Does the Forever Stamp Make Cents?

Andrea Karim — Tue, 06 Mar 2007 07:12:37 +0000

The United States Postal Service announced that they may issue a "forever stamp" - that is, a stamp that you can buy now, at a given price, that will be good into eternity. Like all hedging, this sounded like a good idea at the time, but fortunately, there are people much smarter than me out there to crunch the numbers.

I tend buy stamps in bulk and then get seriously irritated when the rates go up a couple of years later and I'm forced to buy all those one and two-cent stamps to supplement my original purchases. So, on the surface, the forever stamp sounds like a good deal - spend $0.41 per stamp today for hundreds of stamps, and those stamps will be good for as long as they can still stick to an envelope!

However, according to The Simple Dollar:

In other words, when the “forever” stamp goes into effect, buying a bunch of stamps just before a rate increase is a very effective way to save money. You can easily outpace inflation with this “investment” and even outpace a lot of other investments, including money market accounts. Of course, over a longer period of time (a period of two stamp rate increases or more), the price increases begin to match inflation, and that’s not a good investment.

You can use and inflation calculator to determine the buying power of a any money from past to present here.

Does anyone even buy stamps anymore? I try to do all of my bill paying online, since the last time I paid my mortgage with an actual paper check, the bank had no idea what to do with it, and called me, asking why I hadn't paid my mortgage like I always did.

Random, slightly pointless, and obscenity-filled rant about cent-stealing stamp machine at the post office, anyone?

Written by Andrea Karim and published on Wise Bread. Read more articles from Wise Bread.

hedging bets

Does the Forever Stamp Make Cents?