The Best Investment on Earth: LEGO
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The Best Investment on Earth: LEGO
An introduction to a market that many don't even know exists.
This post is brought to you by me.
Collecting profit on your LEGO investments isn’t as easy as it sounds.
You need an active Amazon Seller account, approval to sell the LEGO brand, and an understanding of how to send your LEGO to Amazon when the time to sell comes.
You can put that off until the last minute or you can get my LEGO Investing Mastery guide.
In just 90 minutes, you will learn how to get everything set up and which costly mistakes to avoid as a beginner.
Get access to it here.
It’s time to introduce one of the greatest investment opportunities on planet earth.
Before we do, let’s revisit:
What the point of investing is
What type of investments you can make
What is considered “normal” when it comes to investment performance
Investing is the simple act of attempting to appreciate or preserve your capital.
There are two types of investing:
Active (It takes effort alongside the investment i.e. starting a business)
Passive (No work required i.e. stocks/bonds/Pokémon cards)
Long time readers will know that I only recommend “passive” investing only once you have exhausted all resources on active investments.
For me, this was when I was working 12 hours every day, 7 days per week AND had money sitting there that I didn’t have the time to use.
The reason? Active investments perform better on average.
The book business mentioned in this post below is a perfect example of an active investment:
The reality is: No passive investment can provide a 100-200%+ return on capital in just a couple of months like an e-commerce business can.
Historically, passive investment returns of 5-10% annually are considered great. Anything above that is considered incredible.
Investing in LEGO (the right way) allows you to capitalize on the best of both active and passive investing.
Allow me to explain.
LEGO has the same unique characteristic that sealed trading cards have.
Once a LEGO set is no longer manufactured (we call this “retirement”), supply becomes capped.
As they are unsealed, the supply decreases over time. If demand stays the same, this results in an increase in value for the LEGO set.
The aforementioned demand assumption is a safe one. People love LEGO. Kids love them and adults collect them.
It’s been this way for decades.
That’s not the whole story though.
When LEGO sets retire, a funny thing happens. ~95% of the time, all retailers run out of stock right around the retirement date.
It is then up to third parties (like you and I) to supply the market with inventory, which often results in what I call the “retirement pop”.
The price of many LEGO sets pop in value by 20-30% the moment they retire.
From there, it is a rapid climb in value for 6-18 months before slowing down and acting like a traditional asset.
By capitalizing on this retirement pop and holding for roughly 12 months it is possible to achieve returns like no other market can.
It is not uncommon to see a LEGO set return upwards of 100% ROI in a single year.
Here is the three step process to my personal LEGO investing strategy:
Buy LEGO sets at discounted prices in the second half of the year (20% OFF is easy to find)
Hold for 12-18 months and then sell on Amazon
You can turn $10,000 into $20,000-40,000 in a single year doing this, so long as you pick the right LEGO sets.
I’m not the first person to realize this, nor are these kind of returns “guaranteed”.
However, this is just what has happened every year since the ability to track historical Amazon data became possible.
In fact, I document the results of my personal LEGO investment portfolio every month inside this newsletter.
If you’d like to:
Follow along with my portfolio
Get alerts when I add new LEGO sets to my portfolio
Get access to market data that no one else publishes
Click the button below to become a paid subscriber:
Is it possible that we enter a recession and consumer spending slows down so much that this isn’t as profitable?
Yes.
However, that didn’t even happen during the 2008-2009 recession:
LEGO rose as real estate plummeted and this graph doesn’t even account for the retirement pop.
Nothing in life is guaranteed, including LEGO investment returns.
That said, the greatest risk of all is never taking any risk.
It just so happens that LEGO has the best risk/reward profile I’ve ever seen.
You can take advantage of that or ignore it. The choice is yours.
When you are ready, there are a few additional ways I can help you beyond being a paid member of this newsletter:
If you don’t have capital to play with, I recommend starting here:
Textbook Flipping Mastery - My in-depth guide on how to start a high-margin capital producing Amazon business
If you do have capital, I recommend starting here:
LEGO Investing Mastery - My in-depth guide on how to start a long-term “buy, hold, and sell” LEGO investing business
If you want to tackle both at the same time and get the most value possible, I recommend starting here:
The Conference Room - My private mentorship community that includes the two guides above, for free. Pay once and stay a member for life.
This post is not financial or investment advice.
It is written for entertainment purposes only by a bum who gave up his job as a prestigious Aerospace Engineer to talk about parking money in sealed boxes of plastic.