Lets be Realistic People

[MartinP]

I'm pretty new myself.

I don't think Lego will make me rich as I see certain people claim here (if I read between the curiosity Rovers thread lines)

I do believe investing in Lego is more safe than buying stocks and it will bring in more than if I leave my money on the bank (3% growth?)

Am I being realistic if I expect a ROI of about 20-25%/year on my investment or is that too optimistic?

I would say that a ROI of 20-25% a year is realistic. I usually aim for 35-40% because I buy a lot of bulk lots off CL, and sometimes I find hidden gems, which boosts my overall ROI. When I don't have many bulk lots to sell off, my ROI is usually around 30%. 20-25% is realistic. If you do your research and are smart about your investments, you can increase the ROI.

[No More Monkeys]

I'm pretty new myself.

I don't think Lego will make me rich as I see certain people claim here (if I read between the curiosity Rovers thread lines)

I do believe investing in Lego is more safe than buying stocks and it will bring in more than if I leave my money on the bank (3% growth?)

Am I being realistic if I expect a ROI of about 20-25%/year on my investment or is that too optimistic?

Make sure you are factoring in sales cost. It is very easy to fall into trap of thinking - oh, my brickfolio shows I am up 30%! whoo-hoo! But that's not ROI, it is just hypothetical gross value

[sadowsk1]

Nice post.  I guess we'll see who is still here and posting as time goes on or just packs it up.  I don't mind the influx of new investors.  With the way it looks to me with so many extra investors most sets can float at their msrp plus some shipping for much longer after they retire and I imagine this will be the case for a while.  Helps me with my buyers remorse of not buying enough when a deal is on (or more likely that funding isn't available).  Maybe there won't be a bubble that ever bursts as far as Lego goes.  I think people are too stubborn and refuse any less than to break even unless they are desperate.

[mudcatsfan]

Yes you would want the herd thinned - but thats not the spirit of this site. You sacrifice a little profitability and leg up in competition and gain invaluable information.

you're right that there's power in numbers, and crowd sourcing the hunt provides us all with benefits. There's also a tipping point when there are too many animals at the same watering hole. I wonder if we'll recognize that moment.

I've also wondered if there isn't something inherently altruistic about adults into lego.

I've seen other hobby sites and other investing communities, and not all of them look out for each other.

Perhaps it's the space limitation of lego that prevents us from hoarding our info

Either way, I do enjoy the community and will try to keep contributing to the discussion.

[iahawks550]

It is incredibly easy to clear 20% in this game within 12 months if you are selective with your purchases and when you buy, buy in bulk. More than 20%, it will happen if you know what you are doing.

[mudcatsfan]

Make sure you are factoring in sales cost. It is very easy to fall into trap of thinking - oh, my brickfolio shows I am up 30%! whoo-hoo! But that's not ROI, it is just hypothetical gross value

 

I think that sales cost is the single biggest factor in ROI.

 

Being efficient with your shipping material & Methods makes a HUGE difference in your ROI.

 

Do you pick up free boxes from Walmart when they're unpacking stuff, and save them in your garage for when you need them, order them in bulk from Amazon pack your items as soon as they're bought so they're ready to ship out, or do you run out to UPS and pay 6.99 for a perfectly sized box because you only have 2 business days to ship it out without getting dinged?

 

Do you ship all your items to Amazon for ease of shipping, but pay much higher fees and end up paying rent if they sit too long?

 

Do you become a craigs list seller, avoid fees entirely but have to buy a gun to keep from getting lego-mugged?

 

So many options. So many chances to inflate or destroy your hypothetical 20-30% ROI.

[biniou]

 

Am I being realistic if I expect a ROI of about 20-25%/year on my investment or is that too optimistic?

 

It depends of what you have in your brickfolio (good choices or not, and some luck too), and how patient you are to keep your sets. But yes overall 20%/year is what you can expect. Some sets will have 10%, some 40%, and some... -10%

That's why you have to have many different sets, overall it's ok if you make wise choices.

[Neosphinx]

Make sure you are factoring in sales cost. It is very easy to fall into trap of thinking - oh, my brickfolio shows I am up 30%! whoo-hoo! But that's not ROI, it is just hypothetical gross value

 

Sales cost is pretty low. Packaging material is recuperated from deliveries or I get from work. For now, I only use local secondhand sites to sell Lego, but indeed, I haven't thought of the extra price to sell via ebay or bricklink. I will see when the time comes that, when my items are "ok" to sell. I don't spend too much attention on the brickfolio as the CAGR is not so precise to deduct a margin for ROI. I have access database where I keep how much I paid against the current value and it is about 25% less paid/worth so I assumed that my ROI would be close around that amount in a year.

[iahawks550]

If you wanted to do this as a totally brain-dead person, you would target any licensed sets from $40-$70 at 40-50% off, and buy everything you could. My guess is you would have a minimum 25% return on your money within 6 months, really easily.

[DoNotInsertIntoMouth]

you're right that there's power in numbers, and crowd sourcing the hunt provides us all with benefits. There's also a tipping point when there are too many animals at the same watering hole. I wonder if we'll recognize that moment.

I've also wondered if there isn't something inherently altruistic about adults into lego.

I've seen other hobby sites and other investing communities, and not all of them look out for each other.

Perhaps it's the space limitation of lego that prevents us from hoarding our info

Either way, I do enjoy the community and will try to keep contributing to the discussion.

 

I understand keeping things like a script that checks stock status, or something like that being kept secret. but the spirit of this community is free information.

 

Do I want to tell everyone everything I know? No - and I shouldn't. But I will. because without this site, I wouldn't have anything I know.

[Darth_Raichu]

I posted the following in the other "advice" thread.  These are all you need in this game.  In all honesty though, people are free to heed (or not) any advice, as long as they accept the consequences (good or bad)

 

Two pieces of advice as I am feeling pretty generous today 
- DO NOT be a sheep / lemming and follow others blindly.
- DO your own research.

 

[marcandre]

There is more than enough info on this website to invest in lego successfully. I don't feel bad for anyone that gets in over their head. 

[No More Monkeys]

If you wanted to do this as a totally brain-dead person, you would target any licensed sets from $40-$70 at 40-50% off, and buy everything you could. My guess is you would have a minimum 25% return on your money within 6 months, really easily.

Prince of Persia was licensed...

[Darth_Raichu]

If you wanted to do this as a totally brain-dead person, you would target any licensed sets from $40-$70 at 40-50% off, and buy everything you could. My guess is you would have a minimum 25% return on your money within 6 months, really easily.

Prince of Persia was licensed...

Don't forget Toy Story, Cars, and Pirates of the Caribbean (the ships were $100 and $120, so they were outside the stated price range)

Just keeping it real Peace out :sungum:

[Neosphinx]

It depends of what you have in your brickfolio (good choices or not, and some luck too), and how patient you are to keep your sets. But yes overall 20%/year is what you can expect. Some sets will have 10%, some 40%, and some... -10%

That's why you have to have many different sets, overall it's ok if you make wise choices.

 

I try to differentiate... 10 series, sw large en bp, some exclusive lotr sets, -50% off city but the more exclusive ones, some trains and second hand hp and sw.

[Miami Bomb Squad]

When referring to a set, Don't just type the set #, Add the Name of the set.

Crotchety Old Man
 

[Migration]

When referring to a set, Don't just type the set #, Add the Name of the set.

Crotchety Old Man

And don't make up your own abbreviations.

Crotchety Old Man II

Sent from my iPhone using Brickpickeraaaaaaaswssssswssa

[glenbart]

I am at 60% gains since starting to invest at the beginning of last year. There is some levelling out but 60% is still the ball park figures. I have spiderman polybags at

[gregpj]

And don't make up your own abbreviations.

Crotchety Old Man II

Sent from my iPhone using Brickpickeraaaaaaaswssssswssa

 

Haha, I was thinking this exact same thing. Seriously, people can't be that lazy can they?

 

I'm one of the guys at work who complains when the microwave is filthy or the sink (next to the empty dishwasher) is full of dirty dishes.

 

COM III  

[asharerin]

I am at 60% gains since starting to invest at the beginning of last year. There is some levelling out but 60% is still the ball park figures. I have spiderman polybags at

[minicoopers11]

I enjoyed this post. I really do need to build a set...haven't in too long! Time to crack open a Fire Brigade?!

[justafrog]

Until you sell your gain is zero. Unless you work for free, or know people who are willing to work for you for free, then the cost of labor in listing, packing and doing customer service will knock that 60% down considerably (may even put you in the negative). 

 

^This.

 

Many inept sellers never realize they work (and sometimes work very hard) for below minimum wage and or no wage at all.

 

If a hobby seller goes into this knowing that fact and does it anyway (because they're willing to give over some of their hobby hours to selling some LEGO and maybe help to defray the cost of some other LEGO they can use), it's not a bad deal for them.

 

But for a true investor or reseller looking to make actual profit, it can be and often is a VERY bad deal once you factor in time sink and consider what other paid work you could get for that same amount of time. And lets not forget opportunity cost with tied-up capital and space/quality of life cost with storage of inventory.

 

I'm not one to discourage anyone else from making money, and there are definitely ways to make money in LEGO, but self-deception is a costly habit and should be avoided.

 

Looking at two numbers, "I paid $20, someone just sold one for $50, so I've made $30!" is just plain foolishness. Kidding yourself that you have "no costs" because you sell on CL or find your own recycled boxes is just plain foolishness.

 

Cost of Goods Sold. Time. Storage. All Other Expenses. Start adding those up, consider opportunity cost, and determine what you're actually making.

 

Selling LEGO is simple, but it's not easy to make a profit - that takes both work and basic accounting skills.

[No More Monkeys]

When referring to a set, Don't just type the set #, Add the Name of the set.

Crotchety Old Man

 

 

If Jeff implemented Shop At Home autoexpansion, i don't think it would be a big deal to add a feature where if you type <10179> or ##10179, forum back end would convert it to a name of a set with a link to a set in BP database. 

[DoNotInsertIntoMouth]

^This.

 

Many inept sellers never realize they work (and sometimes work very hard) for below minimum wage and or no wage at all.

 

If a hobby seller goes into this knowing that fact and does it anyway (because they're willing to give over some of their hobby hours to selling some LEGO and maybe help to defray the cost of some other LEGO they can use), it's not a bad deal for them.

 

But for a true investor or reseller looking to make actual profit, it can be and often is a VERY bad deal once you factor in time sink and consider what other paid work you could get for that same amount of time. And lets not forget opportunity cost with tied-up capital and space/quality of life cost with storage of inventory.

 

I'm not one to discourage anyone else from making money, and there are definitely ways to make money in LEGO, but self-deception is a costly habit and should be avoided.

 

Looking at two numbers, "I paid $20, someone just sold one for $50, so I've made $30!" is just plain foolishness. Kidding yourself that you have "no costs" because you sell on CL or find your own recycled boxes is just plain foolishness.

 

Cost of Goods Sold. Time. Storage. All Other Expenses. Start adding those up, consider opportunity cost, and determine what you're actually making.

 

Selling LEGO is simple, but it's not easy to make a profit - that takes both work and basic accounting skills.

 

Yup another great one to add. Don't miscalculate profits in front of everyone. Gain is all relative to work you do.

[exciter1]

Yup another great one to add. Don't miscalculate profits in front of everyone. Gain is all relative to work you do.

 

One seller that we all remember fondly never had any cost to selling and buyers were flocking to the Toys R Us parking lot for his goods.