Investing in perfect Lego sets?

Alexland

A guy at work collects new Lego Star Wars sets in perfect boxed condition in expectation that they will be worth a lot more in the future. Personally I feel there are too many people collecting the modern Star Wars stuff and it will affect future valuations. Only the early stuff seems to be truly valuable.

However looking at the completed ebay sales (that actually sold) of the more mundane Legoland sets for Town, Castle, etc they do seem to have been a good investment. I guess most of these get opened and played with so it is rare to find them in new condition. The best returns seem to be on the sets which were most expensive to start with.

For example a perfect unopened pirate ship or train set costing under £100 in 1993 would now be worth over £600. Investing £100 in the MSCI World on 1st January 1993 would now be worth around £640 with reinvested dividends (but before fees) so it seems a comparable return.

What does the forum think? Worth a punt for a few thousand pounds? We have plenty of space in the attic and feels a lot more secure than P2P platforms. If you did go for it would you buy lots of cheap new sets or a few expensive older sets? Would the price growth likely tail off over time? Will the modern sets not grow in price as much? Is it a better asset for diversification than gold?

Alex

gary83

If you'd been asking this question twenty years ago you might have been asking that question about beanie babies, worth a fortune at the time and now practically worthless. unless you're an expert it's pretty hard to predict which toys will remain in fashion and be worth a lot more in the future, whilst it might make a good hobby or a bit of fun personally I wouldn't want to be investing large amounts in it. Besides it'd only take something like damp or mice in the attic & suddenly your mint condition boxes are ruined and they're just valued as second hand toys.

rr755507

Earlier today I was looking into whether selling on Bricklink makes much money. These guys buy sets and sell individual pieces. The consensus was no, the magins have nosedived because Lego is so popular, the company has massively increased production forcing the prices down.

The problem I think you'd have is selecting a Lego set, that isn't too popular today, but will be popular in 20 odd years, but also isn't being hoarded by lots of other people doing the same thing.

Worth a punt and a bit of fun - maybe.

I'd avoid storing Lego in the attic, as the high temperatures could cause problems with the plasticizer or fire retardants in the plastic.

MisterMotivated

I'm no expert but would personally steer clear of looking at such things as investments. There seem to be far too many adult children these days spending ridiculous amounts of money on Lego, comics, action figures, etc. For example, I have a distant friend who is 35 and spends a fortune on Lego and all sorts of Marvel stuff. I imagine a number of these people will want to keep the items MIB rather than opening/building/playing with them, so the market will probably be flooded for a long time to come.



I have to say though, I'm genuinely astonished that so many people are willing to pay, for example, £250 for a Lego set that, once assembled, vaguely resembles a Bugatti.

DigForVictory

I've a pal with a sort of otterbox on steroids in his attic. It's ex-military & I think had a former career shipping weapons, but it _just_ fitted through the hatch & lives across 4 joists.

Inside are his to be cashed in someday boxed sets of things. Yes, some Lego, some comics, some playing cards - all sorts of things that really need to stay pristine to hold their value. He's the sort of mad godfather who'll blue several hundred quid at Hamleys and then not venture in again for a decade - the lads reckon shopping with him is like exercising a Great Dane - good fun but you have to hold onto the leash firmly.

He says cheerfully that without that box, he couldn't collect this "for his second childhood" & also that in the event of fire, it's all toast. The box is many things but not I understand flameproof, beyond a certain amount of flame.

He does it because he has the storage & it amuses him. Me, I'd be spending even more than him on books, which noone expects to be pristine & which I'd enjoy reading, but to each their own savings policies. Plus it could be wine, which is a real grade A pain to store safely & correctly.

Only invest in Lego if you would get that much fun playing with it at some stage. Need not be this year - but you can't guarantee there'll be a market in another 20 years, so pick what you like, and see how the dice fall.

AnotherJoe

Alexland wrote: »

A guy at work collects new Lego Star Wars sets in perfect boxed condition in expectation that they will be worth a lot more in the future. Personally I feel there are too many people collecting the modern Star Wars stuff and it will affect future valuations. Only the early stuff seems to be truly valuable.

However looking at the completed ebay sales (that actually sold) of the more mundane Legoland sets for Town, Castle, etc they do seem to have been a good investment. I guess most of these get opened and played with so it is rare to find them in new condition. The best returns seem to be on the sets which were most expensive to start with.

For example a perfect unopened pirate ship or train set costing under £100 in 1993 would now be worth over £600. Investing £100 in the MSCI World on 1st January 1993 would now be worth around £640 with reinvested dividends (but before fees) so it seems a comparable return.

What does the forum think? Worth a punt for a few thousand pounds? We have plenty of space in the attic and feels a lot more secure than P2P platforms. If you did go for it would you buy lots of cheap new sets or a few expensive older sets? Would the price growth likely tail off over time? Will the modern sets not grow in price as much? Is it a better asset for diversification than gold?

Alex

No. The difficulty is, as said by others, knowing what will be popular in 20 years time. I feel confident that it wont be what is popular now. The reason those sets are worthwhile now is that no one thought them collectible at the time. Now that everyone thinks that Star Wars sets will keep its value and grow and start collecting them, that immediately almost makes it certain they wont be because there will be so many kept in perfect condition for so long.

I'd say that (pirate) ship has sailed. You are also betting that not only will that particular set be valuable, but even that Lego collecting will be a thing in 20 years time. And, you wont be collecting dividends along the way. If you didn't want to chance it you'd need to find soemthing that no one collected. A cancelled TV series or similar. However, you wont be the only person with that idea either.

Thrugelmir

Often the market in a particular product is driven by a number of wealthy collectors (at a global level). In my lifetime I've seen booms and busts in Toy Soldiers, Teddy Bears and Model Cars. Often the value is in the completeness / size of the collection. Rather than a few individual pieces. As it's the time and indirectly the cost it would take in locating the individual items.

jonnygee2

For example a perfect unopened pirate ship or train set costing under £100 in 1993 would now be worth over £600. Investing £100 in the MSCI World on 1st January 1993 would now be worth around £640 with reinvested dividends (but before fees) so it seems a comparable return.

You also have a lot of work to do. Choosing all the sets, buying them, and then selling them on in the future one by one. Also once their value gets past a certain point you might need to insure them.

As an investment you'll probably never get round to selling them. But, what they might be good for - they might make nice gifts to people later in life - the kind of thing you can gift without attracting the attention of the taxman :-)

jamei305

Did you factor in insurance costs? It would be annoying if you kept a bunch of toys in the attic for 20 years and then in the year in which they were to become really popular and valuable, your roof leaked and they all got damaged. I suppose you could view this as platform risk.

Some insurers set a single item limit, but some also limit the total payable on all valuable items, sometimes as a proportion of the contents sum insured. Also, would you be confident they would pay the value for each item that you would expect?

There are other things to consider, such as the capital gains tax allowance being abolished or merged/aligned with income tax and the personal allowance. It wouldn't be much fun if you had to pay 40% tax on the sale of each item.

jonnygee2

It wouldn't be much fun if you had to pay 40% tax on the sale of each item.

Let's face it, no one is paying CGT on lego sold on ebay.

Alexland

Thanks for all the feedback.

I had a good experience around 15 years ago selling a used and incomplete Thundercats Cats Lair that originally cost £70 new for £250 on ebay and probably could have got over £500 if it was in perfect new boxed condition.

I know nothing that would help me invest in wine and am suspicious about anything marketed from the outset as 'collectable' such as Beanie Babies or Star Wars Lego but I have spent many years considering the more mundane Lego sets, intensely studying catalogues and am now involved again as my 3 year old is already talking about what types of Lego excites him. Despite the increase in production I have conviction this stuff will continue to be popular as today's children turn into future adult collectors. You are right I may never sell in my lifetime and my children may inherit them.

I will avoid the sets where people are likely to horde them and stick to those most likely to be played with - value investing? In terms of age of set it might be worth collecting a variety of sets from new to old which takes away the decision - passive investing? I will do some research on the ideal storage temperature and practical storage issues perhaps paying a bit upfront to encapsulate in plastic boxes or something similar.

Alex