Lego as investment thoughts

Question

Ok so over the last couple years I see people buying Lego sets as "investment" where they buy it and store it away somewhere expecting the value to increase over time but I have a few thoughts on this.

First I grew up in the 80s during the baseball card explosion where it was a small hobby among fans at the start of the decade and by 1989 every mom and pop were at conventions selling the same things. And hundreds of companies were selling millions of products and it went from mostly just baseball to all sports, Desert Storm cards, actors and musicians and even Bugs Bunny and Mickey Mouse.... until the market was saturated and crashed. Almost nothing from the 80a and 90s are worth anything.

Then it moved to Beanie Babbies. Same thing but one company was making them all and promising limited additions. Which we found out was limited only by how many they could sell. Again I can go to almost any garage sale or Goodwill and get every one of them for a quarter apiece.

So this brings me back to collecting Lego sets as "investment." I'm dubious about the long term value of holding onto sets to flip for value for more than maybe a couple year. Sure the older stuff, and more specifically the older stuff still sealed in boxes might have some value because few people were keeping them closed up as they are kids toys. But now there are hundred or thousands of people who are only buying to keep the sets sealed up in hopes of future profits. In five or ten years will we find that there are almost as many sets still sealed up as were opened and built? Will the market be slowly flooded with these unopened and unloved sets? Will the "investment" expectations be washed away in the tears of a reality much like sports cards in the 80s and Beanie Babies in the 2000s?

I'd like to know what others think? Maybe we should just open all the sets and enjoy them for what they are. Model making kits.

in legoby OneSadIndividual

37%

AtomicGearworks

Buying any physical toy or collectible with the intention as an "investment" is destined to fail 99.9% of the time. Partly because the way people do it isn't what makes the item valuable, and partly because too many people are having the same idea.

The reason why some old toys and trading cards are worth so much is because nobody kept them. There's only 3 on the market. And as far as "mint" being more valuable, that only works if only 1 is mint, and the others aren't.

When 10x the number of people are keeping something pristine as an investment, it's only worth 1/20 as much. There's too many of them, and there's nothing to make a mint one worth more when they're all that way.

S1MP50N_92

Customiser

Copy pasting my thoughts for someone who asked about this a few days ago.

Recent sets are never going to be worth the money older sets became worth. There are likely hundreds of people collecting the same recent sets right now to sell later. But all those people will try selling around the same time (once they get sick of storing the sets) and flood the market and will be lucky if they make back the money they spent on the sets.

Older sets sell for lots of money because hardly anyone was even considering investing in Lego even 5 years ago. It's going to be a similar situation as what happened with comics in the 90s.

Old comics that no one thought to hold onto or keep in good condition sold for lots because no one thought to hold onto them or keep them in good condition. Sudden people realize the ones that were held onto and especially are in good condition are worth a lot. But people just assumed that if they bought recent comics those will also sell for a lot in a few years.

The problem is now there is a collectors market on the item. So collectors are already buying everything they want to collect and probably an extra or two. And now investors are also buying to sell later. So now production gets increased too since now more people are buying. So there is more product produced overall and the collectors already have what they wanted to collect.

That nearly killed the comic book industry because investors stopped buying when they realized their investment was profitless and suddenly the comic book companies were over producing. The same thing is going to happen with Lego in the next few years likely.

Lego has already announced opening a new factory to keep up with the higher demand for sets. But how much of that higher demand is actual children (the target demographic) and collectors (the secondary target customer) and how much is investors? And what will happen when investors realize they won't be making much money off recent sets and stop buying?

Also for Lego it's even more volatile to collect to invest because Lego can re-release something that was valuable at any moment and diminish the value greatly. Older X-wings or Tie Fighters or Millennium Falcons are not worth that much because Lego is always coming out with a new design. Or look at the recent Captain Rex fiasco. He got re-released in a $15 set and investors were all upset because they bought the previous $600+ set he had been exclusive too in the hopes of reselling just him for a profit. That could happen with anything.

Lego has also been sending out surveys to gauge interest in a premium version of The Insider Program, and one of the benefits they mentioned that could be part of that is access to limited runs of re-releases of old retired sets. So if that ever goes live investors are screwed since any set could potentially get re-released as part of that.

Long story short, it is and always has been foolish investing in a child's play thing especially after there's already a collectors market established on that thing.

OneSadIndividual

Didn’t realize someone had recently asked this question. It only occurred to me when watching a YouTube video where they were at the Lego Store buying stuff and mentioned saving one or two to sell later. I didn’t think about the aspect of investing in them though I do keep the boxes, flattened, in a bin because much of the cover artwork is almost as much fun at the toys themselves. I have the Disney “Up” set and I think that cover would make a cool poster. And it is always the “investors” that ruin everything. Hopefully Lego survives after building this expanded factory and the investor aspect drops off. Lego has a rough time figuring out the trends. Too quick on video games and videos but have them mostly figured out now even if some are a flop. Licensing or not licensing other properties and building too many sets or not enough based on them. Looking at Scooby, Ninja Turtles and Simpsons…

S1MP50N_92

Customiser

The post from the other day my comment was originally from got taken down by mods, likely because things were getting too heated in the comments. But it was a lot more of a spicy post than your posts, but I won't got into the details since that post was deemed too spicy.

Tahuwu

This question gets asked weekly.

insane_steve_ballmer

I’m not sure that collectors are having a big impact on Lego demand, more likely it’s the booming 18+ line of sets, Lego has become really popular now as an adult hobby. Like, somebody mentioned in a thread that they heard a Target sales rep mention that the botanical collection are their best selling sets - better then any playset. It’s like Lego has unlocked a whole new market.

Buying extra copies of sets to keep sealed is something very, very few people are able to afford or would even consider doing.

JohnnyTsunami1999

The s&p does far better and if you’re risk adverse (assuming you are if you’re considering investing in a toy) then bitcoin would do you much better. They also take up zero space in your house and can be sold at anytime rather than waiting for a buyer to give you what you’re willing to accept

dsgnrone

The other factor is interest. As an example, Space became popular because we are in a new era of exploration, and new sets like the more realistic NASA franchises has driven that interest, which then has space fans looking back towards the more original fantasy sets.

I love space and have only bought the more realistic sets, but it spawned an interest in the older sets until I saw the prices.

Popularity at any given time can’t be gauged. If there is a resurgence of Harry Potter in 10 years, builders might want those sets. Other franchises may not do as well.

OneSadIndividual

I still have space sets for the 1980s. The closest one to realistic is a rover car. The rest..? But for some reason I can’t find the instruction books and a handful of parts. I can’t imagine what I did with them because as a kid I kept almost every toy I got because I was given a budget to get them and had to plan very well for what I wanted.

joemktom

I've got quite a collection of boxed Lego, but it mainly consists of GWPs and sets purchased at a reduced price.

A good example, of how it can work, is the set that made me start the collection. The Bickheadz Batman 41585, I purchased on sale from lego.com for £5, now currently has an average selling price of £34 on bricklink.

LegoLinkBot

41585-1: Batman [Photo]

Noeheavyarms

It all depends on how much money you want to make. You’re not going to get rich off LEGO investing unless you’re already rich. It takes a lot of capital to make a lot of money off any type of investing. Even if you had a mint UCS SSD, that’s $1800? That barely pays rent around where I live. If you want to make big money you need the funds to buy dozens of the larger sets, hundreds of the smaller ones. Then you have to sit on them for 4-10 years to maximize the value. You have to safely store them, find buyers, etc.

If you really want to be richer, minimize your non-essential spending, zero your debt, find better employment, and then look up proper investment opportunities.

A lot of people think you need a good paying job or side hustles to get into a better financial situation. While it’s true, I know people who make more money over time and still are in terrible debt because no matter how much money they make, they spend more than they have. Controlling your spending is much easier than trying to make more money. Life’s “microtransactions” drain peoples accounts. Eating out too often, too many subscriptions, etc. You’d be amazed at how much of your money costs come from tiny transactions, not the big purchases.

tkfire

City Fan

The best investing strategies only buy sets that are retiring and only when they are discounted. This lowers the amount of time you need to hold and increases profits because you bought at a discount (still need to account for fees when selling too though).

Like you said it still requires a lot of money and storage to make a lot of money. Also good analytical decision making. But holding for 4-10 years is not the strategy that is being used. It’s more like trying to short a stock so you can use those quick gains to fund more investing.

aguid23

That’s what your 401k, IRAs and the stock market is for. If you don’t trust financial institutions you can always become an art collector I guess. But Lego ain’t it.

tkfire

City Fan

/r/legoinvesting

lego_dad9

You’ll be rich! No hard work just rolling in profits

OneSadIndividual

I don’t buy sets as investment

Glad_Break_618

I have a collection of boxed Harry Potter sets. I buy them when they’re in clearance.

AbacusWizard

Maybe we should just open all the sets and enjoy them for what they are. Model making kits.

By Jove, I think you’ve got it!

RomanceDawnOP

Absolutely, I recommend buying a stock of lego city police and fire stations

OneSadIndividual

I do but I don’t save them in sealed boxes.