Investing in LEGO: how long until I break even, make profit?

[BrickG]

So I'm heavily considering buying enough to break even with my expensive hobby. The hobby is just too expensive to do otherwise!

So... in your guy's experience how long did it take until you started at least breaking even and using the funds to also pay for future sets?

Of course you need to start with a set influx. Then you usually have to wait for your sets to retire (or snipe them just before they do). You make sure you buy sets that will be popular (some are obvious like the Falcon, others are not).

Idunno I just want to buy sets, buy multiples (especially of Star Wars, LotR, etc) and finance my own collection. Then start selling them but that part usually takes a few years!

What has your experience been like? I have more than enough $$$ to start up the process but I'm not sure when it'll start giving back, or even start funding the original buys. If there's one set that'll sell at a high price in the future will it take 2ish sets to break even (one for playing with, another for selling) or more?

bleep bloop

[Luke_likes_Lego]

Hi BrickG,

I would be very careful not to risk taking the enjoyment out of your hobby....consider whether you want a situation that - every time you do get a chance to shop for LEGO - you are doing so with dollar $ign$ in your eyes.

Back to your question....

If there was a formula that guaranteed high return on investment, in a reasonable time period - it wouldn't just be LEGO enthusiasts considering it - so there will always be risk....but there are plenty of worse ways to risk your money.

My experience, not just in LEGO, is that when I've bought things I've loved - they're easy to sell later. When I've bought beyond my needs (anyone want some #35 Danco o-rings for their train wheels?? ), I'm still sitting on them.

My Cargo plane's value was getting silly...but now LEGO are releasing a new Cargo plane which may settle the price on the old one down a bit. I'm not bothered about it though, because I wouldn't want to part with my original. I'd hate to be fuming - over something completely out of my control - in this situation.

If I was going to go down that road, I'd consider used sets that I could enjoy and display in the holding period.

Try to keep enjoying it - one of the reasons it's an expensive hobby is 'cause it's so COOL!!!!

LLL

[BrickG]

Well by my calculations for each set I buy and open up for myself I'd need to eventually sell 1-2 versions of that set post-retirement to make the money back. Taxes would take away a chunk of the profits but that might be taken care of if I only buy sets on sale.

I'm not saying I'd buy 1-2 extras of each set I want. I'm just using that example for easy math :P. I'd end up investing in sets I think would sell well after they were retired. Meaning for each $100 I spend on Legos for myself I'd spend an additional $100-200 as an investment on other stuff that would theoretically sell for 2x or more on average 2 years down the road (or much sooner if I snipe sets as they're about to retire). If I save enough on sales the taxes won't bit me in the bum much and buying 2 sets, keeping one and selling another should theoretically pay for themselves. 3 sets and if I choose the sets well I'd be in profits for further Lego expansion hobbies :P.

But I'd need to spend a big chunk of money and would likely not see that paid back for quite some time.

Idunno if I'm not taking into account something but by my math, if I choose sets well I'd need to buy up to 3 (keep one, sell 2) to break even or make a tiny bit of profit. (again using the same sets as an example, I wouldn't literally buy 3 of each set I want, just of ones I think are good investments). However for the first few years the profits wouldn't be much at all as I wait for enough of my sets to retire and also sell.

I don't know if I'm way off base here. It would seem to be a somewhat safe investment (unless Lego crashes like I suggest in another thread) but take a good while to actually break even and longer to pay off :P. Unless I went with buying an absurd amount which I don't want them to be a second job :P.

Edited June 1, 2013 by BrickG

[Stinky]

I think there are a lot of better things to invest in than Lego. Gold for example

or solar energy industry. Lego is meant to play with. It even translates as such.

[leoparder]

I don't think Lego is made to do profit. What is wrong with you people ?

Just enjoy and play. Maybe the question is, why do you need to keep buying sets ? Maybe you have enough to MOC and have fun. Just buy a few ones from time to time.

Edited June 1, 2013 by leoparder

[Cogito Lego Sum]

Investing in Lego ? Do you invest in skiing, or in videogames, or in books ? The Lego passion is cheaper than Ferraris or golf. Cheaper than a lot of things, in fact. There's a lot of ways to get cheap sets, and more to get very cheap bricks (especially if you are in the US). Sell an old set from time to time to meet and please a collector, may be, and it's quite simple. But sell old sets to make money, it's quite hard I think,, and it takes quite an organization (it's a part-time or a full-time job). May be you'll get better advices on specialized sites...

[BrickG]

The Lego passion is cheaper than Ferraris or golf.

Well most hobbies are probably cheaper than rich people hobbies :P.

I'm mainly talking about just using Lego to finance my Lego hobby. I wouldn't go for sizeable profits. Just if I made any they'd probably go straight to the Lego hobby. Lego is pretty expensive (kind of useless comparing it to sports cars and stuff :P) and it would be nice if it at least paid for itself. I'm not made out of money.

[Andy D]

While it is not difficult to make a little money buying and selling LEGO it an awfully crowded field. Some folks are like you, just trying to sell enough to finance their hobby and others who sell up to several hundred thousand dollars selling LEGO and other toys, that's gross sales, not profit. Profit for $100,000 might be $$20,000 and an awfully lot of sets to sell $100,000. Say $100 per set, that means that they handle $1000 sets, that's 3 sets per day 365 days a year. Lots of work.

I have read posts on a forum dedicated to LEGO investing. Some of the posters discussed buying multiple copies of LEGO sets to put away, just to sit on and wait until they gain value. Not all sets will gain value, some are just not popular enough to gain value and may never be popular enough, so you will be lucky to break even on those sets.

If you want to completely fund your hobby, you may have to spend four or five times what you spend on your hobby for sets waiting to gain value. Say you want to spend $1000 per year for your sets, you might have to spend $4000 or $5000 on sets to put away so you can sell them in a couple or three years for a $1000 more than you paid for them, thus funding your hobby.

So for the first 2 or 3 years you spend $5000 to $6000, per year, that might be $15,000 to $18,000 before you sell the first set, then after to or three years you start to sell. No guarantees that you can make the profit you expected.

For me, it seems it is just cheaper to buy the sets I want and not worry about what I spend on my hobby. Unless you want two hobbies, building LEGO and buying and selling LEGO.

Whatever you decide, good luck and have fun.

Andy D

[LEGO Guy Bri]

I think AndyD has it right, it would be much more work and time for the amount you'll regain. Granted, I've bought a few sets for resale, just in case money gets to tight for something I really want. And I still have to wait for it to discontinue. That is a major downside; it takes years, just for speculation. Most sets seem to not make a big splash on profit-over-investment. I spent the first 2-3 years after returning to LEGO, searching for sets I wanted as a kid, but never got the chance, on ebay. I VERY rarely spent 20%+ over RRP on a discontinued set, and most of those few where train sets that don't show up very often. Then again I really can't give definitive proof that this goes for all themes. Most action-themed, licensed products seem to do ok on the secondary market, but it's the larger, more expensive sets or very rare sets that turn bigger profit.

As for resale, I don't know about you, but I find listing items on ebay, or any other similar site. It's incredibly boring and very time consuming. Although, I've sold only a few LEGO items, I've sold numerous other items throughout the year and hated everything about it, except getting money. Shipping can also be a headache, unless you live near your postal carrier.

I'd honestly find some other way to supplement your spending habits for LEGO. Maybe a 2nd, part-time job, or like Stinky said, look into other investments? Or aim a bit lower on trying to match your spending habits, say supplement 10-30%. I would be very interested to hear of someone successfully buying/selling LEGO on the secondary market as a part time job, though. Anywho, best of luck BrickG

[Darth Dino]

Hi

well, to combine Legos "play" intention and your "investment" intention i found for myself this way:

Purchase exclusive sets instead of normal ones if possible. For exaple i have the modular Fire-Department instead of the System one, i have the Maersk train instead if the normal cargo train. Both are fun to play with but also an investment into the future. You can sell them even not MISB very well in the future, for sure without loss.

Even if you are not into trains, the Maersk train will be a great source for anybody of rare Maersk blue.

I do not "invest" in sets that are 100% useless for me if i will not be able to sell them. So no LOTR or Friends for me even they will probably sell great in the future. I only buy things i like today.

Dino

[Jargo]

This thread makes me feel nauseous. Of all the ways to make money, hoarding children's toys to sell for profit has to be one of the most despicable.

[Grimmbeard]

This thread makes me feel nauseous. Of all the ways to make money, hoarding children's toys to sell for profit has to be one of the most despicable.

I wouldn't say it's despicable. Thanks to these people, we're able to buy retired LEGO online.

I would say that just keeping all the boxes locked away, never to do anything with them, is bad. But that's obviously not what he'd be doing.

Edited June 2, 2013 by Grimmbeard

[Jedi master Brick]

This thread makes me feel nauseous. Of all the ways to make money, hoarding children's toys to sell for profit has to be one of the most despicable.

I don't think it is despicable because if a set is selling out really quickly TLG will probably make more, so I don't think it would stop any children getting sets unless they have already finished the production run.

[Andy D]

I am not sure I see anything bad about any of this. If someone wants to buy sets to try to sell later, for any price, be it reasonable or over priced, who cares. If be prices are reasonable folks may buy them, if prices are not reasonable maybe no one buys them, who cares.

If someone wants to buy LEGO or anything else and stick them in a closet to never see the light of day again, who cares. Maybe that is just their hobby, to collect unopened LEGO or anything. No one person can buy enough to make a difference in the supply.

Just MHO, YMMV

Andy D

[Redhead1982]

To add my share, I recently opened a Bricklink store to offer there some of the parts and minifigs that I wasn't using (or needing) anymore. In about six months, I sold enough of the un-used bricks from my collection to afford the Palace Cinema, but I never considered how much I payed for those parts in the first place .For the moment, I see my BL store as a second market to offer other some parts that would otherwise just sit on my desk and be of no need to me, hence I also go with low prices to ''get rid'' of those. For the time being, this suits me nicely, but it's far from making profit - it's more making room for new sets/parts.

[AndyC]

Personally I think the best approach is only to buy sets you'll be happy to open if they turn out not to be profitable. No matter how hard you try, picking the ones that both increase in value and that you can manage to sell on at profit is never going to be an exact science. Which means either you go down the route of parting out sets and selling piece-by-piece (a slow and not necessarily profitable route) or you just open up those that you can't sell and enjoy them for what they are.

Spending more than you can afford on the assumption some great profit will come out of it one day is a fools game, however.

[Fugazi]

Please let's keep this topic focused on the economical aspects of investing in LEGO, and not on the moral issues.

[Alcarin]

I think overall investing in LEGO will become worse and worse due to increasing peopel doing it.

So I would advice you only do hobby investing like me.

That means you buy a couple sets (500-1000$ budget) each year put them away and sell once they double in value.

Its how I am doing with decent success, but takes time and patience.

And problem with buying what you like is you want to open it which means essentially you have to buy DOUBLE of each set to ease your minds ;)

[CopMike]

Here´s a link to Brickpicker which is all about investing & making a profit in Lego.

[Cwetqo]

Friend of mine makes nice living with it (in additon to his rather low regular salary), but it takes a lot of work and patience. For example: 10193 - MMV. he bought several just shotly before it was out two years, but it stayed on shelves at least two additional years and even now prices are not that high. Many predicted that this set will be much wanted, but its not, so for now its just bad investment. Similar is with some other sets (firebrigade for example), while others really gain high price fast.

Best way is to buy exclusive set in bulk from bricklink ro E-bay resellers (you could get 10-20% discount that way) and sit on them as long as possible.

[Hey Joe]

I dunno guys (and gals). Business school taught me that you should make at least 3X your investment. This sounds like nickle and dime stuff here. If you are smart, lucky, hard-working, etc. then I guess it's possible, but your money (and time) might be put to better use elsewhere.

Does anyone know how much you have to spend to buy in bulk from Lego (or their distributor) and what is the minimum amount of sets you need to buy?

Buy low and sell high is the key, right?

Joe

Edited June 3, 2013 by Hey Joe

[Darth Dino]

Hi

i think "money making" can mean different things.

Selling of sets you do not like anymore or your are just out of shelf space with a little plus is one thing. That is what i am doing, i am sure sets i buy will not lose their value over time, even i play with them. Thats for sure for most Star Wars and exclusive sets like modulars.

Making money to get out real money or even live from that income is a diffrent thing. That means buying lots of bulk sets, store them up to the ideal timepoint AND: Never play with them. I do not do this whil i thing Lego sets should be opend and played with, even i just buy MISB sets.

Dino

[Andy D]

Friend of mine makes nice living with it (in additon to his rather low regular salary), but it takes a lot of work and patience. For example: 10193 - MMV. he bought several just shotly before it was out two years, but it stayed on shelves at least two additional years and even now prices are not that high. Many predicted that this set will be much wanted, but its not, so for now its just bad investment. Similar is with some other sets (firebrigade for example), while others really gain high price fast.

This is what I get from reading Brickpicker. Buying and selling LEGO seems like a lot of work, with a lot of risk, inventory sitting (you have to dedicate a rather large, temperature controlled area for storage) with possibility of damage (does your homeowners insurance cover it?). Will the price go up or down? Some sets go down. Shipping costs and damage in shipping (who pays for damage?) Then there are the incomplete sets for various reasons, we have all heard about many missing pieces from sets, sets that were supposed to be LEGO, buy were rocks (who pays?) There are lots of pitfalls, some folks are making money, but is it enough or he risk? We all know who asumes the risk... The seller!

I dunno guys (and gals). Business school taught me that you should make at least 3X your investment. This sounds like nickle and dime stuff here. If you are smart, lucky, hard-working, etc. then I guess it's possible, but your money (and time) might be put to better use elsewhere.

Does anyone know how much you have to spend to buy in bulk from Lego (or their distributor) and what is the minimum amount of sets you need to buy?

Buy low and sell high is the key, right?

Joe

I read about one person who makes a living reselling LEGO and other toys, his gross is in the $300,000 range and he still doesn't sell enough to buy from LEGO or a distributor. I have read that LEGO (in the USA) mainly sells to their own stores, Legoland, Target and Toys R Us Costco, WalMart, Sam's Club and other big companies, not individuals.

In order to buy LEGO at less than retail you have to haunt sales, look or deals on Amazon, eBay and other resellers. Not easy to buy the "good sets" at reduced prices.

As mentioned before one needs to purchace many sets and just sit on them for several years before selling the first set. Who has $20,000 or $30,000 (a small investment) to put into LEGO on the off chance that it will increase in value?

We all hear about he random person making a good return on LEGO. But what about all the ones who lose their shirt?

Good luck!

Andy D

[dvsntt]

Would you ratehr Lego be a business or a hobby? If it's going to be both, its a business.

[MikroMan]

Well, I've been doing this on a small scale for a few months now. I don't really want to go into investing full time, but my local stores often have sets that have gone EOL a year or two ago. So far, I've gotten 8214 Lamborghini Gallardo Polizia, Ferrari Victory, 4837 Hagrid's Hut, 4841 Hogwarts Express, etc. all at a minimum of 10% off retail price. Some of them I sell online for decent profit, some I open and some I keep in storage to open at a later date. It allows me to buy a set or two for future investment and for myself.

I only buy the stuff I like, because I know that even if I don't sell it, I can still use it to build a great set and then integrate parts into mc MOCing collection.