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When the USPS introduced Forever Stamps — First Class stamps that are valid forever, regardless of future rate increases — my friends immediately had a clever idea: invest in them. Sitting around at a cocktail party, we talked it over — judging from recent postal rate increases, it sure seemed like buying Forever Stamps and reselling them in the future (when surely the postal rates will involve selling your organs) would be a great investment opportunity. While we didn’t bother to actually research it, I think we were all secretly thinking about leaving the party to go stock up on Forever Stamps.
Well, it turns out that Forever Stamps are guaranteed to be a bad investment idea, both because of inflation in the modern era and because of a pesky law that went into effect just before the stamps were announced. Slate’s Explainer column did the research, even linking to the story of a fellow who recently bought $8,000 worth of Forever Stamps (that’s 19,512 stamps). Anyway, The Explainer gives us some data to chew on:
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 rate 10 percent cheaper than it was 26 years ago. Should this historical pattern hold, you’d be paying more for today’s forever stamps than you would for any stamp in the future, no matter how high the rate goes.
In fact, this pattern must hold—as a matter of law. (…)
Read the whole article and also check out Lifehacker’s (retracted) “Save the new forever postage stamp” article. Also: this blog post is not intended to give investment advice (or non-advice), and is presented for trivia value only!
So…got any investment schemes that seemed like a great idea on the surface, but turned out not to be worth it?
when i was probably 7 or 8, i cut the advertisement out of seventeen magazine and counted up my change to order a kit that would give me high, define cheekbones(!). i put the article and my money under the rug in front of my bedroom door (why did i have a rug in front of my bedroom door?) and went to go play, and when i came back the stash was on my bed. i was so embarrassed that someone knew i was going to order a cheekbone kit (even my little kid mind thought it MIGHT be a scam, but maybe not!) that i just, never ordered it.
this story is kind of relevant.
posted by Katie on 8-14-2007 at 12:28 pm
in my neighborhood, we have a post-office that is considered universally horrible by all who have to use it. local hardware stores, drugstores, and 99 cent stores sell stamps in packs of 10 for $5 because people would rather pay the extra 9 cents per stamp than deal with the horrible post office.
now THAT is highway robbery, but it’s also a genius way to make easy money.
posted by suzan on 8-14-2007 at 1:37 pm
And you haven’t even added in the ‘Future Value of Money.’ That is the calculation that financial calculators do to weigh spending a dollar verses investing the same dollar. Adding that to the mix would make the investment even worse.
While it makes no sense as an investment, it is still a good idea buy forever stamps for personal use. I am still working through a stack of $.39 stamps. I had to go down and purchase and equally large stack of 2-cent’rs. When that supply runs out, I am going to buy the forever stamps so the next rate hike won’t mean I have to wait in line again to get the upgrade stamps (the vending machine is always out of them).
posted by n2y2 on 8-14-2007 at 3:25 pm
Don’t forget that we will need fewer and fewer stamps with online banking.
posted by CL on 8-14-2007 at 3:39 pm
It always kind of amazed me that it to the brilliant minds at the USPS so long to come up with this. It eliminated a ton of hassle for their clerks (probably enabled canning a whole bunch), and encourages people not to be meager buying stamps. The USPS gets the money up front and a lot of those pre-purchased stamps get misplaced and never used.
One thing that absolutely drove me mad in the old system was the “letter denomination” stamps they would print in anticipation of a coming rate hike. They would just say “E rate” or something stupid because they wouldn’t know how much of a rate hike they’d be able to get away with. Well, when you turn a few of those up in a drawer years later, it’s always a pain to figure out what their denomination is. The “Forever” stamp should be the norm for 1 oz First Class postage.
posted by Sid Morrison on 8-15-2007 at 7:09 am
Actually, one of my friends discovered a predecessor of the Forever stamp some years ago–the humble “First Class”-only stamp unmarked by any monetary amounts. We’ve saved hundreds of cents (dollars, even) by buying loads of these generic first class stamps that keep their value with each postage mark-up. That is, until this last one. Now we’re unable to mail a letter with a single “First Class”-only stamp. Le sigh.
posted by popsciolist on 8-16-2007 at 1:02 am
popsciolist:
If I understand you correctly, those stamps that are unmarked with a monetary value still have a fixed face value, see the usps page here:
pe.usps.gov/text/qsg300/Q604a.htm
This page shows a photo of each unmarked stamp and how much postage it is actually worth. Perhaps you and your friend just got lucky and had enough postage on your piece by accident!
posted by CA Emery on 8-17-2007 at 4:39 pm
You can call it the forever stamp. When they decide to up the price again, they will just create the “AND A DAY” stamp.
posted by Geocarlin on 8-17-2007 at 8:46 pm