According to new studies, investing in those little plastic bricks we famously call LEGO is a better investment than other financial assets.
If you’ve ever had to justify your toy or LEGO purchases to a partner or loved one, you’re in luck. According to a new study, investing in these plastic bricks yield higher returns than investing in gold.
Why are LEGOs so valuable?
A team of academics led by associate professor Victoria Dobrynskaya of Moscow’s HSE University examined over 2,300 distinct LEGO kits released between 1987 and 2015. Dobrynskaya discovered that the “average returns on LEGO sets are 10-11% annually (higher, if the new set was purchased on the primary market with a discount)… more than what stocks, bonds, gold, and many collectible items, such as stamps or wines, yield.”
It’s worth noting the diversity in those returns, which varied from -50% to a staggering +600% every year. However, the average kit still outperformed many traditional investments. The Millennium Falcon, Death Star II, and Imperial Star Destroyer from Star Wars, the Café on the Corner, and the Taj Mahal were among the most expensive kits.
The study gave three primary causes for the “rapid growth” in price in explaining the phenomena.
For starters, limited edition sets naturally have higher demand—due to a limited quantity. Especially if they are based on a popular brand or film. Second, when those kits are discontinued, the amount of them found on the secondary market is minimal. Many owners refuse to sell their kit, or don’t see much value and throw them away. Finally, because LEGO has such a lengthy history, many fans are now financially independent adults with money to spend, similar to how Pokémon cards are now super expensive.
No two sets are alike
Of course, as lucrative as investing in LEGO may be, Dobrynskaya advises that, as previously said, it is not without risk: “not all sets are equally successful, and one must be a real LEGO fan to sort out the market nuances and see the investment potential in a particular set.”
It is very interesting to see LEGO get the rise in popularity but also in value that we’re witnessing. After all we’ve seen over the past two years, it shouldn’t be a surprise to anyone that old values and traditional ways for financial gain are not as sturdy as we once thought them to be.
In case you missed it, LEGO created a “White Noise” Playlist that we didn’t even know we needed.
Photo via YouTube/Bricksie