When I moved into my first New York apartment, I got renter’s insurance. The premium was $270 per year, including supplemental coverage for one of my most valuable possessions – my Chanel Classic Flap bag.

I purchased the bag in early 2010 with my first paycheck. I had finished three years of law school and landed what I thought was my dream job. The bag cost $2650 at the time.

I’m sure it’s rare, but the original bag I purchased ended up being defective. True to Chanel form, the defective bag was immediately sent to France for repair. Unfortunately, it could not be mended to perfection, so Chanel sent me a replacement bag one month later. My new bag was utterly perfect. It was also $2995 – $345 more than the same bag cost just 30 days earlier.

I didn’t have to pay the difference, but the increase was not lost on me. Like most Chanel aficionados, I knew prices were always on the rise. The same bag I purchased in January of 2010 for $2650 costs $4900 today. That’s an 84.9% increase and a product strategy shift.

To put the price jump into context, a 2010 Mercedes CLS decreased in value by 22% in the same time period – while the Dow Jones rose 18% and the S&P 500 rose 16%. Even the price of New York Taxi Medallions (the certificates to operate a taxi in the city), long heralded as one of the best investments in town, rose only 28.4%. Not too shabby, but not quite Chanel either.

What makes this particular bag so special – and is it worth the hefty price tag?

Also known as the “2.55,” Coco Chanel created the bag in February 1955. Although certain characteristics have varied over the years, the basic shape and style of the bag has remained unchanged. The original 2.55 featured a “Mademoiselle” clasp with the interlocking “CC” clasp appearing in 1980s.

Depending on the year, some bags are lined in burgundy leather representing the color of the uniforms young Gabrielle (Coco’s real name, for those not as fanatic as I am) wore at the convent where she grew up. There is a zippered compartment on the inside where she is said to have stored her love letters and a pocket in the back to store cash. Seemingly common sense features – the leather and chain shoulder straps – were the most forward thinking. Coco felt that a modern woman needed to have her hands free at social functions, something that was unheard of in the luxury market at the time.

What is it like to actually carry a 2.55? Despite the fact that the straps give me tire track marks in the summer, it’s utterly glorious. The bag is also completely indestructible. My particular bag has suffered near daily abuse for over two years – including a tumble into a dirty subway gutter and subsequent mindless cleaning with Lysol wipes. It looks as shiny and new as the day I brought it home.

Is it worth $4900? Investing in a 2.55 is certainly more stable than investing in – say – the Facebook IPO, but in today’s economy, $4900 is nothing to be taken lightly. Only you can answer that question based on your particular situation. Some days the bag makes me feel invincible – savvier than everyone else – “Ha! I only paid $2650 for mine!” Other days it makes me feel completely conspicuous. Are people judging me for carrying such an extravagant item? Will the partners at my firm think they’re paying me too much? Now that I’ve left my job to start my own company, I sometimes wonder: should I sell my bag to pay for rent or our next round of samples? Consignment stores have offered me approximately $3000 for my used bag.

I’ll keep mine for now, enjoy the happiness it gives me and pray that I’m blessed enough to be able to hand the bag down to my daughter and my daughter’s daughter. Assuming the price of the bag continues to climb twice a year at the same rate, when I’m 70 years old and pass it down to my granddaughter (ignoring all sorts of mathematically significant assumptions), the bag will cost approximately $3,000,000,000 — and I’ll be the coolest granny on the block.

Photo Courtesy of Polyvore.