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LEGO as Investment

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  • princedravenprincedraven Member Posts: 3,764
    @supersympa, I take it you have some SERIOUS storage area somewhere..
  • LambringoLambringo Member Posts: 104
    @evileddie1313 I had just read this article 5 minutes before I read your post. Looks like there may not be any more eps.

    http://marquee.blogs.cnn.com/2012/01/18/george-lucas-says-hes-ready-to-retire/
  • MinifigsMeMinifigsMe Member Posts: 2,844
    edited January 2012
    Great selection, and I just don't see how this could go wrong. You're putting a collection away for him, you can think of it as spending rather than investing, with the potential later that your son 'cashes' it in.
    One thing to consider though is that unless you have all the sets yourself for him to be able to play with (I'm sure in this case you do) if he's a proper lego fan he's going to find it hard as a 11 year old to want to part with these sets, he'll want to build them...of course he might be wise enough to consider the vast quanitiies of 'modern' lego he could buy with the money.
    Personally, I'd do my best to get 2 of each. One already opened, so he can actually build them, and the sealed ones he can happily sell. In which case he might wait till he's 18 can can sell them and buy a hover-car ;)

    Also, just one winter set? I think they're gorgeous, but it would be heartbreaking if he loved them and the others in the series are worth a bomb and he can't get them. Either keep up with that one (start giving them to him when he's old enough each christmas) or leave them out.
  • ChompersChompers Member Posts: 658
    Nice selection Si. have to say I would go for all 3 Winter sets. I think these will be ever lasting in popularity. Still think the 8110 Unimog has a place aswell but your money your choice.

    Have you had any thoughts on how your going to store them?
  • princedravenprincedraven Member Posts: 3,764
    I have quite a strong feeling that some of our (AFOL's) children will be so sick and tired of Lego by the time they are 11 (hell even younger maybe), that they will be totally Anti-Lego for the rest of their life.
    I doubt I am alone in the fact that my house has Lego everywhere.
    It does concern me that at somepoint my collection may get handed down to my sons who will think 'Meh! Car Boot Sale (or hover-car boot sale) fodder!'.
  • princedravenprincedraven Member Posts: 3,764
    ^^^ + ^^ If he is putting them away for 10 years the chances are either way his son will still be missing 7 more Winter sets :)
  • SupersympaSupersympa Member Posts: 534
    @princedraven, yes my mum got an empty attic (well less empty now...)
    and you are probably also right about our children getting tired of it...LOL
  • evileddie1313evileddie1313 Member Posts: 126
    Great selections Sir...Your son or your wallet won't be disappointed!
  • evileddie1313evileddie1313 Member Posts: 126
    @Lambringo Damn! LOL...You can always hope he 'unretires.'
  • Si_UKNZSi_UKNZ Member Posts: 4,179
    edited January 2012
    I have about 15 copies of various winter sets, and one of each will be turning up every December under the tree, so maybe I dont need that one in there.

    Am actually wondering about putting IF and motorised excavator in there instead of DS. More variety, spreads the risk, also nice to have a technics in there, especially for a kid approaching teenage years.

    Also, I wonder if anyone will remember Harry Potter in 10 years time? Mind you, it is the worlds biggest film franchise ever, so maybe the question is whether anyone will remember star wars?!
  • richoricho Member Posts: 3,830
    Hey Si,

    Glad you went with the Maersk Train and Grand Emporium! :-D

    rich
  • evileddie1313evileddie1313 Member Posts: 126
    @Si_Dorking_Surrey_UK I agree...Technics are good for variety and investment purposes. Check out set 8421, Mobile Crane from 2005.

    http://www.brickpicker.com/bpms/set.cfm?set=2753

    As for Harry vs. Star Wars...I'd put my money on Star Wars. Lego bricks and spaceships just work well together.
  • gmpirategmpirate Member Posts: 1,654
    I started using all my kids Christmas & birthday money to buy sets as investments. Beats the savings accounts my wife opened for them. Plus it's something my kids enjoy and "hopefully" they learn something as I'm trying to impress upon them the value of not spending all their money on pleasures.
  • leemcgleemcg Member Posts: 607
    @princeraven I was in the car with one of my 5 year olds at the weekend and he said: "Daddy what would it be like if I didn't like LEGO? I think you would be very sad." :-)
  • princedravenprincedraven Member Posts: 3,764
    ^ haha.
    Sad but very true!
  • Si_UKNZSi_UKNZ Member Posts: 4,179
    ^^ Hahaha ... I hope you said that it wouldn't matter at all :o)
    I feel sorry for our kids, being forced into having so many great toys to play with, must be so hard ;)
  • andystarandystar Member Posts: 275
    Si, I love the idea. I'm giving serious thought to doing this, but need to think through how to do it for two kids that are 3 years apart in age. Do I give them the same sets, or stagger selections by 3 years..... Do I give them their "hoard" at the same age just on the same date? Lots to consider.
  • princedravenprincedraven Member Posts: 3,764
    Si, in my opinion I would not remove the DS, not for the excavator and tbh probably not for any other set. I would consider that pretty much the jewel in the crown both from an investment point of view and also from a play point of view for your son.
    There will be other motorized sets over the next 10 years and probably another excavator, but I really can't see them doing another DS, or at least not in the same manner.
    And Star Wars has been going strong for what 35 years, can't see another 10 being a problem at all!

    Could be a bitter sweet feeling in 10 years time. He either sells them all for a tidy profit (hopefully) but doesnt get to appreciate the sets as we all here do. Or he opens up a MISB DS and instantly halves the value of his collection. And who makes the decision? Can an 11 year old really understand the impact of cutting that seal?

    @andystar I have 2 boys who are around the same age gap, if I was to put things away (as investments) for them I would only ever do it with identical items, how would you explain it if your first sons Hogwarts castle was worth £30 and your second sons Batcave was worth £3000? There is really no way of knowing for sure what will be valuable in the future and what will not. And imo I would give them to them on their xth birthday, again with 2 kids you have to treat them equally or you are setting yourself up for some serious pain :)
  • drdavewatforddrdavewatford Administrator Posts: 6,754
    DS would probably be the first set I'd put on my list....

    I'd agree with nearly all of your selections, with the possible exception of the Maersk Train - if you're looking to drop one from the list to accomodate something else, that'd be my pick.
  • doriansdaddoriansdad Member Posts: 1,337
    DS will do well but remember it has no rare pieces or figs and will be easily replicated thru bricklink or Lego direct for many years to come. Don't get me wrong it is a nice set and will appreciate but nothing on the scale of the Falcon or early modulars. Sell it within a year after it retires then buy up some more in demand retiring sets is my advice.
  • prevereprevere Member Posts: 2,923
    @prof1515

    I sold a sealed MegaBlok Star Trek Enterprise last year - $215 + overnight FedEx shipping from U.S. to EU that cost another $200 = $415. I tried making one in Lego but failed miserably as the rear base with curved S-shaped sides for the engines is all 1 entire piece.
  • princedravenprincedraven Member Posts: 3,764
    ^^ what rare parts are in the Falcon? I was not aware it had rare parts. Never looked into it though as I have the set.
  • LegoFanTexasLegoFanTexas Member Posts: 8,404
    If you look at rebrickable, Falcon does have a few rare parts, but nothing that can't be replaced with something close if you don't care about 100% accuracy.

    DS is probably completely bricklinkable, but it would be a PITA, would it not? Then again, I guess the bulk of the parts in DS are bricks and plates, not something hard to find.

    Hmm, didn't think about that...
  • sidersddsidersdd Member Posts: 2,432
    edited January 2012
    ^^ There is a mast rigging element only comes in LBG in the Falcon. These parts go for $15-25/each on Bricklink. There are 2 in the Falcon. If you were doing this set on a budget, perhaps you could get a couple of black ones (they are in the recent ships - Black Pearl, QAR, IF). These parts are used in the back on the engines (some SW expert will probably correct me on the correct terminology of the thrust propulsion units in the back or whatever).

    The 10x10 dish with spokes pattern obviously only comes in this set. This part goes for $25-$30 on Bricklink. On a budget, you can get a plain LBG one for a couple of bucks.

    There is a 6x14 dark red plate that only comes in this set and the UCS Obi-Wan ship. Only one needed. Dunno where it's even used. I haven't built this set yet.

    There are 16x of a right-angle 5x5 brick in yellow color which only comes in this set, which is $3-$4/each on Bricklink. But it comes in the SSD set, so you can probably order it off [email protected] for cheaper I'm assuming. Or for those on a budget, get black ones, which come in the Atlantis HQ set.

    There are also 17x of the LBG 1x16 bricks, 14x of the LBG 8x8 plates, and 41x of the LBG round pin connectors. Not unique parts to this set, but uncommon and hard to find in large quantities.
  • AvengerDrAvengerDr Member Posts: 453
    @doriansdad are you talking about the DS playset or the unfinished DS2?
    Cause my 30th birthday is coming up and I'm torn between the DS playset, the Imperial Shuttle and the Super Star Destroyer..
  • Cam_n_StuCam_n_Stu Member Posts: 368
    edited January 2012
    First off, lucky boy! Secondly if he sees them when he is 10 he will, I strongly suspect want to open all of them to play with, but hey 10 year olds rarely appreciate investment value and anyway LEGO is a toy after all...so I'd ensure you have duplicates if you really want the possibility of selling to be there without heartache.

    Personally I'd go for a mixture to spread the risk and potential reward: A couple of modulars, Technic Unimog, Emerald Night, Fallingwater, and then the less common Toy Story and/or HP sets.

    EDIT: A thought occurs to me - if there really is a LEGO investment movement and it is concentrated on the larger sets will we see a disproportionate rise in prices for the mid-range sets that very few people decided to hoard?
  • doriansdaddoriansdad Member Posts: 1,337
    @AvengerDR I was referring to the DS playset. Not sure when your birthday is but you may want to wait for the UCS 10227 B-Wing. No pics released as of yet but it could be extremely nice....if it is then we could be looking at Falcon territory in 5-6 years as this ship is hugely popular with AFOLS. Out of the list you mentioned I would go for the DS playset...both the Shuttle and SSD are lackluster at best.
  • evileddie1313evileddie1313 Member Posts: 126
    @Cam_n_Stu Good point about the larger sets. They are the darlings of the investment 'movement' as you call it. Maybe the mid sized sets will avoid the hoarding, but all Lego sets appreciate well over time and are subject to crazy appreciation, even the mini sets. Check out set 8033, General Grievous' Starfighter from the STAR WARS mini building sets...

    http://www.brickpicker.com/bpms/set.cfm?set=8033-1

    Tripled it's value in 3 years...Not bad. ;-) or set 4488, the mini Millennium Falcon...

    http://www.brickpicker.com/bpms/set.cfm?set=4488-1

    Up approximately 475% since 2003. The biggest increase of the mini sets was set 4487, the mini Jedi Starfighter and Slave I...

    http://www.brickpicker.com/bpms/set.cfm?set=4487-1

    Up approximately 775% since its release in 2003. The mini sets have major appreciation also...




  • Si_UKNZSi_UKNZ Member Posts: 4,179
    EDIT: A thought occurs to me - if there really is a LEGO investment movement and it is concentrated on the larger sets will we see a disproportionate rise in prices for the mid-range sets that very few people decided to hoard?
    Definitely, I think that looking back we'll see there were 'gaps' in our views about what makes a good investment. For example, Prince of Persia is a very unique theme, and I think the whole range will be of interest to collectors in the future, I can especially see Battle of Alamut doubling fairly quickly.
  • AvengerDrAvengerDr Member Posts: 453
    @doriansdad My birthday is at the end of February :)
    Since I've come out of my dark ages fairly recently I've been scouring ebay to try and find all the SW sets that I've missed so far at bargain prices. A bargain's sure to be had, for the sellers at least. Of all the sets I'm interested into (UCS mostly) I've not seen a single one being auctioned (in new or like-new status) for less than the retail value. I am looking for a 10175 and the "buy it now" prices amount for twice the MSRP. Used sets go around for at least a 20% more than MSRP.. Seems you can't go wrong.. Is there anyone who had to sell a "big set" for less than MSRP?

    I think that I'll definetly try this game once I have some more buying power..
  • BrickDancerBrickDancer Member Posts: 3,639
    @AvengerDr stay vigilant because decent deals can be found. A few days ago I picked up a used UCS AT-ST 100% complete for $76 shipped on ebay, which is $4 under MSRP. So they can still be found but you must be diligent to get the worm.
  • canuhandle23canuhandle23 Member Posts: 104
    simply put i get this for 1k us dollars.

    death star...2 tower bridges( since no matter what happens to lego these will always have real value). Its a landmark and its currently like the third biggest set so in 10 yrs it will still be a top 10 in set pieces... then i get a modular set
  • AvengerDrAvengerDr Member Posts: 453
    Just wondering: is reselling collector sets in the hopes of profiting from the increased price something that you have to pay taxes on or not?
  • Si_UKNZSi_UKNZ Member Posts: 4,179
    edited January 2012
    I'm not an expert, but I believe that in the UK you need to pay taxes on it if the scale at which youre doing it exceeds 'personal' and moves to 'shop'. Its a grey area but I believe the taxman looks out for people selling multiple brand new items as this is hardly likely to be from your personal collection (in their eyes).
  • 4brickmoney4brickmoney Member Posts: 27
    I have tried on several occasions to put LEGO aside as an investment then I get in a building mood and build it. Then it slowly gets parted out when I need a piece for a MOC.
  • Pacific493Pacific493 Member Posts: 379
    "Just wondering: is reselling collector sets in the hopes of profiting from the increased price something that you have to pay taxes on or not?"

    In the U.S., the answer to this question is absolutely. In general, any time you buy something and then sell it for more than you paid for it, you owe tax on the profit. Lego is no different than any other asset, so even if you buy one or two sets and sell them at a modest profit, you owe tax on the profit. There is no minimum threshold under which your profits are excluded from taxation. So if you are buying Lego for the express purpose of selling it later for a profit, you should be reporting all of that activity and factoring it into your taxes.

    Speaking from experience, I can tell you that trying to use Lego as an investment vehicle starts out as a great idea that seems pretty simple to carry out...you buy a set, hold on to it for a year or so, sell it for twice as much, and pocket or reinvest all of your gains. However, if you are going to do this in any type of organized way, you are going to have to spend a fair amount of time learning about the applicable tax laws and keeping appropriate records. Also, once you factor taxes and selling fees in, the amount of profit that you can make on the sale of any given set declines fairly dramatically.

    ***DISCLAIMER...I am not a tax attorney...if you have questions about this you should consult with a tax attorney.***
  • LegoFanTexasLegoFanTexas Member Posts: 8,404
    @Pacific493 is correct, you owe taxes on any "profit" made on anything...

    Now, in reality, does the IRS "really" care if you sell 5 sets a year and make a few hundred dollars? No, they have other people to bother.

    However, the laws were recently changed, if you sell more than $20K a year via eBay, eBay will report this as income to the IRS, but then if you're doing that much, you should be paying taxes on it.

    Even "hobby" businesses owe tax, and as my other posts of my purchase volume show, I'll have to pay taxes on the profits from what I'm doing here. But that isn't a huge deal, since I already own a business and am used to keeping records and paying taxes.

    For someone doing this for fun, keep it below the radar and only do a few and really no one cares.

    That is all my opinion of course, anyone doing thousands of dollars worth of sets should really spend an hour talking to a CPA, you might save yourself a monster headache.
  • Pacific493Pacific493 Member Posts: 379
    One thing I would add to LFT's post...I think it would be more accurate to say that the IRS may not catch you if you don't pay taxes on a handful of sets that you sell every year, but I wouldn't say that no one cares. If you get audited by the IRS and they find unreported income, they will make you pay tax and penalties on that income. However, for the average taxpayer, the likelihood of getting audited is relatively low.

  • doriansdaddoriansdad Member Posts: 1,337
    edited January 2012
    In the USA if you intend to collect more than $20k per year thru paypal over more than 10 transactions then you will have to keep records and pay your taxes. If below that amount then you are still legally required to pay taxes but I would not realistically expect anyone to do so. This is why you will find many bricklinkers offering discounts for payment forms other than paypal...take advantage of it!
  • tk79tk79 Member Posts: 329
    ^- Unless they've changed it (it's been almost a year since I looked at it), I think it's $20+k and 200+ transactions. If those two events occur, you are reported.
  • Pacific493Pacific493 Member Posts: 379
    IMHO if you're in the position of having to offer discounts for other payment forms in order to avoid the new reporting rules, you are playing with fire. Sure, there may be a low likelihood of an audit, but think about the consequences if you do get audited...I can't imagine how painful it would be to have to go back and pay taxes and penalties on unreported income in excess of $20,000 for multiple prior tax years.
  • LegoFanTexasLegoFanTexas Member Posts: 8,404
    @Pacific493 - you are correct, they would make you pay it, and yes they "care". What I should have said was, "they don't care enough to put forward major enforcement effort for someone making a few hundred dollars a year as a hobby".

    As for tens of thousands of dollars, if they found $100K in unreported income over the past 3 years, it might not be fines, it might be jail time.
  • canuhandle23canuhandle23 Member Posts: 104
    To people who want to invest to be honest pick any set that cost over 200 us dollars when i came out. Those will always atleast keep the same value but alll have gone up over time.
  • bmwlegobmwlego Member Posts: 819
    First off, great topic. I am saving Duplo and LEGO sets for my one year old to build with down the road. Hopefully he likes LEGO and if so this might be a fair way to start him off on his own collection so he doesn't envy mine too much.
    Secondly, my friend's son was 5 when we first met and he was building more than his Dad. Now this kid is 10 and he barely touches LEGO.
    If I am lucky enough to have a son who likes LEGO as he grows up I see my saving of sets for him as an investment in our relationship, not a financial venture. If he hates LEGO I will either have his LEGO or a relative will.
  • Si_UKNZSi_UKNZ Member Posts: 4,179
    edited January 2012
    Ive been thinking about this a lot lately, and wonder if I might have 2 boxes ...

    - Box 1 will be stuff for investment only, generally duplicates of sets I already have open. I'll simply sell this to get money for my son in 10 years time and use the money for a fantastic holiday or something.

    - Box 2 will be sets which I dont have in my collection, for him. Playable stuff but big, but too expensive to get hold of in retrospect, like IF and DS. The fact that I'll make a concious decision not to keep duplicates of these sets for myself to open will make them very much _his_ sets, which will be an important part of making them special.
  • AvengerDrAvengerDr Member Posts: 453
    What do you guys think about buying the last remaining 10215 (Obi-Wan's UCS)?
  • gmpirategmpirate Member Posts: 1,654
    Been discussed . . .
  • LegoFanTexasLegoFanTexas Member Posts: 8,404
    The last one? Where?
  • tdhbrtdhbr Member Posts: 188
    @Pacific493 is correct, you owe taxes on any "profit" made on anything...

    You could make sure you spend enough during the Sept-Dec. sales to offset your Lego income and end up with an overall loss for the year :)
  • Pacific493Pacific493 Member Posts: 379
    @Pacific493 is correct, you owe taxes on any "profit" made on anything...

    You could make sure you spend enough during the Sept-Dec. sales to offset your Lego income and end up with an overall loss for the year :)
    This is actually not correct. If you buy a set for $100 and then sell it for $200, you owe tax on the $100 regardless of whether you use it to buy another set. The tax laws only allow you to deduct the "cost basis" of an item at the time of sale. It may seem a bit convoluted, but calculating tax this way allows the IRS to tax the profit generated by just about any sale of a tangible item. If it worked the way suggested in the post above, it would incentivize businesses to make huge expenditures at the end of each tax year in order to offset profit for tax purposes...this would effectively deprive the government of a huge chunk of the tax that it receives from businesses.
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