Investing in LEGO Trains

[legotrader]

I would just like to share an article on the value of LEGO trains, mostly 9V trains. It's amazing on how much these sets can go for today if you can find one in good condition.

http://www.brickpicker.com/index.php/blog/view/lego_trains_an_on_track_investment_or_an_investment_derailment

[fred67]

It's true... it's not just trains, though. In fact, it's most "detailed" sets; the "realistic" LEGO trains appreciate in value - the ugly ones (like the Railway Express) are only valuable for the parts - 9v track, motor, regulator...

Detailed sets, like the modular buildings, also appreciate quickly in value - more than the trains have; and so have most (but not all) of the UCS Star Wars sets.

Still, it can make sense to get an extra if you have the spare change. I've become the inadvertent owner of some very expensive sets as I bought them at MSRP (or even on clearance), only to build them years later when they are worth several times what I paid. It's hard to bust that seal in that case, but I didn't buy it to sell (note my "tag" under my icon, which I got for building a Cafe Corner despite the value being over four times what I paid).

But if I knew then... I might very well have gotten several. Hindsight is 20/20.

Edited April 18, 2012 by fred67

[legotrader]

I bought 2 10188 Death Stars. My goal was to do some great MOC space station. 2 years later that still hasn't happened. One I opened 1.5 years ago to experience that set and loved building it. The other one is still sitting in the corner of a closet. It hasn't been retired yet, but one day it will. Unless I finally get that spark of creativity to build that space station, that one will stay sealed. I have been looking through eBay and Bricklink looking for good buys on the trains lately though.

[1974]

I could never buy a set for investment. I'd hide it under the sofa for three days and then I'd kill to open it, haha

He should have put some 'new, sealed' 7740/50/60s on that list. Sure, you'd need to hold on to them for 30 years but the return wouldn't be that bad I think

I do regret no buying a second 10210 Imperial Flagship as it has gone 2,5x the the price I paid just a few months ago .. but then I'd would probbably have opened/build that too

Nah, better to buy Apple shares or whatever

[legotrader]

Nah, better to buy Apple shares or whatever

I understand your point, believe me I do. But at this time, I am not sure if even something as solid as Apple is a good thing to invest in. Most of the people have made their money in it at this point. Sure it can split, etc. But in general it's too expensive for most to even buy 1 share. And at $560 a share, how much of a return can the average person make on it.

Hopefully one day I can save/earn enough to have fun with both. Right now, I will have fun with LEGO :)

[1974]

Should have bought Apple shares 5 years ago, sure. Gold seem to be the big thing now. But this is not a topic for EB

I'm not really much into this whole 'LEGO as an investement' thing (and I'm quite sure, you wont be able get a serious loan in the bank to buy bricks anyway)

Actually, I'm a bit saddened by it. It means it'll be quite hard for LEGO enthusiast to buy old sets for decent money. But such is life

[fyrmedhatt]

I'm not really much into this whole 'LEGO as an investement' thing (and I'm quite sure, you wont be able get a serious loan in the bank to buy bricks anyway)

Actually, I'm a bit saddened by it. It means it'll be quite hard for LEGO enthusiast to buy old sets for decent money. But such is life

The current Lego investment craze is actually a good thing for your ability to be able to buy retired sets, as there are far more of these sets entering the marketplace than ever before. While I personally don't believe the Lego market will see a bubble like the ones seen with action figures and trading cards, the increased supply of sets means that giant price increases like those seen with the Santa Fe train is less likely.

Lego trains should be a fairly good investment, at least the AFOL oriented sets. The train market is dominated by AFOLs, and most of the train fans seem to be spending significantly in order to build their layouts, and they are likely to pay extra to get one of the relatively few realistic trains Lego has released over the years (think Emerald Night, Santa Fe, BNSF and in the future the Maersk Train).

Another factor to take into consideration when talking about the future potential value of Lego trains, is the overall value of the extras in each set. The train engine, receiver, battery boxes, controllers, not to mention track are significant components of the worth of a train set, and if Lego continues down the path of making Lego trains more and more simplistic, the value of those parts will skyrocket like the 12v and 9v systems parts have already done.

[LegoSjaak]

I think that investing in Lego would be even more profitable if you split sets and sell them separately! In this way you can make a quicker profit. If you would keep a set for 5 to 10 years, you have to think of the interest you would have gotten if you would have put the money on the bank... If you split sets and sell them within a month with 10% profit, than the actual profit would be 120% a year... I would only do it if you like the sets.... not for earning money on it over 10 years... I collected old dutch silver coins from over Eur 500,- a piece....but if people stop collecting them the coming years... prices will go down... so nothing is sure, also for Legosets which seem to be populat within 10 to 20 years... Our children might have different interest in 2032....

Greetz, LegoSjaak

[fred67]

I think that investing in Lego would be even more profitable if you split sets and sell them separately! ...

Greetz, LegoSjaak

It's like any kind of investing... in this case, the value of a LEGO set almost always goes up unless the set was a complete failure, so you've already got that over practically any other kind of investing, but it's still unknown for any particular set until it's been retired.

The difference between what you suggest and keeping sets whole is this: you're doing a job and making a profit, you're not really investing - your providing a service. If I had nothing else to do, it might be worth it, but it's work - not investment. Secondly, you can often beat 120% profit in a year. If you've a feeling a set's life is limited, and it was popular, you can gain 100% profit sometimes within a month or two.... look at 1974's post about the Imperial Flagship... 2.5 times the price (150% profit) in just a few months... and no work, just investing.

The same thing happened to me with Cafe Corner. I bought it and Green Grocer as my first two modular sets only weeks before Cafe Corner was gone off the shelves. Imagine my surprise when only a month later is was selling for double what I paid. When I finally built it, it was selling for well over 5 times what I paid for it. I'm heartened by the fact that the current price used is at that level now.

Overall, though, LEGO is good for some money for the hobby, but it's obviously not like investing in stocks/bonds/funds/real estate... there's practical limitations, after all; there's no way I could store enough LEGO in my house to pay for my child's college education. It's good for a few extra bucks to soften the blow of being part of an expensive hobby, although I normally buy to build, and I only ever buy sets I personally enjoy. I have a huge collection of unopened sets only because I don't have the room to display them, but I don't want to miss out (or end up paying extra), so I buy and stick in a closet. Then I realize the sets I finally build are worth many times what I paid. Sometimes it's a hard pill to swallow.