The Alternative Investment that Outpaces VC Funds

Here at A Rich Life we encourage you to take investing seriously: stay informed, get the best information available, and make wise decisions for the future. 

Investors also have to watch out, because there are plenty of predators out there. Many high-prestige funds have made lacklustre returns over the years, more interested in charging fees than making sure they park your money in the right place. 

Just how lacklustre exactly? Let’s take an unusual benchmark: Lego.

According to Will Manidis, “You can outperform most venture funds using Lego.” 

Will created a spreadsheet with 10,000 Lego releases from the past 20 years. This was culled down from 16,000 based on gut feeling: discarding the oddball releases and keeping instant classics like the Eiffel Towel, Hogwart’s Castle and the X-Wings and Rebel Fighters.

The results are there for all to see. Assuming purchase on release and held until today, those hundred or two hundred-odd dollar boxes of Lego have made 10x returns by now.

Not every box of Lego has climbed in price. But then again, not every fund manager is a success either. Manidis’s data, based on US venture capital funds, shows Lego roughly keeping pace with professional investors.

As Manidis put it, “The world of super alternative assets is hilariously vast and probably deeply unexplored.” And Lego isn’t the only alternative investment that’s passed across my radar lately.

Another is the mid-90s to mid-2000s Toyota Land Cruiser. Like Lego, the Land Cruiser is an “if-you-know-you-know” sort of thing: the vast majority of people take absolutely no notice, but for the enthusiasts it’s a huge deal.

Major draw-cards for this sub-culture is that the Land Cruiser body is almost entirely high-tensile steel, and also that very few electronics are used. So if you know a bit about mechanics, you can maintain it yourself and it will run for as long as you can afford to keep putting petrol in the tank.

“The bottom line is the land cruiser is among the most reliable vehicles ever made,” one online enthusiast wrote. From around $40,000 brand new in the 1990s, well-maintained Land Cruisers are selling for $80,000 today.

Of course, not everything old and good lasts. The internet is full of diligently sealed and maintained VCRs of Star Wars and Indiana Jones movies on sale for $15.

If there is a trick to it, perhaps it’s recognising the rare items of craft in an increasingly disposal culture.

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