The US Postal Service has proposed a stamp rate increase that would increase the cost of a first-class stamp from 39 cents to 42 cents in the spring of 2007. That’s not surprising.
What is surprising is that they’re also proposing a “forever stamp” that customers could use as a hedge against future rate increases.
The forever stamp would help soften the blow of a rate increase by allowing customers to stock up. As originally proposed it would sell for the first class rate and, once purchased, the special stamp would remain valid for whatever the first-class rate is when it is used, regardless of future increases … “A forever stamp would help ease the transition to any future price adjustments,” board Chairman James C. Miller III said.
A “forever” stamp sounds like a keen idea in practice, though to be truly cost-effective one would need to buy thousands and then hoard them for decades.
Or you could just buy a couple extra books and put them in a drawer for 20 years. Resist the temptation to cash them in for those few pennies when they raise the prices in 2009 and 2012, and you’ll have a helpful stash when stamps cost $2.68 in 2025.
When people ask when to start saving for retirement, I always say that today’s dollar has two advantages over tomorrow’s. The first and most obvious is interest accrued; but the second is that it’s easier to push a mop for minimum wage when you’re 28 than it will be when you’re 72. Both apply here. Not having to buy stamps may be a small thing, but it will help when you’re navigating retirement.
Bad money.
Once invested in stamps, all risk of loss is yours and all interest accrued on the money belongs to the post office. Until they actually deliver the service, you are loaning them your money with ZERO idea of what your future return might be. Moreover THEY control future prices and would not make this offer if there was any likelihood that it was to your advantage instead of theirs.
Oh, BTW … with automated payments and the use of e-mail becoming the norm, chances are good that you might never even get face value from those stamps.
Historically, the price of a first class stamp has increased slower than the rate of inflation. So hording decades worth would be akin to investing in an illiquid retirement account with a 2.5% annual return.
So your best bet is to buy just enough to cover the next price interval. Any more, and your money is better invested elsewhere.