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I'm talking Forever Stamps. Woohoo!
March 26, 2007
Forever Stamps
The Forever stamp goes on sale April 12 at 41 cents. Customers can begin using the stamp when postage changes May 14.
July 6, 2010
Stamps may go to 46 cents
The U.S. Postal Service on Tuesday proposed a 2-cent increase in the price of a first-class stamp, bringing the cost to 46 cents. The change, if approved, will go into effect on Jan. 2.
That's a 4.55% increase over the previous postage rate. It's also a 12% increase over the 3.75 years since inception (April 2007 to January 2011), or roughly 3.1% per year. (Math error fixed. See the comments.)
Unlike many hoarding ideas (precious metals?), you will never have to pay capital gains tax on the inflationary profits and you will never require a greater fool to buy them from you at a price higher than you paid. Win win.
Should this interest you, the ideal time to buy forever stamps would be just before the price increase in January. I've already bought a lifetime's worth. I'm pretty much done.
March 19, 2009
Guaranteed 4.76% Tax-Free Investment Idea
Here's an arbitrage strategy. Sell your 3-Month Treasury Bill yielding 0.19% and use THAT money to buy the stamps. It's a 4.57% differential. Genius!
It's been a year since I wrote that. 3-Month Treasury Bills now yield 0.17%. The strategy works just as well now as it did then. I strongly suspect that I'll be offering this "Forever Strategy" many times in the years ahead.
There's even a decent chance that the price of postage stamps increases at a pace faster than inflation overall. If so, that would make forever stamps an especially good investment well into the distant future.
1. Delivering mail requires a lot of fuel.
2. The Postal Service is trying to dig itself out of a deep financial hole.
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
-
At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
11 hours ago
6 comments:
Good to see you back! I hope all went well for the holiday weekend.
GYSC,
All went great!
I arrived Friday night and my mom had a HUGE steak waiting for me. Go figure!
I spent Saturday with my mom and we got her a new puppy. It's an adorable 10 week old Shih Tzu. We then ate dinner with my sister that night.
Saturday night I performed the initial puppy crate training. I took her out at 8:00pm, 11:00pm, 2:00am, and 4:30am. I was a bit tired on Sunday but I managed to survive it thanks to a lifetime of staying up late, lol.
Sunday we drove to Idaho to spend some time at my brother's lake cabin. He provided a "safe and sane" fireworks display of um, well, biblical proportions. Perhaps it wasn't all that safe and sane come to think of it, but nobody had their eye poked out or anything!
I spent the night and drove home Monday. Here I am ready to heckle the economy again! ;)
Stag,
It's also a 12% increase over the 2.67 years since inception (May 2007 to January 2011), or roughly 4.4% per year.
Your arb trade makes sense, but I think it's slightly less lucrative than your figures indicate.
First, May 2007 to Jan 2011 is 3.67 years, not 2.67 years. And according to Wikipedia, the forever stamp went on sale April 12, 2007, so its actually 3.75 years. That gives us roughly 3.1% annualized stamp inflation.
http://en.wikipedia.org/wiki/Forever_stamps#Forever_stamps
The CPI was at 206.686 in April 2007. As of May 2010, the CPI stood at 218.178. If we assume a 1% increase from here, CPI will be at ~ 220 in Jan 2011. That would give us ~ 1.7% CPI inflation over the comparable period.
Stamps for the win! I want some leverage too!
Whoa, I have no idea why I spent so much time penciling out this investment idea. I'm a "bear" (for detail). ;) not really.
mab,
Oops! Right you are! I was off a year. I'll correct that and repost.
Hey Mark, I expect them to cap the number of Forever Stamps one can buy to $5000/annum between now and the next rate hike. :-)
AllanF,
Could be!
It could also go the other direction too though. They could make the forever stamps SO inspiring that people would collect them and never use them!
Picture stamps with these phrases on them...
"This stamp is money!"
"If you use it, you lose it!"
"I survived Great Depression 2.0!"
"Dow 10,000 here we come again!"
"Just say no to foreign oil!"
"Jesus wants you to hoard this stamp."
"This stamp made in America!"
"Got guns?"
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