Building Your Wealth Brick by Brick: The Lego Investment Strategy

Are you looking for a unique investment opportunity? Something that can provide both enjoyment and potential financial gain? Look no further than Lego. While it may seem like a children’s toy, Lego sets have become increasingly popular among investors in recent years. In this article, we will explore the pros and cons of investing in Lego and provide a comprehensive guide to help you make an informed decision.

Legos are Worth More Than Gold

According to a recent study published in the Research in International Business and Finance journal, investing in LEGOs can provide a higher return on investment than many other alternatives. The study, conducted by economists at the Higher School of Economics (HSE) in Russia, analyzed primary sales data, online auction transactions, and prices of over 2,000 unopened LEGO sets from 1987 to 2015.

The researchers found that the market prices of retired LEGO sets sold on secondary marketplaces grew by at least 11% annually, which is higher than the average returns for gold, large stocks, bonds, and other types of investments. Co-author of the study and HSE professor, Victoria Dobrynskaya, explains that while people traditionally invest in items like jewelry, antiques, or artworks, collectible toys like LEGOs can also provide a profitable investment opportunity.

Smart investors can potentially make thousands of dollars on the secondary toy market, which is a huge market that is not well-known by traditional investors, says Dobrynskaya. Despite the relatively low prices of most LEGO sets, the secondary market for LEGO is a worthwhile investment option to consider.

What Makes Lego so Valuable?

The high value of LEGOs as an investment opportunity can be attributed to a few different factors. Researchers believe that the rarity of certain LEGO sets and the nostalgia factor play a significant role in driving up their value. Many LEGO sets are released in limited quantities, particularly those based on popular films, books, and historic events. Once these sets are retired, the number of them available on the secondary market is relatively small. Many owners of these sets either don’t realize their value and donate or lose parts, or highly value them and are unwilling to sell.

Furthermore, LEGO has amassed a huge fanbase over the years, with the company having sold toys since the 1960s. Many adult fans of LEGO are nostalgic for older sets and are willing to pay a premium for them, further driving up the value of certain LEGO sets on the secondary market.

The Pros of Investing in Lego

1. Lego sets hold their value: Unlike most toys, Lego sets tend to retain their value over time. In fact, some sets have even increased in value significantly, making them a profitable investment for collectors.
2. Lego is a global brand: Lego is a well-known and respected brand worldwide, with a loyal fanbase. This means that demand for Lego sets is likely to remain high, even during economic downturns.
3. Lego sets are limited edition: Many Lego sets are only produced for a limited time, which can make them highly sought after by collectors. This limited availability can drive up the value of certain sets, making them a smart investment.
4. Lego is a fun investment: Investing in Lego sets can be a fun and enjoyable hobby, providing both entertainment and potential financial gain.

The Cons of Investing in Lego

1. Lego sets can take up space: Unlike stocks or other investments, Lego sets can take up a significant amount of space in your home or storage facility. This can be inconvenient for some investors.
2. Lego sets require upkeep: To maintain the value of your Lego sets, they must be kept in good condition. This may require regular cleaning and maintenance, which can be time-consuming.
3. Lego sets are not a liquid investment: Unlike stocks or other investments, it may take longer to find a buyer for your Lego sets. This means that it may be more difficult to sell your Lego sets quickly, if needed.
4. Lego sets are not a guaranteed investment: While Lego sets have the potential to increase in value, there is no guarantee that they will. Investing in Lego is still a risk, just like any other investment.

The Lego Investment Strategy

If you’re interested in investing in Lego, there are a few strategies you can employ to maximize your potential gains. Here are a few tips:

1. Invest in limited edition sets: As mentioned earlier, limited edition sets are often the most valuable. Investing in these sets can provide a higher potential return on investment.
2. Keep your sets in good condition: To maintain the value of your Lego sets, it’s important to keep them in good condition. This includes regular cleaning and proper storage.
3. Consider investing in rare pieces: In addition to sets, rare Lego pieces can also hold value. Investing in rare pieces can provide a unique investment opportunity.
4. Diversify your investment: As with any investment, it’s important to diversify your Lego investment portfolio. This means investing in a variety of sets and pieces, rather than focusing on just one.

Conclusion

Investing in Lego can be a fun and unique investment opportunity. While there are certainly risks involved, the potential for financial gain and enjoyment make it a worthwhile consideration for many investors. By following the tips and strategies outlined in this article,