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We've all heard the rumours that investing in LEGO is better than gold, but how true is that? This series of guides will hopefully shed some light on the illusive world of LEGO investing and how you can make some spending money whilst enjoying your hobby!
I myself begun my investment journey in late 2022, and have found moderate success with short-term investment, but the "long hold" style is by far the most profitable form of investing, albeit the most time and storage intensive option.
What Do You Need?
There are very few things needed for someone to get into investing in LEGO, however a seasoned investor will have a good knowledge of LEGO sets from a variety of themes, including those that the investor themselves wouldn't buy from. Secondly, I would recommend a dark, dry area to store your sets. Local hardware stores will likely have shelving that can be used. I would advise against stacking your sets on top of each other, unless you're intending to hold for a decade approximately where shelf-wear is to be expected.
Importantly, patience, restraint and an open mind are incredibly valuable investment tools that are often overlooked. Buying close to retirement dates is the easiest way to reduce the hold time, whilst restraint and openness to other themes are important for diversifying your investments.
When to Buy?
When considering when to buy sets, its obviously optimal to buy sets on sale and clearance. I aim for at least 30% off, however some sets are so popular and will never go more than 10% off at some retailers. Nowadays, this may present a red flag as other investors will be stacking this set also and demand is high. Logically, this represents opportunity to LEGO and will likely cause them to hold off on discounting the set, and in some cases, delaying retirement entirely.
The key is to buy sets at an RRP discount to enable you to sell the set at a later date at RRP and still be in the green. This can occur if a set has been hoarded during sales, and demand does not much supply, and prices drop.
Logically, buying as close to retirement as possible is good, as sets will generally have a "retirement pop" where the price will exceed RRP as the set is no longer available. However, one must be careful not to miss out as some sets will enter semi-retirement approximately 6 months before the date as stock is not replenished. An example of this is the UCS Gunship, where it was Out of Stock at most retailers well before the retirement date due to stock not being available to order.
Using investment tools publically available, such as BrickEconomy or Rebrickable, can help you to make decisions regarding discounts and investment potential and should be used liberally. These sites can indicate unique minifigures and pieces and give information as to potential retirement dates and associated sets. Most importantly, these can give you tangible data and predictions on the profitability of sets in the past, and speculate on the future of sets.
What to Buy?
The question that is on everyone's mind, and every group I am part of gets asked this question regularly. The short answer is its entirely up to you. The long answer is, do your research. Investment is not a get rich quick scheme, and the time you put into set selection and timing can pay big dividends in the future.
I have found that when sets are not retired yet, but are generally disliked by the community, they tend to go on sale more often to clear stock. This is a good opportunity for someone to get these sets at a great price, and hold till retirement. An example of this may be the Dark Trooper helmet, whereby most investors believe this set will not do well, and have not hoarded many of the set. This may result in low supply and moderate demand in retirement, resulting in price increases.
Overall, look at different themes outside of you as a consumer, as some sets in unpopular themes have done very well. The big licensed themes are usually a safe bet, such as Disney, Star Wars and Ninjago. For the budding investor, these are good themes to begin with, however their prices have been steadily increasing and the margins are becoming quite thin.
Some themes such as VIDIYO and Hidden Side were considered flops but some profit can still be made as some individuals will still want to complete their collections of these short lived themes. LEGO CITY as a theme is a good starter investment as it has appeal across a range of ages and demographics, from city builder AFOLS, to kids wanting a monster truck. I, myself, have been chasing some older LEGO Lunar sets that are quite expensive now.
Where to Buy?
Again, the short answer here is wherever you can find the best discounts. Overall, many retailers carry LEGO and offer discounts that can be quite competitive. Often, Amazon is the best place for LEGO as the deals are automatically applied to match retailers that may not be as easily accessible to some customers such as, in Australia, David Jones, Myer, Target and K-Mart. Local toy stores can also be a good source of sets, and in some cases, the lesser known retailers that may not advertise their selection of LEGO as heavily may end up having retired sets still at, or slightly above, RRP. Again, in Australia, an example of this may be HobbyCo or KidStuff.
Conclusion
Overall, LEGO investing is not for someone looking for quick flips, or to make their millions. I personally use these strategies to give me some extra money to buy myself sets that I enjoy and build. During an extra set or two when you find a good deal on a set you're going to build can build up over time to quite the collection of investments, and can help to pay for more expensive sets in the future when you sell.
Disclaimer: This information on BrickNews.com is intended to be general in nature and is not personal financial product advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. In particular, you should seek independent financial advice prior to making an investment decision in relation to a financial product (including a decision about whether to acquire or continue to hold).
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