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LEGO as Investment

124

Comments

  • As far as the ME3 CE goes... I wouldn't sell it right now at all. The original ME's CE goes for $500+ and ME2's is around $200. Some video games are WELL worth holding onto. You may have to dust off the old SNES to play FFIII or Chrono Trigger... but if you have a good factory-sealed copy of those titles... those are $1300+ each.

    On topic... I don't see LEGO losing its 'investment' potential for some time. As long as new generations continue to be introduced to LEGO as kids, you'll always have some type of population of AFOLs 'coming out of their dark ages' to help sustain the secondary market's existence.
  • I have been collecting and pocketing Lego sets for the last few months. I have found that I try to cater to certain groups of people. First the average collector like many AFOL's are right now. I would say this is something where they want 1 or 2 of the same set just for their own enjoyment. I found that unless its a rare set there is not allot of money flow here. However when you do find a collector with money usually they buy multiple sets. The best one I have luck with and really its not to expensive to start with is the MOC builders and Army builders. Those $12 battle packs I have bought one day and turned around for $25 because of availability. Also many army builders will stock these things like crazy. Something I have started to do is break a set open and take out the mini-figs and put the spare pieces in my parts collection. The mini-figs can go for allot more than the set actually is, again because of availability. I prefer to buy the battle packs at %50 off at a Walmart or Target sale, however that's hit or miss.
  • @cynthilina I agree. Find some 'Battle Packs' on sale for less than $10(US) and resell the 4 mini figures for $3-$4 a piece. Funny thing is, people buy them up like crazy. Maybe they are just lazy. LOL
  • si,

    personally I would take out the architecture sets and the star wars shuttle and get a death star to hold over. my daughter is 16 months and there is one put aside that she will get when she is 7 or 8. I have two that I will sell off around the time and hopefully they will pay for her set. Pretty certain by then these will be quite pricey and will go for more used than they cost new now.

    as for sets to lay down to play, why bother with a police station as there is a new one every 2 years, buy a good 2nd hand 7994 - thats an iconic set that they wont repeat - 4645 sucked...

    btw, id lay down a couple of funhouses rather than the batcave - everyone is going to hoard the new batcave thinking it will be the next 7783, it wont be.


    still find it funny to read the " I sold X of these and made Y but now I cant bring myself to open the one I kept and actually now got essentially for free" - mostly cos im kicking myself i sold all my 7783s and now baulk at the price I have to pay for a 2nd hand one....
  • It seems to me that the biggest threat in the original plan is the unpredictable behavior of a, let's say, 10 year old Lego addict who might not understand the meaning of MISB or why he can't play with all those nice toys in his father's closet (like me when, young, I discovered my father's pristine H0 toy trains...).

    Of course, it could also be the other way round: Ten years down the road, the boy might not be interested in Lego at all. Or the father, for that matter.

    On the selection of sets: Assumedly, an investment in collectibles should be into those items which will be in high demand _and_ in low supply. The obvious sets recommended by everyone will probably not be in low supply.

    On the whole topic of Lego as investment, however, let's keep in mind that we're all strongly biased towards liking Lego, and this forum is a filter bubble.
  • Addendum: Just for the fun of it, I looked up the sale prices of a few more or less random Lego sets from 2002 (left column) and compared with lowest current prices on bricklink (right column), GBP and new and unsealed (unless otherwise mentioned):

    1376 Spiderman Action Studio 24.99 47.53
    1381 Vampire's Crypt 14.99 56.31
    1382 Scary Laboratory 39.99 101.41
    3739 Blacksmith's Shop 163.52 29.99
    5850 Royal Crystal Palace 49.99 53.87 (not new)
    6762 Fort Legoredo $100.00 GBP127.34

    Not a large sample, I know. I was quite surprised to find that according to those prices, all sets seemed to make nice profits.

    Points to ponder: One needs to buy any set intended for resale twice. I'm not sure I could guarantee MISB of 10188 in my cellar as long as I haven't built it, too.

    It would also be interesting to know how long it would take to sell off a Lego collection of, let's say, 20 boxes via bricklink. Does anybody know?
  • The biggest issue imo, and the one that tables like the one above fail to take account of, is the sheer number of people now 'investing' in lego. When people with little to no interest in Lego happen to see the profit that can be made for almost no effort with sets like the MF or modulars they jump on board. When lego buyers who just like lego see the profit that can be made then they think, lets buy a couple of that set, i'll play with one and the other two will pay for the first when I resell.

    There's just too many people keeping too many of these sets for resale imo and whilst even then it only accounts for a tiny chunk of the total Lego sales, the amount of people that are going to be willing to pay more than RRP for old lego sets when they can buy new ones at RRP or less is an even smaller chunk.

    Something has to give, the balance of sets being kept mint for resale and available buyers isn't staying stable and ultimately its supply and demand. Whilst good money will no doubt be made on some of the more iconic sets I think a lot is going to be lost - especially when considering ebay etc charges, the loss that the money invested could have made elsewhere etc etc.
  • @chesirecat An EXCELLENT point!

    Wasn't there a huge flux of 'investors or flippers' in the comic book hobby in the 90's (shortly after the death of superman) that eventually led to most of the books produced in that era being worth very little in the secondary market?

    That's not saying there won't be somebody ready to snatch up your DS for $500 (used) when you (or your child) are finished playing with it down the road. But the smart money goes towards something you wouldn't mind keeping in your collection forever IMO.

    I collect art prints/gig and movie posters as well. These are sold as collectible items each being hand signed and numbered with no future re-prints of the poster.

    If there were limited editions like this with lego that were numbered and not to be re-released this would be a sound investment. But I doubt Lego wants to leave money on the table when it comes to bigger sets so the chance of 'limited' runs is pretty small. Plus, they would be depriving many children (the target audience) from ever playing with the set as the re-sellers/flippers would snatch them all up day one.

    All that said.... I'll still be pitching the investment angle to my wife when it comes time to purchase 10212 & 10221. : )

  • It depends on how you buy. If you spend rrp and expect to make money, it might be harder than buying at 60% off, then selling minifigs/pieces off a nonpopular set (lego 7327 for example).

    This is similar to buying penny stocks, or berkshire-hathway. Will you make good returns on both? Depends. But a penny stock you know that should at least maintain value? Thats not so bad, especially if you sell some and still maintain a stack for sale later.

    I find my biggest issue isn't making money/breaking even, its finding the space to 'hold these in decent condition until I'm ready to sell' space. I've picked up lego 7327, 8078, 7048, 7627 -- in bulk from 'clearance.' Of course, then you have other worries, like 'should I go ahead and break seals, to make sure there is what I think there should be in these boxes' or 'sell new in box, as is'?

    Of course, I could go with someone else's example of 'open them all, fill a swimming pool, and dive amongst my loot' or give them away as 'awesome presents' while some of the kids I know aren't sucked into the 'lego sucks, where's the controller' realm.

    I think I rambled. Apologies, I've been awake since 4, and I'm missing my morning coffee. I should add, my fun comes from finding the bargains, watching how they appreciate in value.. I don't think I've sold anything lego yet. I did dabble in heroscape which led to lego, as lego sets are much more likely to hold value, and not get nerf'd by their parent company.
  • @cheshirecat Great points...Lego collectors with the 'older' mint sets will have a distinct advantage over the newer investor. New investors who buy 4 Modulars at a time now might not have the same success as an investor from 5 years ago. As you stated, the issue is non-fans getting into the Lego investing and skewing the numbers. That being said, where else do you want to invest your money? Real Estate? Stocks? Gold? Matchbox Cars? Barbie Dolls? Coins? Stamps? I wish I knew, but as a guy who has made and lost money with stocks and real estate, at least I'll still have the Lego set itself to open and build one day if the Lego market tanks....LOL
  • I figure when I loose it all I will have enough lego to build a house for myself at least :)
  • I'm not worried about the aftermarket getting flooded just yet. I believe people were hoarding Imperial Flagship and, to a lesser extent, Emerald Night like mad, and those are both already approaching 100% over RRP.
  • There is a lot of talk on these forums about the "sheer number of people" investing in Lego increasing...but is there any evidence to back this up? I've told my friends about my Lego investment and they all look at me like I'm goofy, none of them are ready to rush into it and tell their financial advisor to put them into a Lego investment trust. They all seem interested and fascinated, but not a single one has asked me how they can also get started.

    There's no doubt that within the Lego communities there are more discussions about Lego investment, but I wonder if we aren't confusing the active investment talk with the number of people actually doing it. I was investing in Lego for the past couple of years prior to all of this discussion and am still investing at the same rate...I "hoarded" the same Wal-Mart clearance deals last year as I did this year. The 100 Clone Walker Battle packs that I got didn't flood the aftermarket...in the end there were a limited number of these around.

    I really doubt resellers right now are more than drop in the bucket in terms of worldwide Lego sales. When you see people quitting their jobs, stories in the media, discussions rampant on non-Lego community sites then there is cause for concern, else I still see a fairly healthy aftermarket for the right kind of sets.

    It is hard to argue with the recent examples of Emerald Night and Imperial Flagship...those sets were "openly hoarded" on this very forum with tales of multiple people with 10+ sets and the aftermarket pricing shows that the hoarded supply for resale cannot keep up with demand. These sets were out for a while and were available on Amazon, Target, etc. after Lego EOL them (at least for a few weeks) so there was tons of opportunity for resellers to build a hoard even after the EOL notification...and yet they still are performing.
  • ^ In my opinion there's loads of people who don't sell EN and IP just yet so it will be interesting to see the prices in a year's time.
    Another thing is that seeing how these two perform people might start hoarding even more...
  • I collect art prints/gig and movie posters as well. These are sold as collectible items each being hand signed and numbered with no future re-prints of the poster.

    Are you on expressobeans Deadareus?
  • I'm on as nauticant. I post very little because I'm just after stuff that has eye-appeal to me and will look good on my walls.

    I'm struck by the similarities and differences between the Lego market and the street/gig/cinema art market. It's interesting how in the former the limited edition aspect is known upfront and in the latter only emerges after the event. So the market behaviours are very different at the start but converge as time passes.

    Anyway, back to Lego talk.
  • I'm on as nauticant. I post very little because I'm just after stuff that has eye-appeal to me and will look good on my walls.
    I initially went to EB to find the Phish posters I was missing from shows I've attended but it blew up into something that has gotten completely out of hand. I have a very modest collection though.

    I will say I have been much more picky about what poster/prints I go for more now than when I started a year ago... Mostly thanks to the Lego addiction.

    Back to Lego chat.


  • edited March 2012
    Hello,

    I just posted the same question on the Bricklink forum - but since more oppinions would benefit me more I thought about asking the same things here.

    I am a Lego fan since always, a buyer for a few years now and thought about combining
    my passion with a little business-side, opening a shop on Bricklink.

    This will remain of course more of a hobby enterprise, something I will do in
    my spear time.

    I do have some 15-20 small or medium used sets that I will list.
    I'll also list some used parts, but I don't want to get involved much in the
    parts business yet, as this requires massive amounts of time, work and investment
    in order to be competitive.

    I was also thinking about taking a small credit and investing somewhere around
    5-7K Euro in (new) sets.
    Part of that amount I would invest in a few expensive "adult" sets (like Tower
    Bridge, modulars, etc) that I would keep and sell only when those get End Of
    Life. Another part I will try to invest in sets I think are/will be wanted by
    more people when I can find them at a discount (on Amazon for example).

    Please help me with your opinion on my ideas, if you think I have a good chance
    for my investment to turn profitable, or any suggestions you might have.

    Thanks!

    PS: I don't look at this as a "quick way to get rich" or something cos' I know
    it's not. I would just like to be on the "+" side rather than the other way around... :)
  • @adn2377 - Please note that I've moved your question here. I recommend that you read this discussion in it's entirety first and then ask followup questions if you still have any. Thanks.
  • @ Yellowcastle - Please be aware that I already red this discussion.

    My point was to open my own thread and have people who would like to answer be able to do it there - on my own thread and with my own title. If this would be against your rules please tell me so. If not please help me by moving it back...
  • Surely whats in this thread answers your question though?
  • I have found many interesting and useful things in this thread. Also I felt the need of starting the other one myself, regarding to my specific case.
    Any feed-back is welcomed.
  • I wouldn't take credit to buy EOL sets, unless you have a long 0% interest rate, simply because you will be sitting on those sets for quite a while before you can sell them.

    You are unlikely to get much interest in your store if you only have 15-20 sets parted out, unless you are significantly cheaper than the big boys.
  • The problem is that there is a small contigent of people here who whine and complain if there is more than a thread or two that discusses reselling so this has become a dumping ground for those discussions. The squeeky wheel gets the grease.

  • ^ Thats a bit unreasonable. The policy is simply that we dont want tons of discussions all about the same thing.

    It seems that, distilled, @adn2377 is asking this "What new sets should I spend 5-7K Euro on for investment, split between AFOL (for EoL sale) and KFOL (if bought discounted)?". Much of the answer to that lies in this thread, so it seems entirely reasonable to refer it to this thread.
  • I wouldn't take credit to buy EOL sets, unless you have a long 0% interest rate, simply because you will be sitting on those sets for quite a while before you can sell them.

    You are unlikely to get much interest in your store if you only have 15-20 sets parted out, unless you are significantly cheaper than the big boys.
    That's what I was thinking, and that is why I would only spend a limited amount for this - let's say 1,5K... I already bought a couple of IF's - I think they will sell well in about 6 months or so?

    I am not interested in parting sets - just in selling whole sets for the moment - as I was saying to be a good (and sought) parts seller you must invest much much more money and time...
  • We often hear so much about re-selling Lego for profit - but this is nothing but speculation. We need some numbers to qualify whether it is worth in the investment.

    How much money you invested on Lego? How much you sold it for? After how many years? Is there any other investments you could have made with that money to get a better return?

    Although Lego can be a self funding hobby but when you consider it as a business/investment, the whole matter gets a totally different dimension.

    Some old Lego sets do sell at below RRP when you consider inflation.

    Only a few sets will appreciate heavily in price. However, we should consider the median price in future rather than one or two odd high prices.

  • @ Yellowcastle - Please be aware that I already red this discussion.

    My point was to open my own thread and have people who would like to answer be able to do it there - on my own thread and with my own title. If this would be against your rules please tell me so. If not please help me by moving it back...
    Hi adn2377 and welcome to the Forum. We have to remember that this is a community forum and that the needs of the many will usually outweigh the needs of the few, or the one. In turn, it would make no sense if we had competing threads for every possible buying limit, etc. As such, I've moved your question to the current and applicable discussion.

    Since you indicate that you have already read this thread, then I imagine you already have your answers as to which "AFOL" sets you should target for investment purposes. I'm not sure we've touched on the "KFOL" sets, though, so I imagine many will have new input there. Lastly, there has been significant discussion already on whether or not this is a "profitable" venture but I'm confident that question will continue to promote vigorous discussion.
  • Hi and good to be here.

    Ok, no problem from me if this is the way you like to organize things on the forum...
    Still, in my oppinion, "Lego as investment" means some people that have money and instead of buying stock they buy Lego... - opposing to what my thread was about -> Making this a small business and the perks needed in order to have a chance of success.
    Of course, the are things in common but they are not the same thing at all.

    You are right about the AFOL sets, combining information from here with the things my common sense told me I shoul be able to come up with a decent list.
    You are also right about the KFOL sets - not much talk about that (other than Ninjago beeing strong in the US because of the animated series they have) and input still needed...

    Apart from those - some other information I seek -> Would the euro amount I specified be enough for creating a (very) small business (but on the "+" side)? What would the best sale mix would be in the oppinion of other sellers given the information I provided?
    And this is the tip of the iceberg... :))
  • The problem is that there is a small contigent of people here who whine and complain if there is more than a thread or two that discusses reselling so this has become a dumping ground for those discussions. The squeeky wheel gets the grease.
    There are currently 295 distinct Buying and Selling discussions, with most related to the reselling of LEGO. As for your snide comment that I merged these discussion simply to appease a small group of "whiners and complainers", I think that's just petty and rude. For someone who seems to have such strong feelings on this subject, I find it amusing that this discussion has reached almost 200 comments yet your only input so far has been, "buy the lego."
  • I find it hard to believe you had read the threads here and continue to have these questions. Either that or you just want someone here to tell you its ok to use your credit cards.
  • Just like any business its all a risk. I don't think anyone here will tell you for certain that you will make money reselling or investing Lego. Its all about supply and demand. For example when Lego and Lucas Arts did their 10 year contract that dashed my hopes for star wars having an large gain for at least that long. Allot will also depend on what Lego decides to do regarding its product. If they decide to go in a not so favorable direction then the business yo have will suffer as well. I have looked online at the stores and i think they are ridiculously priced and so will your average Lego builder. Some hard to get items and UCS stuff may be worth the investment but again that's only if Lego does their business right.
  • the needs of the many will usually outweigh the needs of the few, or the one.
    +1 for paraphrasing Spock

  • some other information I seek -> Would the euro amount I specified be enough for creating a (very) small business (but on the "+" side)?
    Yes and no. You could start a very small business with 5 Euro buying a couple of popular minifigs (such as the S6 Roman, by feeling the packet in a shop) and then selling them. You could also start a very small business by buying 5000 Euro of stock and listing them on bricklink, ebay, etc. Any amount spent on buying something to resell is a business.

    What would the best sale mix would be in the oppinion of other sellers given the information I provided?
    And this is the tip of the iceberg... :))
    Who knows? How quick are you likely to turn sales around? Some people go for slow but good probability investments for AFOLs, others go for quick turn around but little profit sales for kids. It is up to you. Everything (concerning future price rises) on this thread is speculation.
  • the needs of the many will usually outweigh the needs of the few, or the one.
    +1 for paraphrasing Spock
    I can't help myself, I just loved that movie. :o)

  • ^ yep, easily the best of all 10 ST movies.
  • It appears to me that what adb2377 asked is actually different from what this thread originally was about. Opening a bricklink store with short- and medium term sale is not the same as buying sets and maybe selling them after ten years. Dealing with something differs from buying it as an investment.

    To add to the topic: I'd think that EOL-the.es should go well.
  • Does anyone else here have the "break even" outlook? I keep telling my wife that if we can buy 4 sets at BOGO %50 off and sell three that it will be like getting a new set free. Or buying a 20-30 pound lot and piecing together some complete sets...

    Is this realistic or am I just rationalizing?
  • ^ I do the same. Often I do buy two, sell one MSIB and some of the minfigs from the other, and the rest of the parts are free.
  • I keep telling my wife that if we can buy 4 sets at BOGO %50 off and sell three that it will be like getting a new set free
    I say this a lot as well. The trouble is, I never get to the selling part. But if you're less lazy than I am, the theory is sound.

    I had never thought to try to support/supplement this hobby but I think it's time. I just hope that the selling of it doesn't impact my enjoyment.

  • I find it easier to sell new boxed items rather than parted out sets or figures. They way I look at it is - if they are sealed, they were never mine anyway. It is harder to let go with opened ones when you have seen and touched the parts!
  • ^ I'd say it does take away. I'm in business, it's what I do, I enjoy reselling Lego but anyone who thinks it doesn't take away from the actually "playing" with Lego is kidding themselves. Honestly, I struggle with how much time is devoted to reselling. I would do better devoting more time to my business, but the Lego roi is intriguing and I do get a buzz from it. Just some thoughts . . .
  • ^ for what it's worth, littletoki didn't say she hopes it doesn't impact her time, but rather, she hopes it doesn't impact her enjoyment of the hobby.

    I think everyone's experience will be different, but I don't find selling detracts from the joy of collecting and building. It could take on a life of its own since bargain hunting can be obsessive and doing it effectively requires constant vigilance, but I suspect many hobbyists do that regardless of whether or not they resell.

    The "buy one copy to own, one to resell" approach is pretty simple and will go a long way to self-fund the hobby.
  • Yes, I should have clarified. I know that selling will take time away from building (although right now, I spend 90% of my time sorting, what's up with that?!).

    But I'm more worried about the hassles and headaches you all experience when dealing with potential scammers, non-payers etc. Just wondering if that's going to be more aggravation than it's worth.
  • @littletoki It may bother you at first, but after a while you just file "non-payer" and move on. Not such an issue with larger sets, but the lower the price point, the more flakes. Scammers are rare and far between.
  • On a completely different tangent, I was on the phone with my portfolio manager today and I mentioned Lego. He didn't even bat an eye and commented that some of the "niche asset class" do see a higher rate of return.

    Lego. Not just a toy. It's a niche asset class.
  • Lego. Not just a toy. It's a niche asset class.
    Of course, it is no different than an investor who buys oil paintings, glass art, old motorcycles, classic cars, etc.

    My Mother has several original Thomas Kinkade oil paintings from early in his career. Those were purchased for pretty reasonable money (a few thousand each if memory serves), they are now worth quite a bit and are on her balance sheet as a listed asset.

    So Lego isn't completely nuts... :)
  • @LegoFanTexas So tell your mom she would be better off now selling them and purchasing Lego. Gotta turn that over at some point and get better present return ;)

    Then again, if she takes a tax hit . . .
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