Legos are amazing toys for kids of all ages. They can be played in so many different ways and offer hours of entertainment. But can you invest in Legos? Are Legos a good investment? And, how do you even go about investing in Legos? How do you determine how much to spend on them and whether they will increase in value over time or not?
When you’re a kid, Legos are the best toy ever. They give you hours of entertainment. But how do adults get in on this fun? Can adults invest in Legos? And, should you?
Can you actually earn a decent rate of return by simply buying and selling Lego sets? And how should you know how to determine how much to spend on them or whether they will increase in value over time, as well as what type of Lego sets to buy?
How to Invest in Legos
A secondary market for Legos has developed, with immaculate sets increasing by 12% each year since 2000. Now that the adults who grew up playing with and loving them have disposable income to invest, investing in Legos have been a great alternative investment.
Lego sets are not just toys anymore. They can be a great investment too! You may be surprised to learn that you can earn a great rate of return on your money by investing in Legos.
Find the Right Lego Set to Invest In
Lego sets that may have a chance to increase in value over time are those series that Lego retires after a year or so with newer, more popular sets. Some of the best Lego sets that can increase in value over time are specific sets like Harry Potter and Star Wars. These series are often retired from production each year to make room for new sets every year. Retired sets are usually fun to build, have a high resell value on the secondary market, and have that unique factor compared to other sets.
For example, when Lego released their Star Wars series in 2012, it was an instant hit with consumers. The product line sold out quickly nationwide not only because of how popular the movies are but how well they were designed. Lego has since made the series a permanent addition to their product line, meaning these are sets that are always in production. Lego tends to retire specific sets and bring in new ones, which are great for increasing value over time.
Product lines like this with great designs and fast-selling trends may be fun to invest your money. These sets have potential in both being a family heirloom as well as increasing in value.
If you want to make a good return on your investment, how much should you spend? If a set costs $90 now and is then retired, its value may increase to $250 in the future. That’s a pretty good return on your investment!
Storing Your Lego Set Investments Is Key
Storing your Lego investment is key to ensuring that they retain their value. Otherwise, your Legos will not maintain the same value and may even depreciate in worth.
You can find several different ways to store your Lego investments, such as storing them in an airtight container, which will preserve the pieces from becoming dirty or broken. If you want another option, you could also purchase protective cases which help keep the pieces from getting lost and protect against humidity and dust.
Also, you can invest in cases that are clear or made of crystal to help protect your investment from dust and humidity. These cases are great if you’re displaying the Lego set after you have put it together.
If you want to earn the highest rate of return on your investment when you resell your Lego sets, you will want to keep them unopened in their original packaging. This way, the pieces are guaranteed to be in mint condition. If your set is opened, the value could be less than if it were not.
If you are saving the Lego sets for your children, then storing these away will ensure that they can maintain their value and continue to grow as an investment asset. If you simply want to keep them on display where everyone can see how awesome they look, placing them behind glass or Plexiglas is a good way to keep them preserved while allowing everyone to see how great your investment sets look.
Whether you are storing them so they can gain value or for the purpose of preserving memories, investing in storage containers is a wise idea.
Consider Investing Over a Long Time Horizon
If you want to earn the highest rate of return on your investment when you resell your Lego sets, you may want to keep your Lego sets for a few years. It often takes a fairly long time for you to see a great return on your investment.
Like with any other form of investment, you’ll need to be patient to see a great rate of return. Wait until the Lego set is no longer available before selling it off. Try not to sell it right away. While you wait, be cautious since LEGO may release an updated version that will render your collection obsolete.
It’s not always easy to know how to invest in something that will generate a good return. For example, how do you invest in Legos? Many factors can influence how much you make when you resell your Legos. One of the most important factors is how long you hold on to your sets before selling them. If you want to make the highest amount of money when you decide to sell them again, it is usually best to hang onto them for at least a few years.
The Millennium Falcon is a great Lego set that often offers a great rate of return on your investment.
LEGO released the Ultimate Collector’s Millennium Falcon (Set #10179) in 2007. It is often considered one of the most valuable LEGO sets and a great one for resale on the secondary market after it was discontinued in May 2010. Lego then released a second Collectors Edition in 2017.
The original selling price for the Millennium Falcon was $500 in 2007. Now, you can often see new and sealed ones selling on the secondary market for $3,500 or more. That equates to an increase in the price of about 14% annually.
Like I mentioned before, the condition of the Lego set plays a big part in its residual value. Is it opened or new in the box, sealed, and in mint condition? Are you selling a complete kit? Are you selling one that you have already put together? These factors impact the price that you can expect to receive on the secondary market when you sell it.
To see a great graph of historical selling prices, be sure to check out the Brick Economy website. https://www.brickeconomy.com/set/10179-1/lego-star-wars-ultimate-collectors-millennium-falcon
Limit How Much You Invest
Like all alternative investments, you should limit the amount of money that you invest in Lego sets. Typically, you should only invest about 10% of your investment portfolio in Legos and other unique alternate investments. You should only invest in Legos after you have maximized your contributions to your 401k retirement plan and Roth IRA. You do not want to bet the farm and your retirement on Legos alone.
Investing in Lego sets is one of many alternative approaches that investors can use. Other approaches are investing in real estate, cryptocurrency, precious metals, farmland, movies, etc. For some other alternate investment ideas, be sure to check out this blog post.
Investing in Lego sets is part of an alternative investment strategy that may have an overall lower risk than other types of investments. It can also provide an inverse correlation to the overall stock market. In some cases, alternate investments like Legos can appreciate when the stock market is in a downturn.
Investing in alternative choices can put you at risk for limiting your retirement accounts or otherwise not saving enough money for other priorities. Therefore, it is important to limit how much you invest in Lego sets and other alternative investments. Investing outside of your retirement accounts can have a lower return than investing inside those accounts and not take advantage of tax benefits from contributions and long-term capital gains and dividends taxed at a lower rate in those plans.
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Have an Exit Plan to Sell Your Lego Sets
It would be best if you had a plan to sell your lego set to earn a high rate of return on your investment. Investing in Lego sets is a great way to make some extra cash. The key is having a plan and not making an impulse buy, which will lead to the sale price and potential return on investment.
The first step is doing research. Investigate several different websites that sell legos, such as eBay, Amazon, Bonanza, and Craigslist. Search for lego sets that are trending right now. Investigate what they sold for in the past and how often they were sold.
Next, find out what the price range is for used legos. Investigate their availability and which areas might have more transactions occurring with them, such as a state or region. For example, you can search Craigslist for lego sets in your area.
Then, determine the best time to sell them. Investigate which time of year will be most profitable for selling legos. Investigate if prices rise or fall during certain times of the year. For example, Christmas might be a popular time to purchase legos, so it would not be a good time to sell them.
In addition, decide what you will be selling your legos for and how much profit you want to make in return for your investment. Investigate the average and highest value of lego sets so that you can determine if it is worth getting out there and selling them or giving them away!
In most of my investments, I look for an annual rate of return of at least 10%. When I see investments, such as Lego sets, selling at least 10% above my entry point, then I consider selling. As the graph above shows, I fully understand and expect that I will have to hold these investments for a year or two or even longer to fully capture my target rate of return. But, I always think of it on an annual basis.
What Are the Best Lego Sets to Buy?
Often, some of the best Lego sets to buy as an investment are the larger ones. That’s why you see castles and the Millennium Falcon appreciating over the years. Some great lego sets to buy include, but are not limited to these below.
- Star Wars Lego Sets
- Harry Potter Lego Sets
- Lord of the Rings Lego Sets
- Lego City Sets
- Creator Sets
- Modular Buildings
- Tower Bridge
- Any Limited Edition Sets
- Unique Mini Figures
- Disney Cinderella’s Castle
Investing in Legos can be a great way of earning a good rate of return on your money. But how do you know how much to spend and what type of Lego sets to buy? It would be best to consider how long you want to hold the investment, how easy it will be to sell, how much you might receive when selling the Lego sets, how old it is, how rare it is, and how many are being sold on eBay. This will help you determine how much to spend.
Ready to invest in Legos? Find the right type of set to buy. Do your homework! The best Lego sets are not necessarily the latest or greatest release. You can get great deals on retired sets that contain rare pieces that will likely increase in value over time.
Investing in Legos can be a great way of earning a good rate of return on your money. But how do you know how much to spend and what type of Lego sets to buy? You need to consider how long you want to hold the investment, how easy it will be to sell, how much you might receive when selling the Lego sets, how old it is, how rare it is, and how many are being sold on eBay.
This will help you determine what types of lego set investments may work best for your situation. Invest only in Lego sets that will appreciate in value over time because if they don’t, then there’s no point in buying them! Ultimately though, make sure not to invest too heavily in Lego sets because the one thing that is inevitable in life is that nothing lasts forever!
What about you? Do you invest in Legos and other alternative investments? Which sets have given you the greatest rate of return on your investment?