Lego Investing - When Toys Become More Valuable Than Gold
A fun and profitable way to grow your wealth can be through LEGO investing.
Lego investing refers to the practice of buying and holding Lego sets with the expectation that their value will appreciate over time. Similar to other collectible items, some rare and limited-edition Lego sets can fetch high prices on the secondary market.
Investors typically purchase Lego sets with the hope that they will increase in value, either due to their rarity, popularity, or a combination of both.
In some cases, prices for specific sets can increase significantly over a short period, making Lego investing a potentially profitable hobby.
Lego Investing Is Booming. Here’s How It Works | Niche Markets | WSJ
COPYRIGHT_WI: Published on https://washingtonindependent.com/lego-investing/ by Stefano Mclaughlin on 2023-02-21T03:10:21.828Z
What Is LEGO Investing?
LEGO investing can refer to two different things: investing in the LEGO company or investing in LEGO bricks and sets as a collectible.
If you are interested in investing in the LEGO company, you can purchase stocks in the LEGO Group.
The LEGO Group is a publicly traded company, and its stock can be bought and sold on stock exchanges.
As with any investment, buying stock in a company involves taking on risk, as the value of your investment can go up or down depending on the financial performance of the company.
Before investing in any company, it’s important to do your research and consider factors such as the company’s financial health, competitors, and growth prospects.
If you are interested in investing in LEGO bricks and sets as collectibles, it’s important to note that the value of LEGO sets can be highly dependent on factors such as their rarity and popularity.
Some rare and highly sought-after sets can command high prices, while others may have limited value.
Additionally, it’s also essential to be aware of counterfeit LEGO products, which can significantly reduce the value of your investment.
Is LEGO More Profitable Than Gold?
For those who plant to try LEGO investing, that would be an interesting question.
Both LEGO and gold operate in different industries and serve different purposes, and they should not be directly compared in terms of profitability.
Still, the National Research University Higher School of Economics (HSE University) in Moscow reported that it is “better” to invest in toys such as LEGO sets than in art and gold.
The said Russian university based its opinion on a study published in January 2022 in the journal Research in International Business and Finance (RIBAF).
According to Victoria V. Dobrynskaya, HSE University associate professor of Finance, and Julia Kishilova, the two authors of LEGO: The Toy Of Smart Investors, it is indeed so.
In the Abstract of their study, they wrote:
We find that LEGO investments outperform large stocks, bonds, gold, and alternative investments, yielding an average return of at least 11 percent (8 percent in real terms) in the sample period 1987-2015.
- Victoria V. Dobrynskaya and Julia Kishilova in “LEGO: The Toy Of Smart Investors” (2022)
Dobrynskaya and Kishilova added that LEGO investing is good because LEGO has:
- “a positive return skewness”
- “low exposure to standard risk factors”
- “good diversification potential”
LEGO Investing Tips
LEGO investing can be a fun and potentially profitable hobby, but it is important to understand that like any investment, there are risks involved and no guarantee of returns.
Here are a few things to keep in mind if you are considering investing in LEGO collectibles:
1. Do your research.
- Familiarize yourself with the market for LEGO collectibles, including the different types of sets, their rarity and popularity, and their historical sales trends.
- Look for sets that are in high demand, limited edition, or have retired and are no longer being produced.
2. Consider the condition of the set.
- The condition of the LEGO sets you purchase is important because it can greatly affect its value.
- A set that is still in its original packaging, unopened and unused, will generally command a higher price than a set that has been built and played with.
3. Purchase from a trusted source.
- When investing in LEGO collectibles, it is important to purchase from a trusted source.
- This can include authorized LEGO retailers, well-known online marketplaces, or from a private seller with a good reputation.
4. Store the sets properly.
- Proper storage of your LEGO collectibles is important to maintain their value.
- Keep sets in their original packaging, store in a cool, dry place, and avoid exposing them to direct sunlight or moisture.
Here are additional tips regarding LEGO investing, with a piece of advice when investing in the LEGO company itself:
a. Know your market.
- The LEGO market is constantly evolving, with new sets being released and retired every year.
- Familiarize yourself with the most popular sets, the secondary market, and how sets are priced.
b. Buy and hold.
- One of the simplest strategies is to buy LEGO sets and hold onto them, letting them appreciate in value over time.
- Some LEGO sets can appreciate significantly in value, especially if they are hard to find or in high demand.
c. Diversify your portfolio.
- In LEGO investing, just like with any investment, it’s important to diversify your portfolio to minimize risk.
- Consider purchasing a variety of sets from different themes and time periods.
d. Stay informed.
- Keep up to date with the latest LEGO news, including new sets, retired sets, and any changes in the market.
- Joining online forums and following LEGO-focused social media accounts can be a great way to stay informed.
Keep in mind that the value of LEGO collectibles can fluctuate over time and there is no guarantee of returns.
LEGO investing, that is, investing in LEGO sets, should be approached as a hobby and not as a primary investment.
Best LEGO Themes To Invest In
As with any collectible, the value of LEGO sets can fluctuate over time and is dependent on a number of factors, such as rarity, popularity, and condition.
Nevertheless, for those interested in LEGO investing, some Lego themes that have traditionally been popular with collectors and are considered to have investment potential include:
- Star Wars
- LEGO Ideas
- The LEGO Movie (the 2014 film)
- Creator Expert
- LEGO Architecture (e.g., the Empire State Building and the Louvre Museum)
People Also Ask
Is The LEGO Company Losing Money?
No, it’s not.
According to the company website, in 2021, LEGO experienced a 27 percent revenue growth. Its net profit for the said year was 13.3 billion Danish krone (DKK). In 2020, it was DKK 9.9 billion.
Do LEGOs Lose Value If Opened?
Sets that are still in their original packaging and in mint condition will typically fetch a higher price than sets that have been opened and played with.
Are Empty LEGO Boxes Worth Money?
Empty LEGO boxes on their own generally do not have significant monetary value.
While some LEGO collectors might be interested in acquiring a complete set of boxes for a specific LEGO theme, the value of the boxes is typically not significant compared to the value of the actual LEGO sets themselves.
However, there are some exceptions.
For example, a rare or discontinued LEGO box in mint condition could potentially fetch a higher price among collectors. Moreover, if the box is associated with a highly sought-after LEGO set, it could also have some value.
It’s important to note that LEGO investing carries risk and there is no guarantee that the value of sets will increase over time.
The value of a LEGO set can be influenced by a number of factors, including the following:
- supply and demand
- market trends
As with any investment, it’s necessary to do thorough research and consider all potential risks before making a purchase.
So, even if LEGO investing can be a potential avenue for investment, you should also consider the potential risks and do ample research before making any investment decisions.