Someone posted a link to the USA Today article on the LEGO sub-reddit on reddit.com.

http://www.reddit.com/r/lego/comments/15menn/usa_today_wrote_a_great_story_on_lego_as_an/

There really hasn't been much love for this site on there in the past, but I noticed we were getting a good amount of traffic from there today and wanted to see what was going on.

I noticed a comment that I have seen on this site before and a few other forums.

"This is why we can never find clearance lego or the larger sets on Buy 1 get one. These aholes hoarde all the sets at the expense of our children. Screw them , wont be buying their 129 dollar asking price for Minecraft lol."

I honestly don't care about being called an "ahole", but its the fact that I have read several times that the children are the ones being affected by LEGO collecting and investing. Maybe I am missing something, but does anyone really feel that this is true in anyway? I personally think there is more than enough supply during production periods to cover any LEGO lover to get the set they want. Even the Minecraft set was available on the LEGO shop for the past several days.

Anyhow, I was just blown away again with the fact that I read this type of comment again (maybe have seen it 5 times before this as well). I was glad to see a few other users told them it was a stupid comment, just wondering what anyone else thinks

who the f*** wants to work at McDonald's!?

*bzzt* You want a hot apple pie with that? *bzzt* ;-)

As an example of how much the fees will cut into one's profit, here are some numbers from a recent eBay sale of mine. I bought a LEGO set for $39.99 and listed the set on eBay. The buyer on eBay paid me $64.97. A nice profit of $24.98! Right? No.

After the eBay fees, PayPal fee, USPS postage fee, and cost of the shipping box and the shipping label, I made a profit of just $5.71.

And that $5.71 doesn't take into account my time, as in the time it took me to list, package, and ship the set.

You forgot the IRS's take as well.

You forgot the IRS's take as well.

Good point. I do report earnings from my sales. I'm not sure what the actual percentage is off the top of my head, but let's say 15 percent, which brings the $5.71 down to $4.85.

Well, here is a case for buying larger sets then...A 15% return on investment on a $200 set might be well worth the trouble. Using the same 62.5% growth of the $39.99 set with the $200 set, it would start you off at a price of $325. Take away Ebay/PayPal fees of 12%($39) and shipping fees/boxes($20) for that sized item, leaves you with around $266....and a $66 profit(give or take). $66 per hour looks a lot better than $6 per hour in my book.

This kind of reminds me when I was a trader for the game Team Fortress 2, people whining at a handful amount of traders who strictly traded for profit...

If there is a problem, most people just like to put the blame on someone else.

Good point. I do report earnings from my sales. I'm not sure what the actual percentage is off the top of my head, but let's say 15 percent, which brings the $5.71 down to $4.85.

Do not forget to deduct all of your carrying cost (space is not free, even in your home, utilities, etc, all have a value) from that final $4.85.

Now look at your opportunity loss. What is opportunity loss? It's the cost of being in your investment, that would keep you from other investments (liquidity).

Say an awesome deal comes around on a 10179...but your capital is all tied up waiting for your sets to "mature" in value, let alone waiting to find a buyer at that "mature" price. You have to let the opportunity pass...basically, losing the opportunity to earn a greater return...

I'm intrigued that not one person has not mentioned (in any thread I have read here) their carrying costs, or their opportunity loss. Factor that against your CAGR and once you realize you are perpetually running in the red, you'll probably give this whole LEGO speculating (do not fool yourself, it's not an investment) thing up.

The name of the game is liquidity. Keeping your money moving, not "parking" it indefinitely in hopes that you will get a return down the road (a paltry 5% per year, if you're really, really lucky).

Hope is not an effective business or investment strategy.

Leave the LEGO on the shelves for the kids or the AFOLS, keep your $50 in your pocket and save it up. Once you have $10,000 meet with an investment specialist and turn the money over to them. They'll at least get you a real return, and you wont have to bother with all of this shipping, Paypal, Ebay, etc....after all, you wanted to invest right? Or maybe you wanted to run a toy store...If it's the latter just keep on buying the LEGO.

BrickBroker

Leave the LEGO on the shelves for the kids or the AFOLS, keep your $50 in your pocket and save it up. Once you have $10,000 meet with an investment specialist and turn the money over to them. They'll at least get you a real return, and you wont have to bother with all of this shipping, Paypal, Ebay, etc....after all, you wanted to invest right? Or maybe you wanted to run a toy store...If it's the latter just keep on buying the LEGO.

Things to think about, to be sure, but overall a somewhat ironic sentiment from someone calling themselves BrickBroker!

Things to think about, to be sure, but overall a somewhat ironic sentiment from someone calling themselves BrickBroker!Just pack it up guys...The BrickBroker spoke and wants you out of his business. The party is over...Maybe the BrickBroker should talk about how much those "investment specialists" cost. Just sayin'...

Yep, BrickBroker. Not: LEGOsetre-seller. Think masonry... I just think it's reasonable to consider that what you are doing is nothing close to investing. That is all I am saying. It's glorified trading entirely on speculation and emotion, and the exit is that you are hopeful you can sell an item on eBay or Amazon or some other site purely based on what someone before you sold an item for. That is hardly a sound investment strategy. Hope is not a strategy. Who will address the carrying cost or opportunity cost/loss argument I put forth? Do the math, think about what your space costs, what else you could do with it that could be more profitable. Hey, if using your home and car as storage for your LEGO investment is the best use for them then by all means go for it. Personally, I'm not getting involved in an investment for "possible" 5% return. That's not enough risk, certainly not enough reward, and I'll have to put a lot of the work into it, or hire people which would then further dilute the return...no thanks. BrickBroker (Masonry, not plastics)

If you aren't interested in the investing aspect why are you here? There are plenty of AFOL sites you could go be a part of......

where are you getting the 5% return from? most lego sets have handily beaten stocks over the same periods. and have returned much higher than 5% even after postage, fees, etc.

With the last few years in reselling Legos, I have outperformed most mutual funds/index funds. While this isn't investing per se, the strategy of buying Legos prior to its EOL and reselling after sure as hell is a better "investment" than turning it to an investment specialist who will tag you commission fees on trades that potentially loses money. We're not in the early 2000 hey day's where you can throw a dart and profit immediately. The stock market is hard and if you take a look at most entities, it doesn't look like they have large returns. I did not lose a single penny on any sets that I speculated last year. As long as you can afford to hold, worst case scenario is you break even or make a few bucks. Worst case scenario with stocks is you go into the red and lose.

Funny but I've never heard anyone say "I lost all my retirement money playing the LEGO market" but thats all I have heard about the stock market and 401k's these past few years. Besides, if the LEGO market collapses you can at least barter with your left over product (100 bricks for a cup of rice - 1000 bricks for a TV dinner etc..). Worthless pieces of stock certificates and notes aren't even worth the paper they are printed on.

If you aren't interested in the investing aspect why are you here? There are plenty of AFOL sites you could go be a part of......

I read in another thread the site's creators were asking for those with opposing views or the "Bears" to come out and speak their minds. I brought my views. Apparently I ruffled some feathers, and now I'm unwelcome for having an opposing view?

BrickBroker

5% return??......hahahaha

Of course you are welcome to express your views, I wasnt being sarcastic, I was truly wondering why you are here? Is it to discourage people from doing what we do? My feathers are aren't ruffled at all, are yours because you think their is no product left for kids or AFOL builders??

Also if there are people only netting 5%, they are doing it wrong.

Yep, BrickBroker. Not: LEGOsetre-seller. Think masonry...

I just think it's reasonable to consider that what you are doing is nothing close to investing. That is all I am saying. It's glorified trading entirely on speculation and emotion, and the exit is that you are hopeful you can sell an item on eBay or Amazon or some other site purely based on what someone before you sold an item for. That is hardly a sound investment strategy. Hope is not a strategy.

Who will address the carrying cost or opportunity cost/loss argument I put forth? Do the math, think about what your space costs, what else you could do with it that could be more profitable. Hey, if using your home and car as storage for your LEGO investment is the best use for them then by all means go for it.

Personally, I'm not getting involved in an investment for "possible" 5% return. That's not enough risk, certainly not enough reward, and I'll have to put a lot of the work into it, or hire people which would then further dilute the return...no thanks.

BrickBroker

(Masonry, not plastics)

As one of those creators of the site I would welcome a well written blog article on any negative aspects of LEGO investing and trading. Call it what you will, it is a means to make money. Maybe your intentions are honorable, maybe you are full of it and are trying to scare people out of the business for personal benefit, only time will tell. So far you've come across as slightly condescending. As for a 5% return, I don't think most people would bother either, but who is talking about 5% returns? Monthly maybe. LOL. The opportunity is here for you to share your point of view with thousands of people. I look forward to reading it.

Of course you are welcome to express your views, I wasnt being sarcastic, I was truly wondering why you are here? Is it to discourage people from doing what we do? My feathers are aren't ruffled at all, are yours because you think their is no product left for kids or AFOL builders??

What anyone does with their money is their business. If you want to clear off a whole shelf of toys or buy a whole toy store it makes no difference to me. I do not have kids, so it's impossible to tug those heart strings, and as far as AFOLs go, I am in that crowd for sure, I will clean off a shelf to get what I want, if that is what I want to do. Supply issues are LEGO's problem.

If anyone reads my words and is discouraged, well, that was not my intention at all. Go out there and buy that LEGO! I mean that, seriously, buy it all, I do not care. If you break down the real math, I think you will probably agree that you'd be better off getting a second job at McDonalds.

Still, no one has addressed the argument I have put forth regarding your carrying costs and opportunity costs/loss, no one has infinite capital, and if they do, they are not investing in something like this.

Instead, everyone wants to bash the different opinion and instead brag about how "successful" they are at LEGO speculating. I'm not going to argue with you guys. I'll wait patiently for the posts about how you liquidated, bought a yacht, mansion, and a Ferrari all from LEGO speculations. I have a feeling I will be waiting a long, long time.

BrickBroker

What anyone does with their money is their business. If you want to clear off a whole shelf of toys or buy a whole toy store it makes no difference to me. I do not have kids, so it's impossible to tug those heart strings, and as far as AFOLs go, I am in that crowd for sure, I will clean off a shelf to get what I want, if that is what I want to do. Supply issues are LEGO's problem.

If anyone reads my words and is discouraged, well, that was not my intention at all. Go out there and buy that LEGO! I mean that, seriously, buy it all, I do not care. If you break down the real math, I think you will probably agree that you'd be better off getting a second job at McDonalds.

Still, no one has addressed the argument I have put forth regarding your carrying costs and opportunity costs/loss, no one has infinite capital, and if they do, they are not investing in something like this.

Instead, everyone wants to bash the different opinion and instead brag about how "successful" they are at LEGO speculating. I'm not going to argue with you guys. I'll wait patiently for the posts about how you liquidated, bought a yacht, mansion, and a Ferrari all from LEGO speculations. I have a feeling I will be waiting a long, long time.

BrickBroker

Maybe I am missing something here. Don't all businesses and investments deal with carrying costs? If I play the stock market, don't I have the same issues with opportunity costs/loss?

I know it "shouldn't" be part of investment strategy, but I think a lot of us invest in LEGO not to get rich, but because we love and enjoy the product. If this were my full time job, I might be better off working at McDonald's. But if I can do something I absolutely love and do it part time, why not?

That's b/c this is a given...with ANY investment...

You failed to consider the value of doing something you love...

What anyone does with their money is their business. If you want to clear off a whole shelf of toys or buy a whole toy store it makes no difference to me. I do not have kids, so it's impossible to tug those heart strings, and as far as AFOLs go, I am in that crowd for sure, I will clean off a shelf to get what I want, if that is what I want to do. Supply issues are LEGO's problem.

If anyone reads my words and is discouraged, well, that was not my intention at all. Go out there and buy that LEGO! I mean that, seriously, buy it all, I do not care. If you break down the real math, I think you will probably agree that you'd be better off getting a second job at McDonalds.

Still, no one has addressed the argument I have put forth regarding your carrying costs and opportunity costs/loss, no one has infinite capital, and if they do, they are not investing in something like this.

Instead, everyone wants to bash the different opinion and instead brag about how "successful" they are at LEGO speculating. I'm not going to argue with you guys. I'll wait patiently for the posts about how you liquidated, bought a yacht, mansion, and a Ferrari all from LEGO speculations. I have a feeling I will be waiting a long, long time.

BrickBroker

I haven't seen a single person claim to get rich doing this.

How much should I charge for having 20ish boxes in my closet space that I wasn't using in the first place?

I think you are mixing up LEGO investing with retirement planning...most people do this as a hobby or for fun...

You seem really BOOK smart...

Still, no one has addressed the argument I have put forth regarding your carrying costs and opportunity costs/loss, no one has infinite capital, and if they do, they are not investing in something like this.

WOW.. These are loaded posts. The only thing I can add is that I honestly believe I enjoy building, buying and selling my Legos more than I would enjoy owning a yacht or Ferrari. Talk about carrying costs and overhead. By the way my 401K stinks and this is alot more fun!