The Lego Investor

One of the best articles I read recently was about this guy, Dr. Paul Janssen, who spent years building a model of Ohio Stadium (The Ohio Stadium) out of Legos.

There are a lot of threads to pull from that article, but what I want to know is: What is Dr. Janssen’s IRR?

Hitting secondary market sites like BrickLink and eBay, Janssen spots sets that he wants, then carves them up and sells off individual pieces he doesn't need — especially the little figures in many sets — to not only recover what he spent but to make money. He especially makes a killing by buying Harry Potter sets, keeping the pieces and bundling the Potterverse characters to sell to collectors. He'll sometimes clear out entire post-holiday inventories of stores, then wait a year (or two or three) before selling them online. It's the equivalent of buying all of Walgreens' clearance Valentine's Day stuff at 90% off, eating half of it, then selling the rest at full price next February.

"Paul figured out how to buy and sell patiently," Coifman says. "Before you knew it, he was building skyscrapers that were $5,000 worth of bricks. He was a rags to riches Lego buyer."

In fact, for most of the past 20 years, Janssen has had to file an annual tax return for the money he brings in, which has ranged from a few thousand dollars as high as mid-five figures. He is stockpiling a Lego warehouse while making money.

For the stadium, Janssen used all of his Lego economist skills. He drew up a massive diagram of what he would need using photos — some from aerial images, some he took himself at home games. He needed massive amounts of basic blocks, which he mostly could pull from his already existing inventory.

But then he ran into a common problem for Lego "purists," the term he and other builders use for those who refuse to cut, glue or paint blocks. Everything he builds must naturally exist in a set, with no adaptations allowed. For Ohio Stadium, he needed 60 to 70 curved arches for the top of the stadium, the kind that isn't produced often by Lego.

He finally discovered a set sold only in Europe in the late 1970s and early 1980s. Each set included two arches that looked perfect for his stadium project, so he methodically began placing orders from sellers all over the world. He'd buy one or two at a time, chipping away at the 30 to 35 sets he needed. After months of hunting and gathering, Janssen finally had every arch he needed. Then he bundled up the other bricks and sold them online, basically breaking even by the time he was done.

Smarts. Patience. Painstaking research. Some luck. Price discipline. A willingness to look stupid.

That’s how you do it.

— By Tim Hanson


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