I just read about the new Forever Stamp that has been approved by the Postal Service. Basically, you can buy as many 41 cent stamps as you want, and they'll be good forever.
Any thoughts on stocking up? Guaranteed to go up in value, no taxes on the increases...
To enter a coupon code in your post please enter the following info:
Coupon Code:
Coupon Offer:
Merchant:
Expires (optional):
Restrictions (optional):
saving...
Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.
Here's a great little chart: link Seems like the rate of increase has been fairly steady since stamps hit 8 cents back in 1971. That makes an average rate of 33 cents / 36 years, or about 1 cent/year. Assuming historical trends continue, this means the annual rate of return over the next few years would be about 2.5%, and would decrease as time went on.
cashmonkey said:Well, let's look at historic stamp prices.
Here's a great little chart: link Seems like the rate of increase has been fairly steady since stamps hit 8 cents back in 1971. That makes an average rate of 33 cents / 36 years, or about 1 cent/year. Assuming historical trends continue, this means the annual rate of return over the next few years would be about 2.5%, and would decrease as time went on.
Not worth it!
I agree with your conclusion but not your method.
41 cents = 8 cents (1 + annual average rate of increase)^36
annual rate of increase = 4.6%
still not worth it! (unless you count this as part of your fixed income portfolio - like an I bond or a TIP).
41 cents = 8 cents (1 + annual average rate of increase)^36
annual rate of increase = 4.6%
still not worth it! (unless you count this as part of your fixed income portfolio - like an I bond or a TIP).
You're fitting a linear function with an exponential! The stamp price has been going up as a constant function of time, so fitting it to a constant rate of return doesn't make sense. Forever Stamps would have been a great investment back in 1971, when the annual rate of increase was 1 cent/year = ~12.5%. These days, though, that 1 cent/year is just 2.5%.
Nitpicking, of course, but it's the principle that counts.
But if the cost of a forever stamp is the same as the cost of a regular stamp, it makes sense to buy forever stamps instead of regular stamps. You are no worse off buying them and in case you have any left over when the rate goes up, you save the cost of extra postage. It also makes sense to buy what you'll need for a few months just before the rate goes up, since you'll recoup your investment in a short time.
But given historical rates of postage increase, you would not have made out very well stocking up for the long term.
on a separate note you can usually buy stamps at 5% to 10% off face value on eBay with a bunch of smaller denominations, or just use your 5% off Cash Back card at the grocery store
xpguy said:This is a good investment if you buy up all the forever stamps before the next rate increase (say the day they announce a rate hike to 43 cents)
They sound like they are going to be for sale before the actual rate hike takes affect. However they will still be sold for 41c. If so, could it be that as soon as they announce a rate hike again, lets say to 43c, the forever stamps will go up immediately, while the increase to 43c takes a few months? OR would it take at least some time to put it into affect?
interesting observation...Since the forever stamps don't have any prices printed on them, the day they announce the next price hike (we assume from 41 cents to 43 cents) they could just start to sell them at the higher price (43 cents). But something tells me that the USPS isn't that efficient (with their computer systems and vending machines and such) and that you could probably still buy forever stamps at the 41 cent rate even after they announce the next hike to 43 cents (and before the new rate is in effect)
Fortunately, the post office can't announce a sudden rate hike.
Rate hikes have to go through the Postal Rate Commission, periods for written comment, and public hearings. You'll know months ahead of time if there are any rate increases being planned, if you pay attention to the news.
frootmall said:Fortunately, the post office can't announce a sudden rate hike.
Rate hikes have to go through the Postal Rate Commission, periods for written comment, and public hearings. You'll know months ahead of time if there are any rate increases being planned, if you pay attention to the news. Yeah I belive this next increase was annouced last Nov. I think the forever stamp increases with each new increase also. While you may be able to invest early, mind you this is only good for FCM 1oz im not sure but most people dont mail out that much mail, and the ones who do are getting it discounted. I see the resale value of these being pretty hard and not worth the effort/risk of selling Theres a few discussions on the auction forums also.
tooshy said:Of course the post office will be the big winner...every which way. No thank you.
I dunno, stamps and mailing things seems like a pretty good deal. For 41c someone will come to my house and pick up an envelope. Then they will deliver that envelope anywhere in the US. I wouldn't deliver something down the street for 41c.
davef139 said: Yeah I belive this next increase was annouced last Nov. I think the forever stamp increases with each new increase also. While you may be able to invest early, mind you this is only good for FCM 1oz im not sure but most people dont mail out that much mail, and the ones who do are getting it discounted. I see the resale value of these being pretty hard and not worth the effort/risk of selling Theres a few discussions on the auction forums also. Thanks for mentioning that. I never even thought of reselling them, just stocking up for my own use. The cost of mailing the stamps to the buyer would probably eat up any potential profit!
markwm said:Didn't Ponzi make his money by claiming he was investing in stamps or something? Ponzi's original scheme would have made any FWer proud. His scheme involved International Reply Coupons (IRCs). An IRC is a coupon you can buy at a post office and mail to someone in a foreign country. The person in the foreign country can take the coupon and use it to pay for sending an international letter anywhere in the world. It is used to help someone in a foreign country pay to reply to your letter when you can't get any foreign stamps.
Ponzi discovered that IRCs could be purchased in certain foreign countries for a fraction of the price of mailing a letter from the U.S. and the US Post Office had to honor these IRCs. He convinced investors that he was going to make a killing stocking up on foreign IRCs and selling them in the US.
A summary with some additional data (oh, Priority Mail, why do you hate me so?):
The rates taking effect May 14 include: - Letters, bill payments, greeting cards: 41 cents for the first ounce, up from 39 cents. - Wedding invitation (2-ounces), 58 cents, down from 63 cents. - Postcard, 26 cents, up from 24 cents. - Priority mail flat-rate envelope, $4.60, up from $4.05. - Express Mail flat-rate envelope, $16.95, up from $14.40. - Parcel Post, 1-pound package, $4.50, up from 3.95. - Bank statement, 2 ounces, presorted, 45.9 cents, down from 54.4 cents. - Utility bill, barcoded, 31.2 cents, up from 29.3 cents.
Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.
