Invest in LEGO®

Some might find it funny to look at LEGO as an investment. However, once you start looking at the returns it can provide, you’ll soon realise that buying LEGO sets can be an excellent strategy to diversify your portfolio. 

According to the 2021 study by the HSE University economists, LEGO investments can provide an average annual long-term return of a whopping 11%, offering a faster and bigger rate of return than stocks, bonds, or wine. 

But, of course, for LEGO to work its magic, you must first learn how to correctly invest in it. This, however simple it may look, can actually be quite tricky. 

Join us as we go through the ins and outs of LEGO investments. 

Learn how to turn these famous Dutch plastic bricks into a golden investment opportunity and how Splint Invest can help you maximise your LEGO investment efforts. 

 

Why invest in LEGO?

If, a few years back, you asked a financial advisor whether you should invest in LEGO, they would probably burst out laughing. 

But times have changed. After years of economic turmoils, investors are now on a constant lookout for new, alternative assets to diversify and protect their portfolios. LEGO has been such an asset for several years now. 

For LEGO fans and collectors, that’s not surprising. 

But if you’ve so far treated LEGO only as plastic bricks you can build cool stuff with, you’re probably asking yourself right now one question: why are LEGO investments so popular?

As usual with those kinds of questions, there’s more than one reason. 

Potential for high returns

As already mentioned, LEGO holds an incredible potential for generating high returns. The previously referred study for the HSE University confirms it. 

HSE economists analysed the prices of 2,322 LEGO sets from 1987 to 2015. The results were clear. LEGO investments, primarily retired sets, generate an impressive average annual long-term return of 11%. 

This provides true value for efficient diversification. Furthermore, it also means that LEGO sets can deliver returns that surpass well-established investment options, such as stocks or bonds. 

And keep in mind that it’s an average rate we’re talking about here. 

In April 2007, the first LEGO Creator Expert Modular Building, known as the 10182 Café Corner, was introduced with a suggested retail price of €149.99. Presently, it is being sold for as much as €3,020. This means that if you had bought this set then, you would have enjoyed an annual return of 20.6% until now. 

And this example is not an isolated incident, as there are other similar cases.

What’s more, purchasing highly demanded sets close to the end of life at a discounted rate offers the possibility for a short-term investment, as well.

Also, what’s important to mention is that LEGO shows such great potential for high returns at a relatively low entry barrier compared to other alternative assets like luxury watches or fine wines. 

Low correlation to traditional markets

Like other alternative investment assets, such as fine wine or whisky, LEGO shows little to no correlation to traditional markets. For example, the LEGO chain index shows a low positive correlation to the S&P 500  index of just 0.13 points

This makes LEGO an excellent asset for portfolio diversification. In some instances, it can even protect one's portfolio, working as a hedge against inflation or other market-related factors that may negatively affect traditional assets like stocks or bonds. 

High liquidity

One of LEGO’s key advantages for investors is the fact that it’s a tangible asset which, additionally, is relatively easy to sell, especially compared to real estate or stocks, which can’t compete with LEGO’s high liquidity. 

There are tons of LEGO collectors who are always looking for rare sets and minifigures to buy. If you invest in the right sets, you should be able to quickly sell them to collectors, other investors, or simple LEGO enthusiasts looking for fun sets to build. 

More than just an investment

The final factor behind the recent popularity of LEGO investments is a bit more trivial. Many investors are also collectors, who treat LEGO as their hobby. Their reason behind buying LEGO isn’t to sell it, unless not initially. 

Such people treat LEGO as their passion first, and investment second. It’s similar to people who buy rare cars, treating it as a hobby rather than an investment. 

LEGO investments vs other alternative assets

Although it can be incredibly lucrative, LEGO isn’t the only alternative asset you can invest in. At Splint Invest, we always recommend our members not to put their eggs in one basket but to build diversified portfolios. 

 

However, to build such a portfolio, you should first compare all options available. Here’s a quick breakdown of how LEGO investments compare to other popular alternative assets - luxury watches and rare cars:

How to invest in LEGO?

So yes, LEGO can be an excellent asset to invest in. That is, of course, if you know how to invest in it, which, contrary to what some might think, is trickier than it looks. 

Here are some tips to help you get started:

Find the right LEGO sets

When investing in LEGO, you’ll be mostly dealing with full LEGO sets, and those aren’t created equal, with some being rarer and more exclusive. 

For example, LEGO frequently releases limited-edition sets and collaborations with popular franchises such as Star Wars, Marvel, and Harry Potter. These sets often become sought-after collector's items, commanding premium prices in the secondary market once sets are retired (no longer produced). 

Owning such exclusive LEGO sets can lead to substantial profits in the future. 

Be also sure to look into sets that are retiring soon. 

There are tons of LEGO forums for collectors. A good rule of thumb is browsing them every now and then to see which sets might be worth your investments. 

Buy at the best prices

Although LEGO investments come with a relatively low entry barrier, especially compared to luxury watches or art, some LEGO sets can get quite expensive, especially limited editions and franchise collaborations.

That poses a question, can you save on buying new LEGO sets? You can.

As you’ll soon notice, the most expensive way of buying LEGO is through the official LEGO store. A much better option is to buy LEGO at third-party stores or platforms like eBay or Amazon. 

Be also on the lookout for any promotions or discounted sets. For example, LEGO tends to cut prices on Star Wars-themed sets for the 4th of May each year (Star Wars Day). Signing up for a LEGO Membership can also entitle you to some exclusive deals.  

Why is that important? Well, the reason is simple - the lower your initial investment, the higher your potential return on it if the set appreciates in the future. 

Learn how to store your LEGO sets

The condition of your LEGO has a massive impact on its value. And we’re talking here about both the set itself and its packaging. 

LEGO collectors always look for sets that are in stellar condition, with original packaging untouched. Such sets achieve gargantuan prices on secondary markets. 

Any missing pieces, damage to the box, lost instruction, or any signs of wear and tear (e.g., cracks or discolouration) can lower the value of the set you want to sell. To avoid that, be sure to store your LEGO in dark and dry places. 

Also, if you unpack your LEGO, be sure to do it carefully so that you don’t damage the original box. Be also careful when building the set and put all additional pieces in one bag. When dismantling, carefully count all the pieces and group them according to the pack numbers in the instructions. 

Even used LEGO sets can generate great returns if you ensure it’s in the best shape possible. 

Know when to sell

When you sell your LEGO also significantly affects the final return. The first rule here is to wait for LEGO to retire the set. Buying and selling sets that are still in production likely won’t generate significant returns, if any. 

Usually, people wait for 2-3 years before selling retired sets. However, this can vary depending on your return goals and the set you own. Sometimes, it pays to wait a bit longer for the set to become even more exclusive due to collectors buying available sets. 

A good rule of thumb is to set yourself a price point you might start considering selling your LEGO, for instance when it doubles its price or increases by 30%. 

Seasonality also plays a role in LEGO prices. Holidays, especially Christmas, cause a spike in demand for LEGOs, as parents search for presents for their kids. If you play your cards right, you can offset your sets then with a rather healthy margin. 

Potential advantages and risks of LEGO investments

Investing in LEGO can generate great returns and work brilliantly as a hedge against market-related fluctuations, protecting your portfolio. However, like any other investment, it also comes with some risks one must consider before they decide to invest in LEGO.  

Here’s a quick breakdown of potential opportunities and risks of buying LEGO as an investment:

 

 

 

Invest in LEGO with Splint Invest

Although investing in LEGO is definitely less complicated than investing in some other alternative assets, such as fine wine, art, or whisky, it can be tricky, especially for those who aren’t familiar with the LEGO market. 

If you find searching and buying individual LEGO sets too time-consuming or confusing, Splint Invest offers a fantastic alternative. 

Operating as an investment fund, Splint Invest collects funds from investors, finds alternative assets showcasing the best potential (including LEGO) and then buys and, when the time is right, sells them once they reach satisfactory returns. 

With our help, you’ll be able to build a diversified portfolio of alternative investments with a minimum effort, with us handling the research, purchase, storage, and sale. 

Create your account and invest in LEGO with Splint Invest today!