Forget About Gold: Study Says Investing in Lego Sets Will Earn You More Money

Economists have found that prices of retired Lego sets grow by 11% annually, which is higher than the average returns provided by gold and large stocks.
By
Jody Serrano

Friday 10:56PM

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Photo: Johannes EiseleI / AFP (Getty Images)
While some people may consider gold, jewelry, art, wine, or antiques good investments in the long-term, a new study challenges that notion and presents a unique and more lucrative alternative: Lego sets.

Economists from the Higher School of Economics in Russia have found that the market prices of retired Lego sets sold on the secondary market grow by at least 11% annually, which is higher than the average returns provided by gold, large stocks, bonds, and alternative investments. For their study, the authors analyzed the prices of 2,322 unopened Lego sets from 1987 to 2015 and information about primary sales and online auction transactions.

The study will be published in the January issue of Research in International Business and Finance.




“We are used to thinking that people buy such items as jewellery, antiques or artworks as an investment,” Victoria Dobrynskaya, an economics and finance professor at HSE and a co-author of the study, said in a university news article. “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.”


The researchers offer some reasons to explain why people pay big bucks for Legos. A significant one may be the small number of sets produced and the limited number of people who want to sell their Legos after they buy them. In addition, LEGO has been making Legos since the 1960s and has amassed a legion of nostalgic adult fans who value older sets.


Before you start wondering whether you have any Lego sets laying around your house that could be secret treasures, there are some things you should know. First off, prices for Lego sets on the secondary market, which vary greatly and range in returns from between -50% to +600% on an annual basis, typically start to increase two or three years after a set has been retired. This means you have to factor in high costs like delivery and storage into your investment.

Secondly, the prices of small or very big sets will grow faster than medium-sized sets, the researchers found. The sets that see the biggest growth in value on the secondary market are those related to famous buildings, movies, or holidays. As such, it shouldn’t be a surprise that some of the most expensive Lego sets include the Millennium Falcon, the Death Star II, and the Imperial Star Destroyer. Other highly valued Lego sets include limited edition sets and those given out at promotional events.

And finally, the secondary Lego market is not something you can jump into easily if you’re not a fan, Dobrynskaya said. There are a lot of Lego sets out there, and it takes a true fan to analyze the market and make a bet on a set that might be worth a lot more someday.

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At least if I step on gold or paper they don't hurt my paws like stepping on Lego pieces.

 

Sounds like Beanie Baby redux. No thanks. I think the market would be quite limited no matter what some pundit says. When the price collapses, like it did with Beanie Babies, they'll all moan and whine. Granted, there are many collectible toys out there, but there has to be a market for them. I guarantee it would be far easier to sell a good coin collection. Call me a friendly skeptic.

 

it's all melt value, otherwise you're just like the beanie baby folks and the stamp collectors.

 

I never bought or held one coin or stamp with a plan to profit. I am a coin and stamp collector - not a speculator. Fortunately, I currently have 14 grandkids and 21 great grandkids that I am nurturing towards collecting. My accumulation will go a long way if any of them ever get interested.

 

Legos may have have experienced a more sustained and robust market than Beanie Babies, but I don't think anyone should consider them as a "mature market" comparable to the long-term stability of gold. The stories of sports cards, Beanie Babies and even the Tulipmania from 17th century Holland suggest (but don't necessarily predict) that such markets crash not long after people start buying them as "investments." Collectibles tend to go crazy and implode. Plus, the examples that the article gives have specific generational ties to "Star Wars." Most pop culture items don't have the staying power of a solid established investment like gold. Is someone 100 years from now going to care about a "Death Star" Lego set? Maybe, but it seems unlikely. Legos do seem like a good short-term item to buy and sell while the market still has some life to it. But I think anyone "investing" in Lego sets in the long term will likely come out disappointed. Also, Lego sets, stamps and Beanie Babies never had a "melt value" to fall back on. Even if numismatic value plummets, gold will likely (but of course not guaranteed) to remain a commodity with inherent value. I think it's highly unlikely that Lego sets will get added to the NYSE or other commodity markets. So comparing them to gold seems misguided at this point.

 

It is sad, but I had a clerk who was addicted to Beanie Babies. She was going to get all of them and make a big profit later. She would spend her entire paycheck on just one if she had to. Of course, we know where that went.

 

I've bought a few pieces knowing that they will find a new home quickly.
I've even been standing in my local G&S store, texted some pictures to other people and asked if they were interested in that piece at that price point.
You would think I'd get an attaboy for being an outside sales rep

I know a guy that has sold a few kits of legos from a delinquent storage locker auction and then sold the random extra Lego bits by the pound.
People like legos...

 

I think the same death is in line for the specialty labels on coins, first strike, early release, etc. Who will care 100 years from now?

 

Yes, that sucks. I also have a friend, a man with a ton of kids! He has 8 children and for whatever reason he was also collecting Beanie Babies, he was even ripped off by a baby sitter for a few of them. He actually had them hidden from his children!

 

I love Lego. Namely Star Wars Lego sets. It amazes me the prices some of them fetch once they are retired. Several years ago, I stopped collecting all the sets and decided to focus on just the Ultimate Collector's Sets. They are bigger and more expensive but dang do they look good and they are fun to build too!

 

Here's one thing about Legos: they don't tone. Nor develop milk spots.

 

And I never bought a Lego set with a plan to keep it sealed in its original container. Legos are for play. Buy a sealed set for speculation if you must, but recognize that you're keeping it out of the hands of someone who would use it for its intended purpose.

 

Exactly. Everyone who buys those "special" coins are just throwing their money away. I honestly don't see how they'll retain any extra value down the road.

 

I knew you would dig up something Postive on LEGOS
-jeffB.

 

They were an important part of my childhood. (Yeah, "childhood", let's go with that.)

I'm still not fond of the single-purpose kits, though. I'm much more about "let's see what we can do with what we find" rather than "let's buy the parts we need and follow the instructions".

 

LEGO’s , got some Bernie babies if anybody’s interested ?…..LOL

 

Soo, we are taking financial advice from from Russia now?! What could wrong?...

 

I always throw the instructions away, it's just a suggestion. ...............................................then end up digging through the trash looking for them