LEGO Sets Are Better Investments than Stocks, Bonds or Even Gold

[Hydrogen]

Here’s a piece of advice for anyone looking to invest wisely for long-term gains: don’t get rid of those old LEGO sets just yet because they might be worth some serious dough.

They’re a wildly popular diversion for both kids and adults, and now it turns out that LEGO sets—discontinued ones at least—may be seriously valuable collectibles to boot. A study by researchers at the Higher School of Economics in Moscow found that prices for retired LEGO sets grew 11 per cent annually between 1987 and 2015 —a rate that’s faster than bonds, stocks, and even gold. The study also concluded that LEGO returns are not exposed to risk factors and weakly dependent on the stock market. However, the sets are not a way to score fast cash; rather, they’re long-term investments that yield returns within two to three years of the sets being discontinued.

The study’s authors, Victoria Dobrynskaya and Julia Kishilova, reported their findings after looking at the prices of 2,322 LEGO new unopened sets from 1987 to 2015 and using information from primary sales as well as online auction transactions. Their research also unearthed a number of fun facts: to start, prices of small and very large sets grow faster than medium-sized sets. This is most likely because smaller sets have unique parts and figurines while larger sets are rarer and appeal more to adults. Also, sets tied to hit movies, holidays, and well-known buildings see the highest growth in value as do limited-edition sets. Top valued sets include the Taj Mahal, Imperial Star Destroyer, and Millennium Falcon.

Why exactly do retired LEGO sets rise in value so quickly? For one, they’re produced in small quantities with special edition sets being the most limited. They’re also not widely available on the secondary market because owners lose parts or don’t want to part with sets they love. And since they’re beloved by both adults and kids – and have been around for decades – the study assumes the more time has passed since a set first debuted, the more nostalgic and desirable it becomes.

The architectural quality of LEGO sets also plays into why discontinued sets are so valuable, says Christian Bailey, a founding principal at ODA Architecture in New York and an avid Lego fan who still owns sets acquired in the 1970s. “LEGO (sets) are like architecture because they’re building blocks that you use to create a 3-D scene whether it’s from a movie or of a building or set in space,” he says. “They’re endlessly imaginative.”

In a release about the study, Dobrynskaya said, “We are used to thinking that people buy such items as jewelry, antiques or artworks as investment. However, there are other options, such as collectible toys. Tens of thousands of deals are made on the secondary LEGO market. Even taking into account the small prices of most sets, this is a huge market that is not well-known by traditional investors.”

Bailey agrees that most people are unaware of the potential value of LEGO sets. “As a LEGO lover, however, I understand why the sets can become an asset,” he says. “I’m not parting with mine anytime soon.”

https://www.architecturaldigest.com/story/legos-top-investment

....


Legos are manufactured from plastic. Most plastics are derived from oil, if I remember correctly. A side by side chart comparing the value of lego sets versus the price of oil could make for an interesting contrast.

California banned plastic straws in favor of paper straws. Around the world many crude oil derived practices are being deregulated out of existence. Some US states have banned the use of small gasoline powered engines. Gas fueled lawn mowers, trimmers and leaf blowers are being banned in favor of lithium battery powered or plug powered equivalents.

With regulation cracking down on crude oil derived things. The production cost of manufacturing lego bricks (crude oil derived) could rise significantly. Which could in turn fuel lego HODL prices as far as markets can sustain them. Although if crude oil ever became scarce enough to produce high returns on lego sets, our societal issues could have expanded far beyond a point where we're concerned about collectibles or toys.

That said I think I have to love the out of the box thinking present. Maybe if the apocalypse happens, people won't exchange gold or silver. They'll simply exchange lego sets as a form of currency. It appears lego sets appreciate at a greater sustained percentage than precious metals, anyway.

[Sterbens]

Talking about the collection of Lego Set toys, it's no wonder that since it was launched on the market, it has also been in great demand by both children and adults. Like it or not, back again to the people who are willing to pay dearly. Moreover, in today's market, anything can have a high selling value. Especially with Lego sets. At first glance, it's just a plastic toy and sometimes we can find it in the garbage pile because people don't know that it has such a great value.

Based on where I live, the Lego sets are no longer visible. Neither in the toy market, except for places like the Hot Wheels toy store, which are no less expensive. So how can we reach the Lego sets market in order to invest?

[jackg]

Based on where I live, the Lego sets are no longer visible. Neither in the toy market, except for places like the Hot Wheels toy store, which are no less expensive. So how can we reach the Lego sets market in order to invest?

I'm guessing the data from the study was probably only taken from a few places (such as ebay).

There's probably a lot of both online and in person trades (maybe also in person auctions if a set is very rare).



I suspect the 11% is probably a hard to get target too. I don't know how much Lego expanded since the 80s too and you run into the risk of discontinued sets not staying that way.

Also, the past might not be a good reflection on the future... The study was also done by collectors of Lego sets too.


If oil does become more expensive, Lego could either change the oils used to make the bricks (to distilled plant/vegetable oils) or change what some of their bricks are made out of material wise (such as using wood instead of plastic).

[NeuroticFish]

That said I think I have to love the out of the box thinking present. Maybe if the apocalypse happens, people won't exchange gold or silver. They'll simply exchange lego sets as a form of currency. It appears lego sets appreciate at a greater sustained percentage than precious metals, anyway.

As a father I can tell that Lego toys are hugely overpriced. Also a lot of clones/fakes do exist, from only cubes to full sets - few even with Lego logo on them - and all do match; of course, the originals are usually sturdier and fit better, but if one is not a parent (s)he may not see much of a difference if the box is not given. All in all you clearly cannot count Lego as a "store of oil/plastic value", there are way cheaper means for it, from the Lego clones to most the old/torn sports clothes.

On the other hand, based on this kind of news, parents may have to buy some extra Lego sets in advance for the next Christmas, just in case...

[Sterbens]

Based on where I live, the Lego sets are no longer visible. Neither in the toy market, except for places like the Hot Wheels toy store, which are no less expensive. So how can we reach the Lego sets market in order to invest?

I'm guessing the data from the study was probably only taken from a few places (such as ebay).

There's probably a lot of both online and in person trades (maybe also in person auctions if a set is very rare).



I suspect the 11% is probably a hard to get target too. I don't know how much Lego expanded since the 80s too and you run into the risk of discontinued sets not staying that way.

Also, the past might not be a good reflection on the future... The study was also done by collectors of Lego sets too.


If oil does become more expensive, Lego could either change the oils used to make the bricks (to distilled plant/vegetable oils) or change what some of their bricks are made out of material wise (such as using wood instead of plastic).

Online trading and auctions may be quite affordable. In connection with the rise of counterfeit goods, and it is not a little done by duplicators to drop the market price of Lego sets. Usually, a Lego Set toy collector will know the characteristics of real and fake toys. Distinguishing these is the key to owning a genuine Lego set. In terms of replacing plastic with wood, it means that the difference in price and characteristics will change? because it's about the authenticity of the goods.

[jackg]

As a father I can tell that Lego toys are hugely overpriced. Also a lot of clones/fakes do exist, from only cubes to full sets - few even with Lego logo on them - and all do match; of course, the originals are usually sturdier and fit better, but if one is not a parent (s)he may not see much of a difference if the box is not given.

If you have a dupe and a real one you can normally tell the difference too - the real stuff sticks a lot better but the counterfeit side has a lot more variety on what they make - potentially due to the lack of testing/quality controls...

Online trading and auctions may be quite affordable. In connection with the rise of counterfeit goods, and it is not a little done by duplicators to drop the market price of Lego sets.

Yeah counterfeiters will do a lot to drop the prices of goods too, this'll become more common now as well.

In terms of replacing plastic with wood, it means that the difference in price and characteristics will change? because it's about the authenticity of the goods.

The product will still be "authentic" but full plastic sets would become more valuable if they did replace the plastic material with something else.
Both would still be quite printable/mass producible too.

[The Sceptical Chymist]

Legos are manufactured from plastic. Most plastics are derived from oil, if I remember correctly. A side by side chart comparing the value of lego sets versus the price of oil could make for an interesting contrast.

Plastics are polymerized organic compounds, but for the life of me I can't remember if they're still making plastic from any of the hydrocarbons found in oil.  You'd think scientists would have figured out a cheaper way to synthesize the various forms of plastic without the use of crude oil byproducts.

I don't think a Lego vs. oil price chart would tell you much, because while oil has fluctuated wildly for many years, Legos that you could buy on the shelf of your local department store probably just rose with whatever the inflation rate was at the time.  The article is talking about Legos as a collector's item, and that has nothing whatsoever to do with the price of oil.  I'm not surprised that there's a market for them among collectors, but I don't know how long that's been a thing.

All in all you clearly cannot count Lego as a "store of oil/plastic value", there are way cheaper means for it, from the Lego clones to most the old/torn sports clothes.

No, that's what I was pointing out in my post above.  It's possible that if the plastic Legos are made of is indeed made out of oil that their price might go up a little if oil were to skyrocket, but I don't think there would be much correlation between the two things if you were to compare prices over at least a few decades.  And as jackg is also pointing out, the high price of Legos only goes for genuine Legos, because for whatever reason people want them, and they want the real thing and not some Chinese counterfeit or knockoff.

[fiulpro]

All those lost Legos that my brother tried to eat or stuff in his nose would be crying right now. I was checking the price of Legos for Christmas, the titanic one, apparently it's 500$, which made me extremely anxious regarding how fast the prices are rising and would we be able to keep up with the inflation?? This time of Legos!? It was supposed to be a present for someone and at the end I just got them a vintage camera Instead. My mum also decided to gift many if my Lego sets to other kids as well, I should be telling her regarding this now. But at the end of the day there are many cheaper alternatives available in the market as well, Legos are definitely the priciest ones but people are generally choosing the other companies as well. I do think that people who have collectibles of anything! Would make tons of profits for sure.

[qwertyup23]

Oh this is actually an interesting fact! I think I watched a video on YouTube before regarding the top 10 most expensive LEGO sets and many have commented that owning legos have been an investment on their part. I think it is also due on the demand/supply on how LEGO manufactures their toys. While most people see it primarily as a toy, others see it as an investment.

Interesting, however, that the demand/supply of LEGO has been consistently been sought after by collectors. By releasing limited-edition sets and seasonal designs, its price definitely skyrocketed the market that ultimately resulted to it being regarded as an investment.

[dothebeats]

Seeing how many great things one can do with lego sets, I do agree that their value will have a significant increase in the future. While they may remain as kids toys on most parts of the world, their cultural influence on all ages is undeniably huge, which may even be the reason as to why there is a growing market for lego enthusiasts. They even have master builders on some areas for each stores, which goes to show how they value legos as a whole.

[Silberman]

That said I think I have to love the out of the box thinking present. Maybe if the apocalypse happens, people won't exchange gold or silver. They'll simply exchange lego sets as a form of currency. It appears lego sets appreciate at a greater sustained percentage than precious metals, anyway.

It is an interesting take, however Lego sets have not passed the test of time, I understand that people can make money with collectibles and memorabilia but those markets are highly unstable and cannot be considered to be a store of value, the reason gold and silver are considered to be a store of value is because they have proven this through thousands of years, and while bitcoin is even newer than Lego bitcoin is scarce so we know it can perform the same function, while a Lego set can always be remade causing the price of that set to go down.

[Fortify]

Legos are manufactured from plastic. Most plastics are derived from oil, if I remember correctly. A side by side chart comparing the value of lego sets versus the price of oil could make for an interesting contrast.

California banned plastic straws in favor of paper straws. Around the world many crude oil derived practices are being deregulated out of existence. Some US states have banned the use of small gasoline powered engines. Gas fueled lawn mowers, trimmers and leaf blowers are being banned in favor of lithium battery powered or plug powered equivalents.

With regulation cracking down on crude oil derived things. The production cost of manufacturing lego bricks (crude oil derived) could rise significantly. Which could in turn fuel lego HODL prices as far as markets can sustain them. Although if crude oil ever became scarce enough to produce high returns on lego sets, our societal issues could have expanded far beyond a point where we're concerned about collectibles or toys.

That said I think I have to love the out of the box thinking present. Maybe if the apocalypse happens, people won't exchange gold or silver. They'll simply exchange lego sets as a form of currency. It appears lego sets appreciate at a greater sustained percentage than precious metals, anyway.

You certainly bring up an interesting idea - that there is money to be made in Lego. However the title is misleading as it implies that every Lego set is destined to go up in value when it is not. You could easily lose money buying into lego and it comes with all sorts of costs associated with reselling such as packaging, postage and fraud that get conveniently overlooked. It could become a lucrative business for anyone who has the time and patience to hunt down bargains, but like anything it'll probably take years to make a profitable business out of this so beware before jumping in blindly. After just a little research it's clear that some sets lose substantial value over time.

[hatshepsut93]

Lego is a speculative investment, while stocks and bonds can be to a high extent analyzed to predict how they will perform. Dogecoin has also outperformed stocks like Facebook or Apple, but it doesn't make it a good investment. Though I wouldn't say that Lego is a bad investment, it has huge cultural value and should be viewed as a collectible, but you can't just jump into this market without knowing anything about it, that's a sure way to lose money by making bad deals or even getting scammed.

[dunfida]

Seeing how many great things one can do with lego sets, I do agree that their value will have a significant increase in the future. While they may remain as kids toys on most parts of the world, their cultural influence on all ages is undeniably huge, which may even be the reason as to why there is a growing market for lego enthusiasts. They even have master builders on some areas for each stores, which goes to show how they value legos as a whole.

Which i cant really blame off with those kind of mindsets or impressions about on being a better investment because we know on how huge the influence these Lego or simply a toy over generations then we could really

say that it does really have that kind of popularity and recognition which cant really be simply be vanished out but in general sense then its incomparable for it by means of investment specially with Gold.

I wont really be crossing out gold on the best option in terms of store of value but why would need to choose if you could deal with both?

[mk4]

I'm having a hard time trying to take the article seriously lmao.

Like, sure, as could any other illiquid and speculative asset such as basketball/baseball/Pokemon/MagicTheGathering cards, or rare vinyls, or limited-edition sneakers, or Kobe Bryant memorabilia, or a Rolex/Patek Philippe watch, etc etc. But it doesn't automatically mean that these are better "investments" in a risk-adjusted basis.

[adaseb]

I don’t think that legos are better investments than gold or stocks. I think the author was just over exaggerating. You need to understand you have no idea which Lego set will be big in 20 years. So what are you going to do? Buy every single set that they release. They release maybe 100 new sets a year and some of these sets are expensive and extremely Large.

Where will you store these Lego boxes? Need to store it in some heated room so it doesn’t get water or moisture damage. Seems that holding gold would be much easier.

This is like one of those lucky investments where only 1 in 100 sets becomes so rare that it’s value appreciates. Either way great read.

[pinggoki]

They're a collectible and they do not generate daily or even annual income so I don't think that LEGO are a better investment than stocks or bonds not to mention that it's difficult to find a discontinued LEGO because they don't discontinue their sets easily and at the same time, no one knows which one's going to get discontinued.

[Wexnident]

Pretty sure this is overexaggerating? I mean I don't deny that LEGO sets do indeed have value since some people like collecting a bunch of them, but it only has value for well, that small group type. There's only a minuscule amount of people who would be willing to spend a huge amount of money on LEGO collectibles. Plus it's kinda, well, dumb? To compare collectibles to what, stocks and bonds? Like for real? People would've bought out every LEGO set out there if it was actually true.

[so98nn]

Could be.
With the collectible market up rising since ages one can think of LEGO as futuristic investment. However there are many cons in this investment considering the “availability” of the product on the market. It’s nothing like LEGO can not be manufactured by others or there is any sort of monopoly or patent in doing so. There is high chance of forgery since it’s widely available and can be mixed up with adulterated material easily. How would you verify a box of Lego that is opened up by kid and has missing parts too. The devaluation is at its peak.

But surely it’s something out of box. 

[davis196]

Really interesting article.
I remember having LEGO as a kid,but I don't remember where did I put those LEGO toys.They are probably thrown away in the garbage.This is like throwing a laptop with your Bitcoin wallet on the hard drive.
I'm pretty sure that the company,which produced LEGO toys will find an alternative to plastics.
I'm hearing lots of news about companies producing new kinds of materials,which are more environmentally friendly and easy to recycle.Sooner or later,plastics will be replaced by a another material.

Maybe if the apocalypse happens, people won't exchange gold or silver. They'll simply exchange lego sets as a form of currency. It appears lego sets appreciate at a greater sustained percentage than precious metals, anyway.

If the apocalypse happens,people won't bother exchanging anything,because they will be dead.