LEGO as Investment

Si_UKNZ

I'm thinking of putting £1000 worth of sets into a box for my son to open in 10 or so years time, when he will be 11. The main aim is that this is an investment, and we can sell them and the money will be for him, but if they turn out to be things he wants to play with, then I guess he could have that option too.

So Im interested to know what you'd spend £1000 on to go into that sealed box?

Moved to Buying and Selling by YC 1-17-12

y2josh

Personally, I think speculating ten years out can be dangerous, as there's no guarantee LEGO won't reissue this set or that. That said, I'd go with the modulars. They're extremely nice sets and obviously go very nicely together. You probably can't go wrong with many of the Star Wars UCS sets, either... especially models based off the original trilogy.

Si_UKNZ

Hmm OK so hows this for a list (prices from memory but more or less)
- Imperial shuttle £150ish
- Imperial flagship £140ish
- Death Star £270ish (somehow think this one instead of SSD?)
- Toy Shop £130ish
- GE £130ish
- MF £130ish
- EN £70ish

gruetzmacherd

Tough question, but here's my take:

£275 10188 Death Star
£210 10214 Tower Bridge
£133 10211 Grand Emporium
£92 10219 Maersk Train
£82 10231 Shuttle Expedition
£80 10220 Camper
£72 10193 MMV
£50 10222 Post Office
£12 6858 Catwoman Chase

£1006 Total

If you are strict about your budget, you can leave off 6858. :)

I am leaving off some nice sets including the two most recent Technic flagships (Motorized Excavator and Unimog).

Dominic

princedraven

If its an investment for financial reasons for your son I wouldn't buy Lego, there are better places for your money.
If it is to buy for your son to have fun with, I still wouldn't buy Lego, in 10 years time there will be brand new lines which he is more likely to be interested in, and there is just as much chance he will not be interested in Lego at all.
If you are buying them for you (possibly the real reason - go for it :). )
Just my opinion.

Si_UKNZ

given that savings rates are unlikely to get above 3% for at least the next 5 years, lego seems a better bet to me.

pcirone

Me too, buy the lego.

richo

@ princedraven,

I would be interested to know what better places you are referring to (just out of interest). I follow the financial markets very closely, and let me tell you there are no high return safe bets, especially at the moment, and that includes property. Yes there are safe low income/interest returns, such as bonds, guilts, or at a basic level savings accounts, but guaranteed returns are as low as they have ever been, and you will do well as a taxpayer (especially higher rate tax payer), to get any sort of return that beats the current rate of RPI or CPI.

Not saying I necessarily advocate or would purchase Lego as a long term investment myself, but just saying that the current investment market is rather depressed, which is why many of the professionals such as Fund Managers etc have a lot of money on the sidelines.

The risk with Lego would probably be the fact it is phsyical, i.e. storage, deterioration of box etc.

ps: If I had a lot of spare money to invest, I would off-set it against my mortgage. That would be my advice by the way if you have this option with your mortgage and you are paying any sort of rate in excess of 3%. Definitely the most efficient way to use your money at the moment (i.e. pay off debt).

princedraven

I am a lot happier with my sons cash going into his Child Trust Fund.
Don't get me wrong, get on a UCS Falcon and you could make some money, but having had a fortunes worth of comic books that are now worth a fraction of what they were you have to be willing to end up with 'just plastic bricks'. Who's to say what might happen in 10 years, god forbid but what would happen if someone 'did it better' and Lego died a death. I would be much happier with my cash in a savings account.
Again each to their own.

tk79

Why not do both (new sets for your son and extra money)? You could keep rolling the sets over every few years.

If Lego stays popular, maybe you can sell for 50% markup every 3.3 years, after 10 years you'd end up with $2375 in cash and another $1000 for new sets (keep in mind if inflation is around 5% per year, that $1000 would actually only equal $600 of current purchasing power).

richo

@ princedraven,

in all fairness I know what you mean. I have a child trust fund for my daughter. I opted for the cash version at the time as I was concerned at the medium term view of equities, which sort of has been vindicated, but hey this is only 5 years in, so I could be wrong. On the other hand, I have a couple of high risk unit trusts, so if they do well she can have some of that money. If they do poorly I'll take the hit myself!

Still think paying off debt at the moment is the best bet for spare money, but that's the end of my financial lesson for the day. lol

back to discussing Lego...

richo

dk1007

Buy lego. I used to buy stock, but gave up. It is a bad game. Lego at least you won't lose your cost. Unless something really bad happen to lego, lego will be here forever. Bad means lego gets aquired by Disney or something where they don't ever retire any toy. The only other game that is good long term investment is buy some houses, but house cost way more than a $1000 pound.

Duchessa

I'd go for Lego as an investment. If it drops unexpectedly in value, your son will still have some great stuff to play with :)

I agree with several others about these sets:
10188 Death Star
10210 Imperial Flagship (if you can get it)
10211 Grand Emporium
10193 MMV

....and some others. Perhaps other modulars or SW UCS-sets.

Chompers

Si, I wouldn't bother waiting 10 years. Depending on what you buy there have been some very good returns on recent sales items. I have decided to do something similar to you, for my kids. I buy and sell sets and any profit goes into their savings acc. The set up capital is then used to buy more sets for resale.

10 years is a ling time and as others have said anything can happen. Keep an open view and sell out should prices seem strong at any time.

For what it's worth I would look at these:

8110 Unimog
8421 Mobile Crane (Old set but one of the best and showing no signs of prices weakening)
10220 Camper
All 3 Winter sets
10213 Shuttle
10188 DS

princedraven

It is funny how people get blinded by their passion (myself included at times).
Bottom line, if you went to 1000 (hell make that 10,000) financial advisors and asked them how you should invest for your children's future I would bet ZERO would say "ooooh what you want to do is buy Lego!", and they are supposed experts.
I think we are all too close to the subject matter and it sways our judgement, we see Cafe Corner and UCS Falcon and get a mindset that most sets will increase in value substantially.
I just tell my wife that so that I get away with buying more Lego for me ;)

The_Brick_Builder

If you have the courage too (which I don't have) to invest in $1000 worth of LEGO, here is what you should buy

10188 Death Star
10211 Grand Emporium
10197 Fire Brigade
x2 10194 Emerald Night (Already seeing 50% increase)
10193 MMV

doriansdad

If you are looking just to hold for 10 years and sell then buy a sealed UCS Falcon. You are looking at 10% annual returns on this set.....if TLG does not renew the Star Wars license then the sky is the limit.

If you don't mind being more active and sell every few years then load up on Death Stars on sale in the next year and sell a year after retirement....rinse and repeat for the next great sets. You should beat just holding the Falcon but there is more work involved...and of course you could really miss the train if TLG finally ends its licensing agreement with Lucas.

doriansdad

^^ Princedraven I used to work in the investment industry many moons ago and I can tell you the supposed "experts" are anything but. You could count how many fund managers legally beat the major indexes last year on one hand lol. Of course there may be smarter ways to invest the money depending on a persons situation (pay off debt) or connections (investing in a startup etc) but beating returns in an easily accessible Lego market is very hard to do. I'd say go for it if you have no other plans for the $$$$.

Yellowcastle

What's next, LEGO brokers?

LFT: Amazon has the Town Hall at $144...
YC: Let's wait.
LFT: TRU now has it as part of a BOGO but marked up slightly...
YC: Let's still wait.
LFT: Amazon just lowered it to $128.74
YC: Go ahead and start buying but keep the quantities small. Once it reaches $115, dump them all, put half the proceeds into Legion of Doom sets and hold back the other half for the new Brickmaster pollies.

Si_UKNZ

yellowcastle could you change the thread title back pls because im actually interested in what people would spend £1000 on for a 10 yr investment

Yellowcastle

@Si - I understand that but your original query still clearly states all of your delimiters. Additionally, seeing as how investing has become such a popular topic of late, it seems we should probably have a master thread for your question. 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. If you wish, please feel free to drop me a PM and I'd be more than willing to discuss it further with the other staff. Thanks and good luck with your investment!

Si_UKNZ

.

drdavewatford

Bottom line, if you went to 1000 (hell make that 10,000) financial advisors and asked them how you should invest for your children's future I would bet ZERO would say "ooooh what you want to do is buy Lego!", and they are supposed experts.

I hear you, but would also contend that aside from financial advisors who also happen to be AFOLs, none of those 10,000 financial advisors would have the faintest clue about the resale values of LEGO and how they'd changed over time....

Yellowcastle

^ I think I agree. IMO, the whole point for the normal investor is to invest in products or companies he/she believes in. If I had great success with a product and wanted to invest, I would consider investing in that company. I think buying LEGO for the purpose of investment is along the same lines and I'm perfectly ok with that. And like investing in real estate, at the end of the day, you physically still own something should the bottom fall out of the market. I have no idea how much my hundreds of comic books are worth these days but I accept that their value has likely diminished due to the bubble. That being said, I'm sure they still have "some" virtual value and they definitely have "tangible" value to me and my sprouting son.

cbaker1974

This is a cool idea, I have a friend who does something very similar with wine...when his twin sons were born, he bought each of them a mixed lot of 12 wines that age particularly well (Bordeaux, Sauternes, Barolo, etc) from their birth year. He is keeping these "time capsules" secret and will give them to his sons when they turn 21...at that point his sons can choose to either drink them or sell them, as they should appreciate in value, so it either becomes a unique gift, or an investment vehicle.

I would treat this exercise the same way (and it sounds like you are)...as such, I would make my choice based on the impressiveness of the sets as well as their investment potential, so that if the investment market for Lego goes the way of the beanie babies that you'd still have cool things. With that being said, I would pick sets that are unique, made for AFOL, and probably guaranteed not to be cloned/repeated

1) Modulars - FB, GE, Pet Shop, Town Hall
2) Tower Bridge
3) Star Wars Imperial Shuttle or Death Star (pick one)

tk79

What's next, LEGO brokers?

LFT: Amazon has the Town Hall at $144...
YC: Let's wait.
LFT: TRU now has it as part of a BOGO but marked up slightly...
YC: Let's still wait.
LFT: Amazon just lowered it to $128.74
YC: Go ahead and start buying but keep the quantities small. Once it reaches $115, dump them all, put half the proceeds into Legion of Doom sets and hold back the other half for the new Brickmaster pollies.

Haha, I actually think I remember baseball cards having a "stock market" back in their day right before their crash.

I could definitely see some type of LEGO mutual fund...or rather a group of people that pool their money together, pay for some storage, put someone in charge of buying or all participate and then hire someone "cheap" to ebay the sets who would rather be doing auctions than minimum wage retail or fast food labor.

Yellowcastle

Blue Horseshoe loves Mill Village Raid

JP3804

I was just reading the thread on Lego MSRP rising faster then inflation and threw some data together using 1984 and 2010 castle prices. I found a new 6080 for sale on Bricklink.

1984 2010
6080 msrp $52.75 6080 asking price $1,500.00

U.S. average wage $16,135.07 U.S. average wage $41,673.83

7946 msrp $99.99

The U.S. average wage increased about 158.3%

lego msrp increased about 89%

lego asking price increased about 2850%

just fyi

evileddie1313

There have been a lot of quality comments previously posted and I can see that there are two factions forming, the believers and non-believers in Lego 'investment.' We are all AFOLS, no doubt, but some of us doubt that Lego bricks can be used as an investment vehicle. As with any investment, there are risks and investing in Lego sets is no different, but what's wrong with thinking outside the box when it comes to investment?

I have been seriously collecting Lego sets for 5+ years and my collection has doubled in value, and that's being conservative. Investing in Lego bricks might sound childish or silly to some, but there is some serious money out there to be made buying and selling these toys. Bubble or not, Lego bricks have always been expensive and quality toys and their appreciation of NIB/MISB sets is consistently positive. I have lost thousands of dollars on stocks over the years, so why not invest in something I love and believe in? Here is an article I did on Lego 'investing.'

http://www.brickpicker.com/index.php/blog/view/making_money_from_legos

Over a 10 year time span, I compared the appreciation of the 30 largest Lego sets to the Dow Jones Industrial Average(also 30 companies). During this time period, the Lego sets out gained the DJIA stocks by a 5 to 1 margin(approximately). The Lego prices were based on the Lego MSRP from 2001 and compared to current average 'sold' prices on EBAY from the past year for NIB/MISB sets. Say what you want, this is some serious appreciation.

As for the OP's question, I'm a believer in Lego investment and would recommend any of the Town Modular buildings(Pet Shop, Fire Brigade or Grand Emporium) or Star Wars Ultimate Collector's Series sets(Death Star, Imperial Shuttle, Obi-Wan Jedi Fighter). Good luck...

recordman

Little kids that play with Lego today will be the adults that will wax nostalgic in the future and will pay for the privilege of recapturing their childhood.

Simple as that.

prof1515

While the average income of Americans has gone up, that's not reflective of the distribution of that increase. For most Americans, they did not experience anywhere near the rate of increase that the few at the top wage levels did. The United States presently has the widest disparity of wealth between the richest and the poorest that we've seen since the Gilded Age. That's something to take into consideration when looking at averages.

sram

Perhaps a 1,000 quid is a nice amount to put aside in Lego. Hopefully you have other eggs for your child?

Dato

I can sell my stock holdings readily for a small fee, as long as it's not a holiday or weekend. I can't say the same thing about my LEGO holdings.

You are pretty much guaranteed of the amount of money you are receiving when you sell your shares. You are running a pretty high risk of being scammed when you sell your LEGO sets.

Most stocks distribute dividends. LEGO sets don't.

You still need to pick the right LEGO sets to park your money, just like picking the right stocks.

Investing in LEGO is more like investing in real estate, IMHO. I wouldn't buy a house that I dislike. Likewise, I wouldn't buy my LEGO sets solely for the purpose of price appreciation. I have to love those LEGO sets first-- Even when they all become worthless, I would still be able to enjoy putting them together.

If I were you, I'd use my own preference as the primary criterion for picking the sets, and use others' opinions on what sets may appreciate most in 10 years as a distant secondary criterion.

dk1007

Can anyone identify retired lego set that cost more than $100 at time of release and it had been retired for more than 2 years that actually sold for less than original cost NIB on ebay?

pumperx

7754 Home one

pumperx

10215 will be there too..

Odindusk

^

http://brickset.com/detail/?set=10192-1

The first one that came to mind, and I can't think of many more right off the bat.

PS - it cost $100, which isn't "more than $100" but close enough. =)

Thezoofox

JP38041:39AMFlag


I was just reading the thread on Lego MSRP rising faster then inflation and threw some data together using 1984 and 2010 castle prices. I found a new 6080 for sale on Bricklink.

1984 2010
6080 msrp $52.75 6080 asking price $1,500.00

U.S. average wage $16,135.07 U.S. average wage $41,673.83

7946 msrp $99.99

The U.S. average wage increased about 158.3%

lego msrp increased about 89%

lego asking price increased about 2850%

I'd like to think i helped with that! lol

Wish i had a £1000 to spend on LEGO at the moment! Need mine to buy a house :-(

4brickmoney

I say some of the modulars and UCS. The worse case scenario is they would be worthless but LEGO is never worthless because you can always use them to build something. £1000 is probably not your investment in his future but imagine the quality time building in 10 years. The problem with cards,comics, and other toys is once out of there package they become display pieces that never change. Lego can be made into anything.

princedraven

^ Megablox can be made into anything, doesn't mean it has lasting value :)

I think if you are adamant that this is the way to go, buy things for you, enjoy them now, treat them well, if they mature in value sell them, buy more sets you like, enjoy them, treat them well, rinse and repeat. That way you get value from enjoying them now, and any profits you make can go towards future sets which in turn you enjoy and in theory in 10 years time you are richer (and happier from enjoying your Lego) so you can just provide your child with the money which he can do what he wants with (sad to say it, but its probably a lot more likely that he will want a Playstation 12 than a Lego set of a Pet Shop!).

luckyruss

On the original topic, maybe ten years is not long enough, but I'd buy Harry Potter on a long term view. So put aside a few Diagon Alleys, Hogwarts, Hogwart Castle and Train sets.

My thesis is the demographic one - the thing that will make it appealing is that HP has been followed over the last 5yrs+ by lots of people who are kids today but are the future AFOLs. They may not have had the opportunity to own any / all / the big lego sets (or indeed have some but sell them into their dark ages) but in 10-20 years will be earning money and in a position to recapture their youth.

Look at the Star Wars theme as an example (plus Lucas's shrewd tactics of re-releasing prequels / remasters of the old versions about 15-20 years after the original films, appealing again to the same audience who saw the first lot).

prof1515

http://www.amazon.com/Mega-Bloks-Star-Trek-Enterprise/dp/B0000E3BTX

Megabloks gain value as well. I wish I'd bought this one when it was cheaper.

evileddie1313

@luckyruss...With rumors of George Lucas making the final 3 movies of the Star Wars series circulating, maybe it's time to buy more Star Wars sets. LOL

JP3804

@ Thezoofox Credit were cedit is do. Thanks for the info :-)

princedraven

@prof1515 blimey! Don't tell anyone but I have that set..... Got in a 2nd hand lot. Chucked it all to one side as I thought it looked horrible.

prof1515

Picard figure included?

princedraven

Yep, got Jean Luc and his little stand.

Si_UKNZ

Hi all, this is a great discussion, please dont take my previous post the wrong way, these types of conceptual chats on investment very interesting.

Firstly, I should point out that I also do more rapid turnover investment, partly for fun, partly to make money, and partly because I love learning about, talking about and thinking about lego so I might as well. This original idea was just something more special, like a nice gesture, a little nest-egg, and also something whcih could be low-maintainence. Also, I guess, as a way of segregating out some sets like a 'time capsule' - sealing them from the elements and getting them out again one day in 2022, when I live in the Chinese colony of New Zealand.

So with a little adjustment based on suggestions here, I think I'll pop in the box:
- Death Star @£275
- Grand Emporium @£120 (when I bought it)
- Emerald Night @£71
- MMV @£71
- Tower Bridge @£130 (when I bought it)
- Maersk train @ £90
- Diagon Alley @ £100 (price I paid)
- VW camper @ £80
- Winter village Bakery @£40
Total £980

Supersympa

very interesting thread.
I have done almost the same thing over the years for my son (now 5)...first more like a game...but realise that it could be an alternative to "normal" savings ways.
so far I have in the closet for him 10184, 10210, 10188, 10214, 10197, 10185 and 10199...As you can see only big boxes.
I bought over 2 years when I found a good deal. I will buy something like a big set every 3-4 months, and put everything in the same place. I keep an excel sheet with everything on it. so it is not like Si with 1000£, but more like long term investment over the years.
I am not planning 10 years or so, but when he is old enough, to decide what he wants to do with it.

The other alternative that my wife suggested is to open an account with let's say 1000 £ and "trade" so you would see after a while how much you would make...That is called I think active investment

tk79

^^- good choices. Everyone makes a prediction on the final value in 10 years, closest wins the DS?

princedraven

Gotta admit if someone had put that away for me 10 years ago (I know they were not out, just saying), and I woke up tomorrow to that collection of sets I would be over the moon.
Awesome selection.