But Actually ...
If you were paying attention in middle school, you might not have slept through this exchange from Charles Dickens' novel Oliver Twist:
"Good," said the Jew; "there's no moon."
"No," rejoined Sikes.
"It's all arranged about bringing off the swag, is it?" asked the Jew.
If we can look past the disturbing fact that there's a character in the book named "the Jew" (this was the 19th century), this particular Jew is using the term in pretty much the same way that modern douchebags do, defined in old-timey style as "wearing apparel, linen, piece-goods, etc." That's right: People knew what it meant to have swag when they were reading it in 1838.
And Fagin's main man even had the cap and low-slung pants going on.
Although it shares the same root as "swagger" ("svagga," a Scandinavian word meaning "to sway"), "swag" was actually used first, and much earlier. As early as 1303, to be exact, in the time when English was still basically indistinguishable from German. At that time, "swag" meant a bulging bag, which kind of makes those boasts sound a little bit creepy. By the mid-19th century, "swag" had transformed from the bag itself to the stuff in it (which was usually looted or stolen because, let's be real here, this word comes from the Middle Ages and there was nothing else to do back then).