LEGO Sets Might Be a Better Investment Than Stocks, Bonds, or Gold

The unfortunate part of turning a profit on collectible playthings is that you can’t enjoy them. Slabbed comic books go unread; vintage Star Wars action figures are condemned to their blister-packed prisons. But for people who can somehow resist the urge to rip open that LEGO set, fortune may await. Bloomberg recently reported that the brick building kits seem to serve as a reliable asset that can pay off over time.

Bloomberg cited a 2018 study [PDF] that demonstrated a stronger return for LEGO releases than with stocks, bonds, or gold. The reason is the supply and demand typical of the collector’s market. A new LEGO set will sell for a nominal retail price; as demand exceeds inventory and the sets are discontinued, the price on the aftermarket rises. For example: A 2007 Millennium Falcon kit carried a sale price of $499.99. In 2016, it was selling for nearly $4000.

That would be considered a big score. But the study, conducted by Victoria Dobrynskaya of Russia's National Research University Higher School of Economics and independent researcher Julia Kishilova, looked at 2322 kits dating back to 1987 and found that profit existed across a spectrum of LEGO-branded products. Sets carrying Harry Potter or Star Wars themes yielded an average 11 percent annual return. Some, like a 2014 Darth Revan, went from $3.99 to $28.46 in just one year, earning a return in excess of 600 percent.

Small and large sets tended to have the greatest increase in value, the smaller due to their comparative rarity and the larger ones due to their acquisition price. Licensed sets tend to achieve the greatest returns, though Dobrynskaya found that The Simpsons sets have traditionally failed to turn a profit.

Should you begin to regard LEGO as a potential avenue for retirement income? While the property experienced a resurgence of interest when it grabbed the Star Wars license in 1999 and has remained strong ever since, there’s no guarantee demand will continue unabated. Then again, the fact that the sets have a vibrant community devoted to building means they’re also unlikely to suffer the same fate as short-lived fads like the Beanie Babies.

The bigger problem? Unlike stocks, LEGO sets are tangible, with some coming in massive boxes that need to be carefully stored so they’re not exposed to damage. They’re also subject to the same speculative dangers as conventional investing. If you bought that Millennium Falcon, it's worth bragging about. If you decided to stock up on sets related to Atlantis or the 2010 movie Prince of Persia—which bombed—the price could sink. Like a bad real estate deal, you could be stuck with little more than a pile of bricks.

[h/t Bloomberg]