He was a famous baseball player in the 1980s. And he’s why I got my high school best friend out of the baseball card bubble.
In the early 1990s buying and selling baseball cards was a popular way to try and make money.
My friend who I will call Trevor decided he wanted to get into that business. At the time baseball was my first love over football. And so Trevor would continuously ask for my opinion about baseball cards.
This was well before the Internet and online forums. I kept trying to explain to him that just because I knew who was a good player or a bad player had nothing to do with their value as a baseball card.
And it finally came to a breaking point when Trevor called me late one night.
And asked about Darrell Strawberry. He had no idea who he was. That was when I told my friend to quit asking me about baseball cards.
Thus when Nathan explained to me the idea of Lego “investing” I was skeptical. But he was insistent. So I did more research.
And while I agree there is a significant community of people who think of buying Lego as investing, I think they are confusing investing with collecting.
I’m going to explain the difference.
More importantly, I’m going to explain why you should only collect Legos and not view them as an investment vehicle.
A quick disclaimer – for any financial advice, please talk to a certified professional.
AN INVESTMENT MEANS YOU EXPECT TO GET MORE MONEY BACK THAN YOU PUT IN
An investment is a financial term that means you spend money on something that you expect to get a financial return from.
This could be in the form of buying stock in a company. Or developing a new product. Or purchase something that you anticipate appreciating in value.
Traditional investments go into things that we are all familiar with.
These include stocks, real estate, and bonds. You can even invest in cash.
When you invest in these vehicles, you expect that they will increase in value. They increase in value because someone wants to buy them for more money than you paid for them.
An example is buying an empty lot, and later a developer wants to buy that lot from you to build an apartment building.
Or you could get dividends. A dividend is where a company pays you extra money based on the number of stocks you own.
For example, a company can say this quarter because we have done so well that we will give out a nickel dividend on our shares. And if you own 1000 shares of that company then you would get an extra $50.
This is how you can earn money by owning stocks in a company for a long time without having to sell your shares.
There are also ways to invest in other items that are called alternative investment.
AVOID THE SIREN SONG OF ALTERNATIVE INVESTING
The hot item for alternative investing in 2018 is blockchain based coins.
The longest and best-known alternative investment vehicle has been art investing.
But according to Wikipedia art investments have only appreciated by a tiny amount on an annual basis.
The average is less than 1%. Even the worst checking account on an annual basis earns more money.
If you have looked at Legos as an investment, then you are treating them as an alternative investment vehicle. And as you can see with art there is no guarantee this will return more money than traditional investments.
Instead, I encourage you to think of Legos as a collectible, not an investment.
COLLECT THINGS YOU ENJOY
Collecting means to acquire items for enjoyment. It’s a hobby or leisure pursuit. If you’re not able to control or curate your collecting, it can become a problem called hoarding.
But most people only collect things for fun. And occasionally sell their collections as well. Usually to fund the ability to purchase other items they want to collect.
I have collected various things over the years.
I started with baseball cards.
But unlike my friend Trevor, I only collected for fun. I had a small record collection. And I have maintained a small PEZ dispenser collection that I keep on my home office desk.
Thanks to Nathan I’ve finally gotten back into collecting Legos.
I enjoy collecting Legos because it gives me something to focus on besides work.
Otherwise, I tend to become a workaholic and only focus on my job 24 hours a day. And while that focus allowed me to grow a couple of companies, is not something I enjoy doing anymore.
Instead I a love Legos. Because it’s a hobby that has so many possibilities associated with it. In other parts of our guide, we’ll dive into those options.
YOU CAN START COLLECTING LEGO TODAY FOR THE PRICE OF LUNCH
You can collect just the minifigures. These figures are more detailed and have more variety than what I had access to when I was growing up in the 1980s.
You can collect full sets.
If you keep them sealed, they will have the most value on the resale market.
But there is more enjoyment with putting them together.
I enjoy the focus of putting the sets together. My wife and I even work together on them.
You can also create your own designs and artwork with the bricks. You are not limited to just what Lego provides you. And if you want you can even submit your ideas to Lego to turn into a set that other people can buy.
Finally, you can use Lego to create your own animated movies. This is what I love to do because I have always wanted to create my own movie since I was a little kid.
The value of any collection is dependent upon the size of the secondary market.
A secondary market is what we call the people who are looking to buy something for resale. For example, you buy a Lego set at the store, and then you want to sell it to somebody else. The people who you are trying to sell to is the secondary market.
Because of the Internet, secondary markets for collectibles has become much bigger than it was before. In fact, the most famous secondary market eBay was launched on the idea of being able to buy and sell PEZ dispensers. The way I heard it the founder of eBay was a PEZ collector and wanted an easy way to participate with other collectors on the Internet.
The same is true for Lego. Except you’re not limited to just eBay these days. There are now Lego specific secondary markets where you can buy bricks, minifigure, and even entire sets.
Here is a list of some of those sites:
- Facebook Marketplace
- Brick Traders Facebook Group
- Lego Investing Facebook Group
THE LEGO COLLECTORS STARTERS GUIDE
Collecting Legos is a fun hobby. But it can be overwhelming trying to figure out how to get started. In particular, if you’re an adult fan of Lego and you haven’t kept up with the brand since you were a kid.
CHOOSE A THEME
Before you get started, determine the theme you want to use for your collection. For example, are you going to focus on collecting entire sets? Or do you just want to have an extensive collection of minifigures. Or are do you want to be avant-garde and collect my own creations (MOC)?
After you have decided the general type of Lego that you want to collect, then you need to decide if you want to focus on a particular line are not. Do you only want Star Wars sets? Or only Batman? Or only the architecture sets? Or only the creator sets? There is quite a bit of variety with Lego in modern times. It’s not just simple bricks and castles. I know people who only want to collect the castles.
DECIDE HOW YOU WANT TO DISPLAY YOUR COLLECTION
There is no point in building up a collection of anything if you’re not going to display it. The same is true for Lego. If you want to focus on only collecting sealed boxes, then you’ll want to make sure they are displayed in a way that shows off the box. While still protecting it from damage. This could be simple shelves, but I would prefer to have them behind glass.
If you are collecting minifigures, then you should look at minifigure specific display cases. While Lego makes some, I would encourage you to look at third-party manufacturers. There are multiple ways you can display the minifigure. And go beyond looking at your usual stores like Amazon or Walmart. And check out the handmade items places like Etsy. I would even check out your local craft fairs and see if there are woodworkers who can build you something custom for yourself.
If you are into collecting the city sets, I’m a big fan of creating dioramas. This way it’s not just putting the sets on a shelf. But you can position the minifigure and vehicles in a way that can tell a story. This means it’s more interesting to both yourself and your visitors.
KEEP YOUR DISPLAYS CLEAN AND WELL-LIT
Because Legos are three-dimensional, you will want to make sure your displays are well lit. And can be seen from all sides. Check out LED rope lights and small desk lamps as ways to get lights around your collection without taking up too much room.
You also want to make sure you clean them regularly. Look into air blowers. Speciality tools that are created for cleaning delicate electronics. Don’t use harsh chemicals like bleach and keep away from sunlight. As these can discolor and even dissolve your bricks.
JOIN THE COMMUNITY
There are always new things coming out with Lego. In particular, the start of any new calendar year is full of anticipation as word comes out from various toy fairs. It can seem like it’s a full-time job just trying to keep up with what’s new in Lego.
Here are our favorite places to keep informed of what’s happening with Lego:
Besides using these sites and groups to keep informed, join the community. It’s fun to share building tips. And congratulate people on their builds.
THE LEGO BUBBLE WILL POP
Whenever an investment vehicle whether it stocks or bonds or blockchain or Lego rises in value over a period of time it will eventually reach a point when it comes crashing down.
If the value rises to the point that does not seem to match a logical valuation, then we call that a bubble.
The most famous historical bubble was the Dutch tulip bubble in the 1600s.
And many people involved with Lego believe we are in a bubble for Lego collectible prices.
I agree with this, in particular, if you think Lego is more valuable than gold.
And as we talked about with art collecting, a secondary or alternative form of investing doesn’t have a track record that beats traditional investing.
Thus I believe Lego prices could collapse at any time.
That being said I still encourage people to become Lego collectors because it’s such a fun hobby. And you can enjoy it at any age.
THE DALLAS SHARED BIKE BUBBLE IS WHY YOU NEED TO AVOID LEGO INVESTING
Financial bubbles are hard to predict. And are even harder to predict when they will pop.
As a kid, I was surprised when baseball cards became suddenly popular. The same thing for comic books. And as a young adult, I was utterly shocked when ordinary people went crazy over Beanie Babies.
Right now in Dallas, in early 2018, there is a bubble being built around bike sharing companies.
For some reason every day it seems a new bike sharing company appears here.
And were being told that Dallas has more bikes for sharing than any other city in the United States. Despite being the fact that Dallas is one of the least bike-friendly cities in the country. Not only is it difficult and downright dangerous to bike around most of our towns, but it’s also too hot to bicycle for most of the year.
And I expect soon that these bicycles will start disappearing. First, there isn’t as large of a market as the city size indicates. Dallas metroplex is the size of some states. And like I said, not bike friendly in the Dallas city center.
Plus city officials are starting to crack down because the bikes are often discarded for pranks or junk.
LEARN THE LESSONS OF BASEBALL CARDS, STAMPS, AND HUMMEL FIGURINES
I was talking with my friend Peter about Lego collecting. And he reminded me that eventually, all collectibles go through a cycle.
As kids, we had baseball cards. And I mentioned that the 1990s they were hot items to sell. Little pieces of cardboard that were going for hundreds of dollars in resell value from an original price of a couple of dollars.
For decades stamps were popular for collecting. And now if your grandparents have a stamp collection and you have to sell it off after they pass away you’ll be lucky to get a few dollars for them.
My mother loves to collect Hummel figurines. These little porcelain statues from Germany. And they were popular for many years. But now have fallen out of style.
So keep this in mind when collecting Legos. While it is possible that certain sets are certain minifigures might become super valuable most likely, they will only ever be able to be resold for pennies on the dollar.
And instead, enjoy them for their art and playability.
MANUFACTURERS CAN TOY WITH COLLECTORS
I read this story about someone selling a collector card from a 1930s candy company.
Apparently, the candy company put cards of presidents in the box of candies. Wanting you to collect them all. Except they didn’t print all of the cards equally. McKinley was intentionally rare. To get you to buy more candy trying to get them all.
It reminds me of as a kid, I tried to collect all of the dinosaurs from Fruity Pebbles. There was one - a T-Rex I think, that I was missing. I now believe it was intentionally rare.
Though I’m still sore at my dad, for buying the Costco sized box which didn’t have any dinosaurs.
I like Fruity Pebbles ok - but I really wanted to complete the collection. That set me back like 4 boxes.
Anyway, keep that in mind whenever you are trying to complete a collection that’s being offered with something else. They want you to buy more cereal, candy or Olvatine.
BUT IT MIGHT NOT BE A BUBBLE
On the other hand, it might not be a bubble after all.
As a business Lego, cannot keep manufacturer all of the sets all of the time.
This is because it costs money to make all of those sets. And to store all of those sets. And in the case of sets or minifigures based on movies and comic book sets, the license to create those also cost money.
So they naturally stop making certain sets.
And Lego doesn’t currently seem interested in pumping up the secondary market.
START COLLECTING LEGO TODAY
Throughout this article, you’ve been learning about collecting Lego.
All of us would like more money. And to feel safe about your retirement. Or to make sure the kids can go to college, there are better ways than investing in Lego.
On the other hand, becoming a Lego collector provides years of enjoyment. You can’t be stressing over the boss at work while trying to put together a set.
You can feel pride when you finish setting up your Lego city diorama in the home office.
And don’t forget - Lego will outlast your phone.