Don't "invest" in "forever" stamps

[erebusrat]

"Since 1971, postal rates have increased more slowly than the actual inflation rate, as measured by the U.S. Consumer Price Index. So, despite the numerous rate hikes over the last 36 years, stamps have actually been getting cheaper. The 20-cent stamp from 1981, for instance, would be equivalent to 45 cents in today's dollars-which makes today's

Comments

[kriskoekk]

OK, well, as an $8000 investment it's a stupid idea (why not at least take your money to the bank where it will earn interest?), but if I'm going to buy 20 stamps anyway and it will take me a year or two to use them up because I do almost everything online anyway, it seems reasonable to just get the forever stamps. That way I don't have to go buy the stupid 2 cent stamps when I can't use the four stamps I have left in 2010 because they hiked the rate again.

[mayna]

I agree, I waited in line at the post office for 1/2 hr to buy 32c worth of 2c stamps (their vending machine was broken, if it even carried them at all). The guy behind me was muttering a lot, really pissed that he had to wait in the long line for one 2c stamp.

[goldbug]

I thought all first class stamps from now on were gonna be the forever stamps -- they just say "first class" on them and no longer have a rate printed.

[lower_class]

I understand what that says, but I would rather spend $0.41 now, then say...$0.50-$0.60 next year.

No matter how money changes and inflation changes, $0.41 is still $0.41

[allplannedout]

I think that the idea is that the alternative to spending $.41 on stamps now is to put $.41 into a savings account and take out the money when you need to buy stamps later. And by this calculation, it makes more sense to put it into the savings account, if you're buying them in investment-level quantities, presuming your savings account is out-earning the inflation rate.

One of the things the article does specify is that it *won't* be $.50-$.60 next year, because they've passed a law so that at least in the near future, postage hikes cannot go higher than inflation rates.

The convenience factor is still there, of course, but there's no point in buying thousands of dollars in stamps in the hopes that postage prices will rise astronomically high and you'll be able to make a profit on them later.

[mnemia]

That's what inflation means though....$0.41 is NOT still $0.41, because it's worth less. Buying it next year might well be cheaper even if they increased the price to say 0.45, because 0.45 next year might be worth less than 0.41 is now.

In any case, it's just pennies. It's not going to matter much unless you're buying a huge number of them. If the goal is to insure against inflation, TIPS (Treasury Inflation Protected Securities) bonds would be a better move.

[bluemetalpig]

The price hikes are so few and far between, and amount to pennies. All the forever stamp does is keep the post office from having to incur the cost of producing those 1 and 2 cent stamps. They lose money on those tiny stamps. I'm glad just because it's a pain to upgrade old stamps.

Even so, the fact of the matter is that you're not saving anything worthwhile if you stock up on forever stamps. The only thing you save is a trip to the post office, and in this day and age you should simply save time, pennies and paper products by paying bills online anyway. :)

[poetpaladin]

While it is true that inflation has outpaced the speed of stamps, I anticipate stamp costs rising faster over time as the U.S. Postal Service deals with rising governmental employee salaries, benefits, and pension costs - not to mention rising fuel costs.

That said, the cost of sending an envelope is really negligible and I wouldn't recommend investing your life savings into this. You can save much more money by paying bills on-line via your bank.

[hbpen]

I'd been thinking about this since they announced it. I mean, the interest alone would make you lose money even if the prices did keep up with inflation.