Have you ever looked at your kid’s LEGO collection and thought, “There’s probably more value here than in my 401(k)”? Well, you might actually be right. While financial advisors have spent decades steering us toward stocks, bonds, and shiny gold bars, there’s a colorful, interlocking alternative that’s been quietly outperforming them all: LEGO bricks.
I know what you’re thinking. “LEGO? Those plastic toys that mysteriously migrate to the exact spot where my bare feet will find them at 2 AM?” Yes, those exact same plastic pieces might just be your ticket to impressive returns. Let me show you why these nostalgic building blocks deserve a serious spot in your investment portfolio.
The Numbers Don’t Lie: LEGO’s Superior Returns
When I first heard about LEGO as an investment, I was skeptical too. But then I saw the data.
Researchers at the Higher School of Economics in Moscow didn’t just casually glance at some LEGO prices – they dove deep, analyzing 2,322 LEGO sets from 1987 to 2015. What they discovered was jaw-dropping: the secondary LEGO market has delivered an average return of 11% annually. Let that sink in for a moment… 11%!
That’s not just good – it’s better than what you’re likely getting from your stocks, bonds, or that gold you’ve been hoarding. The research team, Victoria Dobrynskaya and Julia Kishilova, focused specifically on new, unopened sets, which showed an average return of at least 11% (or 8% in real terms).
But here’s the thing…what those researchers found, and what many other popular sites (including The Guardian) are reporting as the annual ROI of LEGO investing…is the total average of the market. This does not account for your skillset as a LEGO investor, where you can achieve returns far beyond this 11%.
But more importantly – it does not account for our ability to buy the LEGO sets at steep discounts. By simply buying the set at 30% off, your 11% return would jump to 58.6%.
And remember…Warren Buffet, the most famous investor of all time and one of the richest men in the world, has made an average of around 20% per year in his stock market investments.
Still think LEGO is just child’s play?
Why LEGO Outshines Traditional Investments
So what makes these colorful bricks such financial powerhouses? It’s not just nostalgia (though that certainly helps).
Strong Historical Performance
While past performance doesn’t guarantee future results (my lawyer made me say that), LEGO’s consistent outperformance from 1987-2015 is hard to ignore. We’re not talking about a flash-in-the-pan trend here. This is nearly three decades of LEGO sets appreciating faster than traditional investments. Even Brick Investor™ has highlighted reports that LEGO represents a new investment frontier that outperforms stocks, bonds, and gold.
The LEGO Group’s Unstoppable Growth
LEGO isn’t just winning in the secondary market – the company itself has been on an incredible growth trajectory. Since the early 2000s, LEGO has transformed from a company on the brink of bankruptcy to one of the world’s most valuable toy brands. Their revenue has grown from around $1 billion in 2005 to over $9 billion in recent years – a staggering 800% increase!
This growth hasn’t happened by accident. LEGO’s strategic partnerships have fueled both popularity and scarcity. Their collaborations with Star Wars, Harry Potter, and Marvel have produced some of the most sought-after sets. And just recently, LEGO announced a partnership with The Pokémon Company that sent waves through both fan communities. When these limited-run partnership sets go out of production, their values can skyrocket.
Think about it – LEGO’s growth isn’t slowing down. As they continue to innovate and partner with beloved franchises, they’re creating tomorrow’s collector items today. The question isn’t whether LEGO will keep growing, but whether you’ll be positioned to benefit from it.
Lower Initial Investment
Let’s be honest – not all of us have thousands sitting around to dump into the stock market or buy gold bars. With LEGO, you can start small. That $150 Star Wars set might seem pricey for a toy, but as an investment? It’s practically a bargain when you consider its potential appreciation, especially if you get it for an even better price.
The Discount Strategy: Minimizing Your Risk
Here’s something the average investor doesn’t know: you don’t have to pay retail price for your LEGO investments. Savvy LEGO investors regularly purchase sets at 20-30% below MSRP through sales, promotions, and strategic buying.
Major retailers like Target, Walmart, and Amazon routinely discount LEGO sets during seasonal sales. LEGO’s own website offers double VIP points (effectively a 10% rebate) during certain periods. And with some retailers offering price-matching or additional discounts through credit card programs, your entry price can be significantly reduced.
Why does this matter? By purchasing at a discount, you’re creating an immediate buffer against potential losses. Even if a set doesn’t appreciate as expected, you’ve minimized your downside risk. And when it does appreciate (as most sets do after discontinuation), your percentage return is amplified because of your lower entry point.
This discount strategy is something you simply can’t do with stocks or gold – you’ll always pay market price plus fees. With LEGO, however, you can immediately position yourself ahead of the curve.
Resilience to Market Risks
Remember 2008? Or the pandemic crash of 2020? While your stock portfolio was taking a nosedive, LEGO sets were largely unaffected. The research showed that LEGO returns are not exposed to market, value, momentum, and volatility risk factors. In fact, they’re weakly dependent on the stock market overall. When the economy gets shaky, those plastic bricks stand surprisingly firm.
We could theorize as to why this is the case. For example, even though LEGO sets are expensive – they are less expensive than that vacation at Disney. It’s possible that fans turn to LEGO as a fun indoor hobby while passing on more expensive things such as vacations.
Regardless of the cause, however, it is evident in the data that LEGO sets continue to sell extremely well even during times of economic uncertainty.
Consistent Positive Returns: The Compounding Advantage
Here’s where LEGO investing gets really interesting – consistency. While the stock market might average 7-10% annually, that average includes dramatic ups and downs. One year might see a 20% gain, followed by a 15% loss. Those down years can be devastating to your compounding returns.
LEGO investments, on the other hand, rarely experience “down years” after retirement. Once a set is discontinued, its value typically rises steadily over time. This means your LEGO portfolio is much more likely to experience consecutive years of positive returns, creating a much smoother and potentially more powerful compounding effect.
Let’s put this in perspective: A $10,000 investment that experiences five consecutive years of 11% growth will be worth approximately $17,100. The same $10,000 invested with alternating years of 20% gains and 5% losses (averaging 7.5% annually) would only be worth about $14,800. The consistency of returns matters almost as much as the average return itself.
This steady appreciation pattern gives LEGO investors something stock investors rarely experience: predictability.
Full Control
When you invest in stocks, you are putting your trust in that company. You really have no control over whether they grow the business next year, or they go heavily into debt to pursue costly mistakes.
When you invest in LEGO sets, you are giving yourself the full control over your investments. You can make the decision on which sets to buy, what price to pay, and when to sell them. If you learn how to do it the right way, then you may be able to be much more confident in this investment in yourself than in any investment in a stock.
Tangible Asset with Intrinsic Value
Unlike crypto or even some stocks, you can actually hold your LEGO investments in your hands. There’s something reassuring about that, isn’t there? While gold also offers this tangibility, LEGO has something gold doesn’t – cultural significance and emotional connection. Try playing with a gold bar. Not nearly as fun.
This ensures that the LEGO sets that you buy will always hold value. Fans and builders will always be looking for the old retired sets to add to their collection. We can’t say the same for the latest speculative crypto coin.
The Dynamics of the LEGO Investment Market
So what makes certain LEGO sets skyrocket in value while others barely budge? It’s all about understanding the market dynamics.
Scarcity and Limited Production
LEGO regularly discontinues sets, creating instant scarcity. Once a popular set vanishes from retail shelves, the only place to get it is the secondary market. Add in the collector special editions with their limited production runs, and you’ve got a recipe for rapidly appreciating assets.
But here’s the insider tip you won’t hear everywhere: keep an eye on the LEGO investing communities to learn the latest about the retirement schedule. The LEGO Group don’t usually tell the public when the planned end will be for manufacturing of each set, so we need to turn to other resources. But the information is out there!
The Power of Nostalgia
Remember how much you loved your childhood LEGO sets? So does every other 30-40 something with disposable income. The research specifically noted that sets produced 20-30 years ago make LEGO fans nostalgic, and prices for them go through the roof. It’s like investing in bottled childhood memories.
The nostalgia factor is driven higher by the fact that many LEGO sets are now being made that depict scenes, characters and stories that bring added nostalgia with them. Recent partnerships with SEGA for Sonic the Hedgehog LEGO sets, or creations such as the Atari and Nintendo Entertainment System, show just how heavily The LEGO Group leans on the power of nostalgia with their designs and releases.
Collector Demand
The global community of Adult Fans of LEGO (AFOLs) represents a collector ecosystem unlike any other in the investment world. These dedicated enthusiasts approach LEGO with a blend of childhood nostalgia and sophisticated collecting psychology, creating a market driven by both emotional attachment and rational valuation.
Unlike typical investors who make decisions based solely on financial metrics, AFOLs often pursue sets that complete thematic collections, represent significant personal memories, or showcase extraordinary design excellence. This peculiar mix of passion and collectorship creates a remarkably stable demand foundation—even when traditional investments falter during economic downturns, the emotional connection to LEGO keeps this collector market resilient.
What truly separates LEGO investing from conventional assets is the demographic transformation of its collector base.
These aren’t casual fans making impulsive purchases—they’re dedicated collectors who meticulously research set histories, track production numbers, and monitor market trends with a devotion that rivals Wall Street analysts. The sustained demand for rare retired sets from passionate collectors can drive prices to extraordinary heights, creating lucrative opportunities for the informed investor who anticipated this demand curve years in advance.
The Secondary Market Ecosystem
Since The LEGO Group ends the manufacturing of most LEGO sets after a few years, there is a vibrant after-market for retired sets. The demand for those sets remains, and is often driven higher by new releases that tie in with old unavailable sets, causing floods of fans to head to eBay to nab the one that they missed and finish their collection.
Sites like eBay, Amazon, and BrickLink have transformed what was once a niche hobby into a global marketplace. This robust ecosystem allows for transparent price discovery that would make Wall Street jealous.
New vs. Used Sets
I can’t stress this enough – if you’re investing, keep those boxes sealed! While used sets can hold value (especially rare ones), the real money is in new, unopened sets in mint condition. That means resisting the urge to rip open the box and build it yourself, no matter how tempting.
The Most Lucrative LEGO Sets for Investment
Not all LEGO sets are created equal when it comes to investment potential. The study pointed to some clear winners, including the iconic Star Wars vehicles like the Millennium Falcon, Death Star II, and Imperial Star Destroyer, as well as architectural masterpieces like the Taj Mahal.
But what makes these particular sets investment gold mines? Several factors:
- Popular Themes: Star Wars isn’t just a movie franchise; it’s a cultural phenomenon with generations of dedicated fans. Sets based on enduring franchises like this have built-in demand.
- Iconic Designs: The more recognizable the build, the more desirable it becomes. The Millennium Falcon isn’t just any spaceship – it’s THE spaceship for millions of fans.
- Rarity: Limited editions or sets with short production runs become highly coveted collectors’ items almost overnight.
- Complexity and Size: Interestingly, the study found that prices of small and very large sets grow faster than medium-sized sets. The small sets often contain unique minifigures or parts that collectors crave, while the massive sets appeal to serious adult collectors looking for display pieces.
Want to know which current sets might be tomorrow’s gold mines? I’ll share some insights on that shortly.
Considerations for Aspiring LEGO Investors
Before you empty your kids’ college fund to buy LEGO sets, there are some important considerations to keep in mind.
The Need for Knowledge
As the study notes, one must be a real LEGO fan to sort out the market nuances and see the investment potential in a particular set. This isn’t a market where you can just blindly buy anything with the LEGO logo and expect returns. You need to understand the themes, the production cycles, and the collector community.
Take some time to learn the ropes before diving in. The Brick Bucks YouTube channel is a great starting point for those who need a quick introduction to this exciting world.
Long-Term Perspective
LEGO investing isn’t for the impatient. The study indicated that LEGO sets typically yield returns within two to three years of being discontinued. The most valuable sets often take 5-10 years to reach their peak value. Can you wait that long to see your returns?
Transaction Costs
When calculating potential profits, don’t forget about the costs of selling. eBay and other platforms charge listing and final value fees that can eat into your margins. Storage, shipping materials, and insurance are additional expenses to consider.
Storage and Condition
Those cardboard boxes aren’t just packaging – they’re a crucial part of the investment. LEGO sets need to be stored in climate-controlled environments to prevent damage. Even minor box wear can significantly reduce value. Do you have the space to properly store your LEGO investments?
The Academic Rigor Behind LEGO’s Investment Potential
Let’s be clear – this isn’t just speculation from LEGO enthusiasts. The research by Victoria Dobrynskaya and Julia Kishilova at the Higher School of Economics in Russia brings serious academic credentials to the table.
Their research methodology included:
- Data Collection: They gathered price data for 2,322 LEGO sets released between 1987 and 2015 from sources like Brickpicker.com and The Ultimate Guide to Collectible LEGO Sets.
- Quantitative Analysis: They calculated average yearly nominal returns and analyzed the relationship between LEGO returns and various market risk factors.
- Focus on New Sets: By specifically examining new, unopened sets, they isolated the pure collectible value.
Their conclusion that LEGO investments outperform large stocks, bonds, gold, and alternative investments with an average return of at least 11% isn’t just hype – it’s backed by statistical analysis. The positive multifactor alpha of 4%-5% suggests that LEGO generates returns beyond what standard market risk factors would predict. And with a Sharpe ratio of 0.4, LEGO offers favorable risk-adjusted returns.
But again…in the real world, expected returns can often be far greater, by picking the best sets (the 11% is the overall avg.), buying them at better discounts, and selling them for higher prices than average. All of which are skillsets that LEGO investors can master.
LEGO: More Than Just a Toy
The investment potential of LEGO is deeply rooted in its transcendence beyond being merely a children’s toy.
For many people, LEGO has become a staple hobby in their lives. It brings nostalgia, creativity, connection with kids and family members, and a host of other positive feelings.
What makes these plastic bricks so enduringly valuable?
- Adult Audience: LEGO has cultivated a massive adult following. These aren’t just parents buying for their kids – these are grown adults purchasing sets for themselves, driven by nostalgia and appreciation for the craftsmanship.
- Architectural Quality: Christian Bailey, a principal at ODA Architecture and LEGO enthusiast, notes the architectural quality of LEGO sets, comparing them to professional building blocks. The attention to detail in sets like the Architecture series appeals to design professionals and enthusiasts alike.
- Creative Outlet: In our increasingly digital world, there’s something deeply satisfying about building something tangible with your hands. LEGO provides this creative release for people of all ages.
- Emotional Asset: As the researchers highlighted, collectible toys like LEGO can be considered “emotional assets” or “investments of passion.” They serve dual purposes – potential financial returns and personal enjoyment. There’s a certain joy in owning a perfect miniature Millennium Falcon that a stock certificate simply can’t match.
This emotional connection creates a floor for LEGO values that many other investments lack. Even if the investment potential disappeared tomorrow, there would still be people who want these sets simply because they love them.
Conclusion: Building Wealth With LEGO Investing
When I first started researching this topic, I was skeptical. LEGO as a serious investment? It seemed far-fetched. But the data doesn’t lie – LEGO is not merely child’s play but a legitimate and potentially high-performing alternative investment.
The historical returns, resilience to market volatility, diversification benefits, and passionate collector base all contribute to LEGO’s surprising investment prowess. While I’m not suggesting you liquidate your 401(k) to buy Star Wars sets, the evidence suggests that smart investors might want to allocate a portion of their portfolio to carefully selected LEGO investments.
Success in this space isn’t automatic – it requires knowledge, patience, and strategic thinking. But for those willing to put in the effort, investing in LEGO could indeed be a better way to build wealth, one brick at a time.
Ready to Start Building Your LEGO Fortune?
If you’re intrigued by the investment potential of LEGO but don’t know where to start, you’re not alone. That’s exactly why I wrote “Winning Set Secrets“. This comprehensive book takes you from LEGO novice to savvy investor with step-by-step strategies for identifying high-potential sets, timing your purchases perfectly, and maximizing your returns.
Inside, you’ll discover:
- The 16 telltale signs a current LEGO set will appreciate rapidly.
- My proprietary “theme prediction” formula for spotting the best LEGO themes to narrow down to.
- The easiest ways to find the diamond in the rough.
- Real case studies of sets that I have invested in that multiplied my money easily and quickly.
Don’t miss out on this alternative investment opportunity that’s hiding in plain sight. Go here and grab your copy of Winning Set Secrets today, to start building your LEGO investing empire.
