamond industry as a whole and diamond retailers specifically. Buying a diamond is also competing with all of the other things that consume your time, energy, and brainspace. The position that you want to occupy when you’re ready to purchase is unemotional, well-educated, outcome-focused, patient, confident, and prepared to make tradeoffs.

If you just want to get something to put on your fiancée’s finger and don’t care about value or cost, then employ the same strategy that most guys do: Ask your future sisters-in-law or mother-in-law to guess about “what she likes.” Then ask your guy friend who was most recently engaged where he got his ring. Go to his recommended jeweler with a budget in mind and do your best not to spend twice as much as you’d hoped. You’ll have the ring within a few days so you can pop the question and you can have it properly sized to her finger a few weeks later. This is a solid strategy for checking all the boxes, especially if you don’t want to invest the time and energy to get something high value.

However, if you want to understand my strategy for getting a high-value diamond within your budget, keep reading.

Make Smart Choices

Because diamonds are so expensive, buying the right one is a decision worth taking seriously. It’s important to choose to make the most rational decision you can now, before you face the enormous emotional, marketing, and societal forces that you’re about to encounter. It’s critical to understand how the cards are stacked against you so that you can put yourself in the best position to achieve our objective.

Emotional Decision Making

Think about a large & important financial decision you’ve only made once or twice in your life – where to go to college, which job to take, which car to buy, which apartment to rent, or which house to buy. Now imagine complicating that decision by coupling it to a second enormously emotional decision: whether to spend the rest of your life with someone or not.

That is the emotional state most people have when they walk into their local jeweler, and it’s why so many people get ripped off buying diamond engagement rings. If your only criteria for buying a diamond is the love in your heart, then you will likely buy something you can’t afford and isn’t very spectacular.

Emotions are a critical part of the decision-making process. In fact, people who have had the emotional centers of their brains removed or damaged struggle to make straightforward decisions like what to have for lunch.

So my advice is to be objective and rational where you can be (diamond X is objectively better than diamond Y) and do your best everywhere else to make decisions you won’t regret (especially regarding budget).

Overcoming Marketing Half-truths

You’re not going to be able to escape a century of diamond propaganda but you can acknowledge that nearly everything you know about diamonds was probably told to you by the very people who sell diamonds – people who want your money more than they want their diamonds.

Diamonds Are Forever

Advertising Age called the 1948 “Diamonds are Forever” marketing campaign the greatest marketing campaign of the 20th century.

The De Beers company (and cartel) has had brilliant marketing like this for nearly a century, and the very fact that you’re even considering a diamond engagement ring is proof. Diamond engagement rings weren’t popular until the 1930s, and the primary success of their marketing campaigns is rooted in convincing women that men don’t love them unless they buy them a big diamond ring. Entangling love and diamonds encourages emotional decision making, which makes the diamond industry more money.

“When you’ve found the woman of your dreams, give her the diamond of her dreams. Two months’ salary guideline helps you find a diamond of quality, brilliance and breath-taking beauty.” (De Beers, 2001. Source: magazine-advertisements.com)

Oh, and diamonds are definitely not forever – In reality they’re quite brittle and easy to lose.

This excellent video humorously paints the picture of “why engagement rings are a scam …but you’ll still end up buying one.”

The 4 Cs (That Jewelers Want You To Ask About)

We’ll talk extensively about the famous “4 Cs” – Cut, Clarity, Color, and Carat – but you need to know up front that the 4 Cs are a marketing meme created to help sell more diamonds. By getting just a little education about diamonds (from the diamond industry), people feel empowered to make a great decision. The 4 Cs were also a way to improve the sales of smaller diamonds since jewelers could highlight other features aside from the mass and size of their diamonds. It’s genius and it’s made the industry countless billions of dollars.

Budget

The “5th C” when evaluating a diamond is cost. But how much should you spend on a diamond engagement ring? Don’t worry, diamond advertisers have the perfect answer for you: 2 months salary. Or was it 3? Surely your love for her is worth at least a few months of your income – I mean, you are going to spend the rest of your lives together.

The marketing and advertising history of diamonds is fascinating and would make an excellent case study for me to do. If you’re curious, learn more here:

Of course, focusing exclusively on the cost of the diamond is the wrong answer anyway. It’s better to set a budget for the entire ring and then figure out how you want to allocate that between the different components of the finished product.

The easiest way to spend more money than you want to on an engagement ring is to not have a budget. Before you even look at diamonds, you must set an initial budget. That means you’re going to have to sit down and look at your finances and make a decision about what you can afford and what you’d like to spend.

I recommend picking a number you’re not willing to spend more than and then subtracting 20% from that number to create a range. Make it clear to anyone you talk to about budget that you are not willing to go even 1 penny over that upper number – all in. And don’t forget about the cost of the ring, any fees associated with setting stones, taxes, any sort of customs fees if that’s applicable, and annual insurance. It’s also okay to spend less than your range – something that might happen if you take the time to do your homework.

But how do you pick an amount? All I can offer you is a few tips and things to think about:

    • There is no formula and anyone that has one is probably trying to sell you something.
    • A diamond ring is a luxury purchase and should only be made if you have the disposable income to afford it.
    • Generally speaking, going into debt to buy a luxury good is a horrible decision.
    • Diamonds are a terrible investment so don’t even think about the resale value (which, FYI, will definitely be less than 70% of whatever you pay).
    • The cost or size of the diamond does not represent how much you love someone.
    • How much is too much? How much would cripple your joint finances? You should probably spend way less than that.
    • If you’re buying an engagement ring, remember that you’re planning to spend the rest of your lives together. You’re going to have plenty of opportunities in the future to buy her jewelry or even upgrade her ring.
    • Will she wear the ring everyday? If not, then you might decide to spend less money since she’ll be getting less value from the ring. This is a conversation I’d have explicitly with your fiancée.
    • Try to translate the expense into the terms of another luxury good. What else might you spend this money on? For example, how many days of your favorite vacation might a ring be equivalent to? What would that cost?
    • How much is too little? That number may be $0, but you may also feel good about making a financial sacrifice as a symbol of your love.
    • If you’re worried that you are budgeting too much, then you probably are.
    • Once you pick a total number, write it down or tell a friend. Having someone else to hold your future self accountable to the decision your current self is trying to make responsibly can relieve a ton of stress down the line.

What Really Matters

Imagine yourself 5 or 10 years into the future and look back on the moment that you’re currently in. What’s going to really matter to you and your fiancée when you think back? Will it be how much you spent? How big the diamond is? The exact details of how you asked her?

I know it’s not as romantic and not as big of a surprise, but if you can both go get educated together and have a few frank and open conversations about an engagement ring, you’re much more likely to get a ring you’ll both happy with long term. After doing some research together you may even find out that you don’t want a diamond at all – which will save you a ton of money and anxiety.

I asked my fiancée to marry me fairly spontaneously in the middle of a crazy art and music festival in the high deserts of Nevada (Burning Man), so I hadn’t purchased a ring yet. We just used another ring she was already wearing while I got my act together and bought her engagement ring.

She said yes! (Sept 1, 2017, Black Rock City. Honey Bear by fnnch)

As a result, we were able to take a few weeks, get educated, visit a jeweler, and I bought a diamond ring that we both love. And it was another big surprise when I gave her the ring.

It’s ok to feel resistance about the idea of proposing without a ring – it’s exactly what we’ve been told to feel. But also know that involving your fiancée is an option too and that whether the whole thing is a huge surprise or you’ve tried on some rings together, all these scenarios have their own tradeoffs and sacrifices.

At the end of the day, this is about the two of you, not anyone else. So do it your way.

Understanding Value

Like most industries I study, one of the very first things I learned about the diamond industry was how much there was to learn – about the industry, it’s history, and diamonds themselves. Things are further complicated by the fact that no two diamonds are exactly the same – they’re all technically unique. And while their unique status doesn’t necessarily increase or decrease their value (oranges and snowflakes are all unique too), it does complicate the process of assessing and comparing diamonds and their prices.

There are a lot of relevant variables for diamonds. In addition to cut, clarity, color, & carat (“the 4 Cs”), there’s certification, and shape, which is often confused with cut. And then there’s the ring itself – the material, color, and design of the setting. I cover all of these, and more, in detail in another piece so that we can remain focused on strategy here.

The point is that there’s a lot to consider when purchasing a diamond and if you don’t have a solid understanding of what gives a diamond value, then you’re almost certainly going to get a bad deal.

Buying a Low-value Diamond

If you’re buying a diamond for an engagement ring, then you probably value things like the meaning it has as a symbol of your commitment to one another and the signal it sends to your families, friends, and broader community. It’s also usually a gift, which carries value in itself. An engagement ring might also represent a sacrifice one person is making – a display of disposable income. The value of these things is primarily dependent on the person.

But there’s one thing that almost all people value about diamonds: their beauty. And a diamond’s beauty is entirely created by the quality and quantity of light leaving the diamond and hitting our eyes.

Fortunately for us, the beauty of a diamond is fairly objective once you leave the carefully crafted lighting environment of the jewelry store.

Many diamonds are objectively bad. Dull, yellow, and obviously flawed diamonds are not very pretty but they’re still expensive – low value, high cost. These are the worst diamonds you can buy but they’re also the easiest to buy. Usually, these diamonds are objectively bad because they are cut to minimize the waste when cutting the rough diamond and so major sacrifices are made to the geometry of the diamond.

Cut geometry is the worst place to cut corners for high quality brilliant diamonds that look great outside of the hundred thousand dollar light system of the showroom floor. Rough diamonds aren’t interesting at all to look at. It’s only once they’ve been cut and polished that diamonds look gorgeous. While cutting them in optically non-ideal ways may mean that there’s more diamond to sell, there’s not necessarily more that can be seen once the diamond has been set.

The other piece of good news is that there’s a limit to what the human eye can and can’t see and that threshold can be partially defined in terms of certain variables. Buying diamonds with features that are substantially above those visible thresholds is a waste of money.

So, going back to our objective – to help you purchase the best-value diamond within your budget – we want to find diamonds that are just barely above the thresholds that make them as pretty to our eyes as possible.

In the 2nd part of this article, I detail guidelines for what and where the thresholds are for each of the key variables that make diamonds visually attractive – so we can spend our limited budget on the features we can actually see and enjoy.

Buying the Wrong Diamond for You

While some diamonds are objectively bad because of certain variables, other variables are more a matter of personal preference.

The ring’s style, setting, and color are all areas where you’ll want to understand your fiancée’s preferences. In addition to knowing the ring’s characteristics – which may affect what diamond you’ll get – you’ll want to know what shape diamond your future-fiancée wants.

To do this, I highly recommend taking your future fiancée to go try on rings together at a high-end retailer. Not only will you have the perfect opportunity to get her ring size accurately measured but you’ll also get to see a lot of styles, shapes, and sizes side by side.

And, of course, you might avoid buying the worst diamond that you could possibly buy: the diamond that you didn’t need to buy.

Decrease Disadvantages

Information Asymmetry Disadvantage

Information asymmetry is an economic concept where one party in a transaction has more or better information than the other. Let’s say that Schmartha Fluert, the famous television personality and homemaker, finds out that the Food and Drug Administration (FDA) is going to announce tomorrow that a biopharmaceutical company, KloneCo, is not going to have their new drug approved for public use. If Schmartha Fluert were to attempt to sell her shares of KloneCo before the FDA made this information available to anyone else, the Securities and Exchange Commission (SEC) might call this “insider trading.” I would call it an excellent (and purely hypothetical) example of information asymmetry because the seller, Schmartha, has important information that buyers don’t have.

While buying a diamond from a jeweler is similar to buying Schmartha’s KloneCo shares, there are 2 main differences: 1) There are laws against what Schmartha allegedly did and 2) Schmartha’s information was truly a secret while information about the diamonds you’re considering is much more knowable. That means that while you’re not really protected from shady diamonds retailers (“buyer beware”), you can educate yourself so that you can avoid bad deals.

Finally, buying an engagement ring is not something you do every day. But selling engagement rings is something that jewelers do every day. You are at an inherent disadvantage in the jewelry buyer-seller relationship – both in terms of the information you have and the experience you have at the bargaining table.

The follow-up to this article and the additional resources I’ve put together contain the minimum information you need to help overcome this information asymmetry.

Beware False Confidence

But don’t get over-confident. No matter how much you research, you’ll probably never have more expertise or knowledge than the seller. Worse yet, once you’ve learned a little about diamonds and rings (usually the basics of the “4 Cs” from your local, overpriced jeweler), it’s easy to fool yourself into thinking you know enough to make an educated decision.

So arm yourself with as much information as you can, don’t be afraid to go to retailers multiple times to extract knowledge and prices from them. Just be sure not to be seduced by your jeweler, who will work their hardest to make you like and trust them.

Beware of Diamond Decision Fatigue

Decision fatigue “refers to the deteriorating quality of decisions made by an individual after a long session of decision making.”

Because of the overwhelming volume of novel information that’s going to be thrown at you and the number of decisions you’ll be asked to make when selecting a diamond, “Diamond Decision Fatigue” can leave you open to being manipulated into buying something you don’t understand or want.

Purchasing a diamond isn’t meant to be easy. But avoid the temptation to simply trust whatever jeweler is in front of you when you’re most exhausted. So when you find yourself suffering from Diamond Decision Fatigue and don’t want to get ripped off: stop and take a break.

Buy from the Correct Retailer

There are only a handful of places to buy diamonds: low-end jewelers, high-end jewelers, estate sales, antique stores, resale marketplaces, online, and – of course – your “friend’s buddy” who will give you the “best deal” in town.

While every diamond is technically unique, diamonds are commodities. The vast majority of diamonds are also fungible, or nearly fungible. An item is fungible if it’s units are interchangeable. Pure gold, for example, is fungible. 1 gram of gold in a Swiss vault is interchangeable with a gram in Ft. Knox. Money is also fungible. Your $10 bill is completely interchangeable with 2 of my $5 bills. Once gasoline has been certified to be of a certain grade, it’s fungible too.

While diamonds aren’t exactly fungible, most diamonds are more-or-less interchangeable. Some rare diamonds, like the most famous diamond in the world – the Hope Diamond – are definitely not fungible. Not only is the diamond exceptionally rare because of it’s unique blue color and enormous size (although there are at least 2 cuts diamonds that are 10 times more massive), it’s history makes it irreplaceable.

But since you’re not in the situation to buy an irreplaceable diamond, you can rest assured that any diamond you buy could be interchanged with another similar diamond.

We’re going to use these facts – that diamonds are both unique but semi-fungible – to our advantage.

Middlemen

Whether we’re talking about diamonds, beer, or mattresses, the more middlemen who stand between the manufacturer and the end customer, the more markup a product will have. These middlemen all need to make a profit and you and I are the ones who foot the bill. That’s why companies like Casper are popping up to sell amazing mattresses directly to customers – disrupting the expensive, inefficient, and capital intensive retail showroom distribution channel.

Middlemen – Showroom floors of mattress and jewelry. (Sources: rileysfurniture.com, jasonsjewelrync.com)

Unfortunately for beer lovers like myself, prohibition-era (late 1920s) laws require that brewers and distillers sell their product to distributors, who mark up the product while adding little or no value, and then sell it to retailers, who then mark it up again and sell it to you and me.

The exact same thing is true for diamonds – the more middlemen there are, the more expensive the end product is going to be for you and me. But, unlike the alcohol industry, there aren’t any laws requiring distributors in the supply chain.

So if you’re looking for to buy a high-value diamond for as little money as possible, one of the best things you can do is to get educated and purchase from one of the reputable online retailers. These online retailers can make a healthy profit while charging you substantially less than brick and mortar jeweler – just like the online mattress companies. And because they don’t have to hire pushy salesmen to stand in their fancy stores, you don’t have to deal with gross sales tactics either.

So as not to make this strategy article too long or too much of a sales piece, I’ve written a separate piece about why you should buy your diamond online.

Final Thought

I want to share one final thing about this entire process that was a surprise for me: I’ve spent dozens of hours doing the initial research, making a purchase, and then researching and writing and publishing about 10,000 words of content. I’ve looked at hundreds of diamonds in person and online – with my naked eye, at 10x, 20x, and even 60x. I understand the structure of the diamond industry, it’s disgusting little corners, and gross history. I understand the economics and I understand that the diamond I bought isn’t unique in any meaningful way.

Once I started getting deep into this process, I got worried that I was going to become totally jaded about diamonds.

But after all that, whenever I think about or see my fiancée’s ring, it really does feel like that little polished clear stone has something magical about it. I know this is just my brain tricking itself – because I’m the one who knows exactly how to find 15 diamonds exactly like it. But it’s a trick I’m happy to fall for – especially since I was able to have the discipline not to fall for it during the buying process. Even though we value the beauty of our diamond, ultimately, it’s the symbol and meaning behind the ring that’s really special to my fiancée and me. And if her ring ends up taking on some of our love for one another, I’m okay with that.

Bottom Line: The strategy for buying a diamond (engagement ring) is:

    • Commit to making a good decision
    • Understand the value of diamonds generally and their value to you specifically
    • Dramatically reduce your information asymmetry disadvantage by doing your homework
    • When you’re ready, buy from the right retailer
    • Stick to your budget

Be sure to check out

How to Evaluate a Diamond Engagement Ring

If you haven’t read the The Strategist’s Guide to Buying a Diamond Engagement Ring yet you should probably do that before reading this.

Get Smart on Diamonds

If our objective is to buy a high-value diamond within your budget, then one of your most critical tactics is to get smart on diamonds. This article covers the properties that have the biggest impact on how diamonds look to your naked eye. Since paying for features you can’t see is a waste of money, each section below discusses where the thresholds are for these visible properties and how to maximize value while staying within your budget.

The “4 Cs” Are Marketing

Despite the marketing half-truths I discuss in the strategy article, the 4 Cs – Cut, Clarity, Color, and Carat – are real variables to consider when purchasing a diamond. But we need to alter the 4 Cs and add a few more variables to the equation as well: Certification, Ring (Style, Setting, Material & Color), Cut, Shape, Clarity, Color, and Carat are the most important factors for accomplishing our objective.

We’ll also add a lot more nuance to the 4Cs than the over-simplified sales pitch you’ll get from your local jeweler.

Don’t panic. None of this is really that complicated, it’s just different than what you may have been told by the diamond industry. And I’ll give you some clear guardrails at the end to keep you on track.

Certification

Certification affects nearly every one of the other factors of a diamond so I need to address the basics now so that some of the specifics make more sense as they come up below.

If I handed you a clear stone that sparkled beautifully and told you that it was 3 carat flawless, colorless, perfectly-cut diamond worth over $200,000, how would you know I was telling you the truth?

What do these words (flawless, colorless, perfectly cut) even mean? This is the problem that certifiers help address. Certifiers give us a common vocabulary so that we can talk consistently about the qualities of a diamond.

So it’s absolutely critical that any diamond you buy be certified. But not all certifiers are the same. In fact, some are basically fraudulent and most are just bad at what they do.

Shady diamond wholesalers will work with certain certifiers to basically lie about the quality of their diamonds so that they can sell low-quality product at a higher price. Other certifiers have the major problem of not being able to consistently certify a single diamond the same way twice.

So it’s not only critical that diamonds be certified, but it’s critical that they be certified by someone who has a trusted brand.

Finally, it’s a no-brainer that the certifier be a third party – a diamond retailer shouldn’t be certifying their own diamonds. If the seller is also the certifier, they have a perverse incentive of maybe wanting to fudge how good their product is. It’s better to avoid companies that have such terrible moral hazards – even if they have a generally trusted brand.

As of late 2017, there are only two certifiers who meet these criteria. The very best in the industry is GIA. If you can’t get a GIA diamond for some reason, then only settle for an AGS diamond.

Bottom Line: Diamonds you’re considering must be certified by a reputable 3rd party, preferably GIA.

Ring Style, Setting, Material & Color

Style & Setting

Before we dive too much further into diamonds, it’s important to know what’s going to be around the diamond. Is the diamond going to be a solitaire – a single stone that’s the center of attention – or do you want something more complex?

There are many different styles of engagement rings and over a dozen broad buckets. The simplest ring style is the solitaire diamond, set in place with prongs. This classic look draws all of the viewers attention to the diamond and the small the prongs maximizes how much light enters the diamond.

But there’s also a huge desire and market for more complex rings styles. Halos are popular for some because they give the appearance from a distance that the ring is substantially larger than it actually is. Pavé and channel rings are two slightly different styles where small diamonds wrap around part (or sometimes all) of the band. Three-stone rings are exactly what they sound like: a single stone in the center with two smaller, sometimes non-diamond stones, on each side.

I don’t have the room in this article to go into the detail of each style so learn more with this style guide.

Ring complexity increases costs in several ways: they are more expensive at the time of purchase, they can be costly to resize, they cost more to insure, and complexity increases the odds of damage or losing a diamond.

This comes down to preference, budget, and how you’d like to allocate that budget. Rings and settings can be very affordable if you keep things simple but you can easily spend more money on the rest of the ring than on the centerpiece.

Note that “designer” ring and setting designs come at a premium – one that you may not find worth the price. Be aware that most of the price premium you’re paying for is just a brand, not additional quality. If you’re trying to maximize the beauty of your ring for your budget, then spending money on a label you can’t see may not be high-value for you.

I strongly urge you to go try on a bunch of rings with your fiancée so you know what you both like and dislike.

Materials

Buy a 14K gold ring. 14K gold is more durable and less expensive than 18K gold and looks nearly identical – especially for white gold. Platinum looks the same and costs more so there’s no added value. Karat (not to be confused with Carat) is a measure of the purity or “fineness” of gold. It’s an antiquated system of denoting how pure gold is. Each karat represents 1/24th of the total amount so 14K gold is 14 parts pure gold and 10 parts other metals that make the jewelry more durable – mostly silver, copper, nickel, and zinc.

For those who might be interested in tungsten or platinum wedding bands, there’s a popular rumor that these bands cannot be cut off if your finger becomes injured and begins to swell. This rumor is part truth and part myth. Tungsten carbide is very difficult to cut, but it can technically be cut. More likely it will be cracked by applying increasing pressure from a highly leveraged clamp like a vise grip.

Titanium, while difficult to cut, can be cut with large bolt cutters. But even though these materials can be cut or broken off your finger, I would personally dissuade anyone from wearing one – especially if they have an active lifestyle. There’s always the risk that you can’t get to a vise grip, saw, or cutters quickly enough. Also, these materials are much more difficult to resize if necessary.

Bottom Line: Buy a 14K gold ring. After that, find out what style you want by going to a store and trying on a bunch of rings. If you don’t know what style your fiancée wants, a solitaire set with 4 prongs is a classic way to let the diamond simply speak for itself. Solitaire rings with prongs are also the least expensive style so you can swap them out and resize them at little or no cost once you’ve given your fiancée the ring.

Trying on Rings

I want to pause for a moment to make one final case for you to take your love and go try on a bunch of rings at your local jeweler. There so many decisions to make about both the ring and the diamond that you need help from the person who’s actually going to be wearing it. And understanding your future fiancée’s preferences will let you focus on the decisions that are less subjective, reducing your “Diamond Decision Fatigue.”

So pretty please, with sugar on top, take your future fiancée to a high-end jeweler and try on rings. I know that you’re thinking that it’s going to ruin the surprise. First, the fact that you want to get married is probably not really a surprise. Second, if you care about surprises, then you’re still going to surprise her with the ring and the moment.

I surprised my fiancée by asking her to marry me while we were at Burning Man. Then we went to a high-end jewelry store to learn more. We had a blast, were treated very well, asked a lot of questions, learned a lot education, and were even given free champagne after they found out that we were already engaged.

We got to see and try on a ton of different ring styles and materials and we got to talk about them openly. We got to hold a bunch of different diamonds, look at them under different lighting conditions, and with different magnifications.

We even got to size my fiancée’s finger with the right tools. Had we not done this, I would have had to guess by using another ring of hers. The size would have been wrong because, like most people, her left ring finger and her right ring finger aren’t the same size. If you get the wrong size, then your fiancée has to be without her ring for a few days – the last thing she wants right after you get engaged. Or worse yet, she could lose the ring because it’s too loose.

Finally, one last point: You don’t know what your future fiancée wants. Her mom doesn’t know. Her sisters don’t know. Because unless she’s gone through this process before, she doesn’t know what she wants yet. When we walked into the store, my fiancée wanted a cushion cut. When we were looking at rings in the show room she fell in love with the marquis cut (because that’s what princesses wear, duh). Then, as we learned more about each shape, we both knew – once and for all – that she wanted a brilliant round cut.

Cut

When people talk about cut, they’re usually mixing two separate concepts: cut quality and diamond shape. But the “4Cs and 1S” don’t make for a very good marketing campaign. Cut quality is all about how well the diamond is cut. We’ll discuss shape below.

Diamond cutting is a mix of art and science, both in terms of the decisions of how to cut a rough diamond but also in the actual execution of the cutting, which is aided more and more by computers, robotics, and laser cutters.

Rough diamonds are carefully analyzed to maximize value and minimize waste. This means that a diamond cutter might decide to cut a diamond in an optically less-ideal way in order to preserve more of the mass of the diamond. Even though the finished diamond will be less pretty, it will be larger, which they know will be appealing to consumers who are overly concerned with carat and size and don’t understand the importance of cut quality.

Cut and polish make diamonds pretty. Since one of the core reasons we’re buying a diamond is because they’re pretty, you should buy a very well cut diamond. And, unfortunately, poorly cut diamonds are still expensive. So given a fixed budget, it’s absolutely worth getting a slightly smaller diamond to show off all that fire and flare.

Cut is graded on a scale. The top tier is called “excellent” in the GIA certification system. But other systems use other words like “ideal” for their top tier cut.

The full GIA scale is: Excellent, Very Good, Good, Fair, Poor.

“A beautiful diamond looks the way it does because of three optical effects: white light reflections called brightness, flashes of color called fire, and areas of light and dark called scintillation. Pattern is the relative size, arrangement, and contrast of bright and dark areas that result from a diamond’s internal and external reflections. There must be enough contrast between the bright and dark areas to give the pattern a crisp, sharp look.” – GIA

Branded Cuts

Other diamond cutters and retailers, most notably Hearts on Fire, sell high-end cuts at a premium. These cuts are usually branded and trademarked. Hearts on Fire owns the trademark for “The World’s Most Perfectly Cut Diamond” meaning that no other diamond manufacturer can make that claim.

The vast majority of branded cuts are actually worse than GIA certified excellent cut diamonds because they have unnecessary cuts that stray from the proven standard brilliant cuts. A good rule of thumb is to avoid diamonds with fancy names, or names at all.

Hearts on Fire diamonds are a little bit different though. While they’re absolutely gorgeous – better than most GIA excellent cut diamonds – they are not a good value. So while cut is very important, once you have an excellent cut diamond, you’ve crossed the threshold and don’t need an even better cut. Hearts on Fire diamonds sell for a huge premium – over $6,500 more for zero tangible value in this side-by-side comparison of 1 ct diamonds.

It’s a great read – especially if you’re considering a Hearts on Fire diamond. One final note about Hearts on Fire. HOF doesn’t let a third party certify their diamonds. So even though their diamonds are beautiful, no third party is auditing their internal certification process.

Speaking of HOF, they made this great video that shows the entire process of selecting, cutting, and polishing diamonds. It’s worth a watch to understand the cutting process from start to finish. Any well cut diamond will go through a similar process, not just HOF diamonds:

Bottom Line: Get an “excellent” cut GIA certified diamond to maximize value. Skip branded diamonds unless you want to pay a premium for features and brand that no one can see.

Shape

Shape is exactly what it sound like: the shape of the stone. Again, it’s critical that you actually go put real rings on your fiancée’s real finger to fully understand the pros and cons of the different shapes.

Before my fiancée tried on a few rings, she wanted a cushion cut. Then she fell in love with the marquis cut. But once we learned more, we knew that the right cut for us was the brilliant round. Specifically, there’s a black “bow-tie” effect that occurs in nearly all marquis stones – even well cut stones. They’re also much more likely to catch on things which could potentially damage them or knock them loose.

While every shape we saw at the jeweler was pretty, as we learned more about diamonds it became obvious that the round brilliant shape showed off the a diamond’s natural qualities best. The 58 facets of a round brilliant cut diamond maximize light reflection. However, if you and your fiancée feel pulled towards a particular shape, get it!

Bottom Line: Go physically try on a bunch of different shape stones so you get a sense of what you and your fiancée really like. Put your favorites on side by side so you can compare them. Pick what calls to you. When in doubt, go with the round or princess (square) brilliant cut as they show off a diamond’s inherent qualities best.

Clarity

Natural diamonds are formed under tremendous pressure and heat about 100 miles below the surface of the earth. During this process, impurities and misalignment of atoms can disrupt the crystal lattice in various ways. These imperfections are called inclusions and every diamond has them – even if they’re not visible to the naked eye.

When trying to maximizing value, we want diamonds that don’t have inclusions that are visible to the naked eye – a threshold that’s called “eye-clean.”

We definitely want an eye-clean diamond. But we don’t want to pay the extra money for a diamond that doesn’t have inclusions under 10x or 20x magnification. Money we save buying a diamond that’s eye-clean, but not substantially more perfect, can be saved or put towards a larger diamond.

The GIA clarity scale is a bit convoluted and each grade is usually referred to by its acronym. Each diamond is viewed by a professional grader under 10x magnification and then bucketed into one of these grades based on the type, size, location, and number of inclusions. Here are the grades from best to worst:

    • FL – Flawless
    • IF – Internally Flawless
    • VVS1 – Very Very Slightly Included 1
    • VVS2 – Very Very Slightly Included 2
    • VS1 – Very Slightly Included 1
    • VS2 – Very Slightly Included 2
    • SI1 – Slightly Included 1
    • SI2 – Slightly Included 2
    • I1 – Included 1
    • I2 – Included 2
    • I3 – Included 3

Clarity is what makes diamonds so hard to compare – cut, color, and carat are much more straightforward. Inclusions look different, come in all shapes and sizes, and can be located in important or unimportant places depending on how the diamond will be set. While this makes grading and selecting diamonds more difficult, it provides smart buyers with an opportunity to get a diamond with the lowest clarity rating that’s still eye-clean.

Buying something above VS1 is a waste of money and it’s possible to find a great I1 diamond. I recommend looking for diamonds that are in the middle, VS2 to SI2. And no matter what diamond you pick, make sure you know where the inclusions are and that they’re not directly under a large facet where they’ll be most visible.

Bottom Line: Don’t buy a diamond with a clarity rating higher than you can appreciate. Maximize value by purchasing an eye-clean diamond. Forget about anything with a higher clarity grade than VS1 and the right I1 could be a winner for you. Once you narrow down the scope of the other variables, clarity is one of the big areas where you’ll spend extra effort finding the right diamond.

Color

Color is straightforward. There are two main variables to be aware of when it comes to color: the color grade and fluorescence. Both of these properties are listed on GIA certificates. Color grade is a alphabetical scale starting at D (colorless) and ending at Z. Obviously starting at D is confusing, which is why it’s the perfect system for diamonds (actually GIA claims that they start at D to differentiate themselves from other grading systems that use “AA” and “A” to grade color).

Colorless diamonds are much more rare than diamonds with a color. So naturally they’re more expensive. But unless you’re comparing a bunch of diamonds side by side in ideal lighting conditions, it’s basically impossible to tell the difference between similar grades.

This means that you can waste a ton of money buying a diamond that’s higher on the scale than we can see. Depending on the setting material and diamond shape, diamonds in the I to M range are good enough to appear colorless when worn.

Fluorescence occurs when light absorbs into a substance and is then re-emitted, usually as a different wavelength of light. For example, UV light (which the human eye can’t see but is in natural sunlight) can be absorbed into diamonds and re-emitted, giving the appearance that the diamond has a color – often blue. A faint fluorescence can actually make a slightly yellow diamond look less yellow in natural light, but it’s not wise to heavily rely on this effect since you can’t always control how much light in the UV spectrum is hitting your diamond. A faint or mild fluorescence is okay, but avoid diamonds with more since they can look cloudy, tinted, or oily in natural light.

Bottom Line: Color is a dimension you should be willing to sacrifice on, to a point. Color is easiest to see when you have multiple diamonds of different colors side by side – something that doesn’t happen often once a diamond is in a setting and being worn. In the case of multiple diamonds in a piece, it’s important that the colors be similar.

Carat

If you’re following my advice of setting a budget first, this is one of the simplest factors to consider.

You might think that you just want to buy the largest carat diamond that’s within your budget, but that’s not quite right.

First off, it’s important to know that carat is a measure of mass not size or volume. 1 Carat = 200 mg or one 5th of a gram. Once again, we don’t really care about what’s being certified, we care about the final look of the diamond. And you don’t see mass, you see size. So while the size of a diamond is highly correlated with it’s mass, there are other important factors to consider.

The second reason we care more about the size of the diamond rather than the mass is that you can – depending on the cut quality – have a diamond that’s large in mass but small in the visible area.

Do not fall for the common temptation to sacrifice cut for carats. Cut quality and geometry are what make diamonds beautiful. Getting a slightly larger diamond will not make up for ugliness.

Finally, there is such a thing as too big. While I don’t think this will be a common scenario unless your fiancée has extremely small hands or your budget is very large, it is possible to buy a diamond ring that’s too large. Very large stones sit further away from the wearer’s finger meaning that they’re more likely to hit things or catch on fabrics. And really large ring can look cartoonish and fake.

Bottom Line: Get everything else right – especially cut and clarity – and then get the largest carat diamond that’s in your budget.

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Why You Should Buy Your Diamond Engagement Ring Online

As I mention in The Strategist’s Guide to Buying a Diamond Engagement Ring, if you’re trying to maximize value for your budget, you should strongly consider buying your diamond from an online retailer. I make the case for this tactic in this article. Also, be sure to read How to Evaluate a Diamond Engagement Ring.

Brick and Mortar Jewelers

Let’s start with a quick look at the brick and mortar retailers.

Buying diamonds at a brick and mortar jeweler is like buying bottled water at the airport – it’s never a good deal. You will – objectively – overpay for any diamond you buy from your local jeweler.

When you buy a diamond from a brick and mortar store, you are paying not only for their huge markup, but for the store’s sophisticated lighting systems, their rent, their security, the cost of holding inventory, insurance for all of the diamonds and jewelry, the salaries of managers and salespeople, and the profits that are returned to the owners and shareholders.

While this cost structure exists for basically every jeweler, there are high-end jewelers and low-end jewelers. The low end guys – any chain you’d find in a mall except Tiffany & Co – have the worst incentives. Generally, they buy the worst diamonds and try to fool you into buying them at an insane markup. I don’t even recommend visiting low-end stores because you won’t even get a good education from their sales reps.

So I strongly recommend going to the highest end store in your area to take a look around. While high-end retailers also have enormous markups, at least they buy decent diamonds, will treat you well, and help educate you. You also won’t find as much of the sleazy sales techniques at higher end jewelers since they’re mostly dealing with a less price-sensitive customer who wants gorgeous jewelry and will basically sell themselves on the jewelry. They literally serve a different market, not just a different price point.

If your area doesn’t have any high-end jewelers, go to the nearest Tiffany & Co. where you’ll get a pleasant and consistent experience. But if you’re looking for value, do not buy from them! Tiffany diamond engagement rings are 2 to 3 times more expensive than buying online and Tiffany doesn’t use a third party to certify their diamonds.

Why Buying Online is Better

Online retailers simply don’t have most of the costs that brick and mortar jewelers do. Their business model allows for them to pass most of those savings on to you while still being able to run a healthy and self-sustaining business.

Online retailers list diamonds that other manufactures or wholesalers have rather than buying and holding their own diamonds. A good online retailer holds no inventory and may never even touch a diamond they help sell. Their job is to be a trusted marketplace like Amazon or EBay.

Online retailers don’t have to rent expensive commercial real estate in malls and shopping centers, or hire fleets of educated sales people to convince you why their diamonds are somehow different from the diamonds across the street. Online retailers also don’t have to pay the expensive advertising rates for billboard, newspaper, magazine, direct mail, and television ads.

If buying a diamond online sounds risky, you need to do more research. The two most reputable online retailers – James Allen and Blue Nile – have better return, resizing, and upgrade policies than most brick and mortar retailers. And aside from the huge price differentials, online retailers also have much better selection.

Until the diamond cartel is broken up, you’re going to overpay for your diamond. But you don’t have to overpay twice.

After I bought my diamond and ring online, I stumbled upon this regretful article from a guy who almost bought a ring online and then, in his words, “chickened out.” If you’re on the fence about buying online, I recommend reading his story.

Knowing I could simply return the ring if I didn’t like it made my final decision much easier. And if I ever need to buy a diamond again, I won’t even consider a brick and mortar retailer.

Final Considerations for Buying Online

There came a point when I was confident that the diamond I was about to buy online was going to be fantastic. But I still had questions for James Allen – the online retailer I selected.

Q: Could I save some time, hassle, and money by buying the ring online too and have James Allen do the setting? Would they do a nice job?

A: Yes. At this point in the process I could feel myself becoming exhausted from the process of doing so much research and making so many decisions. So I took a break for a bit and then dug back in for one last round of research. People love their rings set by James Allen and I love how well mine was done too. I looked at the diamond ring I bought under 60x magnification and I was much more impressed by the quality and symmetry of the setting than I had expected to be.

Q: Was the shipping secure? Did I need to be there to sign for the ring?

A: Yes, shipping is secure and insured. Someone must sign for the ring and a note cannot substitute for a signature.

Q: Was the box discrete?

A: Yes, very. It doesn’t say James Allen or anything about rings anywhere.

The presentation of the ring (and associated paperwork) was classy and high quality. I’m very pleased with everything about the experience.

James Allen also has a 30-day, no-questions-asked return policy and a 60-day resizing policy. They also perform free inspections and cleanings, every 6 months – all you have to do is pay for insured shipping ($30) and they ship the ring back to you for free.

My biggest complaint about James Allen had to do with how you select the ring size. I knew that I needed a 4.75 size ring but the web interface only had options in half size increments. It wasn’t clear that they could make the ring a 4.75 and it wasn’t obvious where to even make this request. (As of late 2017 the answer is put notes like this in the “Special Instructions” box during the checkout process.)

The silver lining of this minor annoyance was that I had an opportunity to test out some of their customer support. I got a clear answer immediately and the person helping me didn’t try to nudge me at all to make a purchase. I tested their customer service a second time to better understand the process of getting a ring cleaned.

Finally, it’s worth mentioning here that I did research the other reputable online diamond retailer, Blue Nile. From my experience, their loose diamonds are very similar and you can find high-value diamonds on either site. I didn’t, however, like Blue Nile’s packaging and presentation and I was able to get a much better look at diamonds on the James Allen site. James Allen had 20x magnification for every diamond I looked at while some Blue Nile diamonds didn’t have images at all. Blue Nile is the only other online retailer aside from James Allen that the pros like, but it just wasn’t the right choice for me.

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