Feb 12th, 2008
For the love of God, do not invest in forever stamps (top 5 reasons why not)
Ive heard some rumblings about stock market instability and the fact that the new forever stamps are another thing to invest in since postage rates climb fairly often. However they are NOT a good investment. To the right is my new and improved design for the forever stamp. Lets go over why:
1) Buying a ton of stamps sucks. Do you really want to go into the post office and buy a truckload of stamps? Added bonus they WONT EVEN SELL YOU that many. Thats right, they are limited to a “reasonable” quantity. Though it might be funny to walk into the store and ask for 10,000 stamps, I’m pretty sure they wont consider that a reasonable quantity.
2) You can’t even sell stamps for face value. Check ebay. Just because something costs 42 cents doesn’t mean that you can buy it and turn around and sell it for 42 cents.
3) Why aren’t you putting that money into your debt payoffs/retirement fund/emergency fund/index fund/fund to go to cabo?
4) The postage rates are increased yearly based on inflation** and this just in: pacing inflation is not a good investment.
**Our government works in strange, mysterious and non efficient ways, so who really knows.
5) There are better ways to spend your time and messing around with stamps. Yeah I know that is pretty general, but lets think this through. Ok so you buy thousands of forever stamps. You hold on to them for a few years. Now its time to sell. Where are you going to sell thousands of stamps? Ebay? To a store maybe? Logistically its just not feasible. I will probably have a nightmare tonight about running around from store to trying to sell them my crappy boxes full of stamps.
What are forever stamps good for?
Convenience. Buying one cent stamps is annoying when they hike rates. So if you hang onto stamps for a long time, buy yourself some forever stamps to reduce the hassle. Otherwise, leave em alone!
- 12 Comments
- Investing , Top Five Lists
But, what if the price of stamps goes up to .75/stamp soon. Your original investment is lets say 1,000 forever stamps at .42/each. $420. So, later on when they are .75 you go to buy 1000, $750. If you sell yours at even .60 cents and make ($600-$420) $180. That is still a good chunk of change. I dont make that much in appreciation of bonds.
Thats true, but the same could be said about anything. “If you buy stock X at $1/share, it could balloon up to $10/share and your $100 would then be $1000.
But lets even take the point that stamps never have the chance of going down in price and translate it to: how do you retrieve your profit should they go up in price that much? Lets also not forget that a jump like that is highly unlikely: stamp prices have actually not even kept up with inflation historically
And is there really a market for selling stamps second hand? I mean, is there a market to buy?
Maybe a few prolific writers would need this. But obviously most communication is done by e-mail. We buy stamps very infrequently.
My mom still writes letters and it might be worth it for her to stock up a bit now. But that’s like stocking up on staples for your own pantry…there’s not really a market for canned tomatoes outside the grocery stories.
You know I considered buying stamps but I never considered how I would get rid of them when I wanted to. HMmmm.
Also, to the first commenter’s point, stamp prices have never increased faster than inflation. In fact, I believe it is law that stamp price increases have to be below the rate of inflation. Thus, if you can invest in anything that has a higher return than the rate of inflation, then you’re better off investing your money, earning a return, then buying stamps when you need them.
Buying a ton of Forever stamps is equivalent to stashing your money under a mattress.
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I really can’t believe some people are even considering this!
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[…] please, don’t consider forever stamps an investment. The math isn’t there. As The Penny Saved observed: “The postage rates are increased yearly based on inflation — and this just in: Pacing inflation […]
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