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Forever Stamp Investing

forever stampMany news outlets have been suggesting that stocking up on forever stamps would be a good investment as well as being convenient. The truth is that the forever stamp should only be purchased for convenience purposes because it makes a poor investment for the following reasons:

1. The forever stamp will initially be sold for $0.41 starting April 12, 2007 which is the same price as stamps will increase to beginning May 14, 2007. This means that current purchases of the forever stamp will yield no gain at all in worth.

2. While the postage rates will likely increase on a yearly basis from now on, they will increase in price at the pace of inflation. That means that any investment gains you might see will be eaten away in purchasing power through inflation.

3. Unless you own a stamp business, it will be nearly impossible to sell the the forever stamp for whatever the current face value may be. Most people will not be willing to pay face value for the forever stamps. As pointed out on this site, you can buy stamps today at 10% below their face value which makes investing in the forever stamp seem even less appealing.

4. Even if you are able to get the current face value for the forever stamps you have, fees will destroy any profit you make. Auction fees, paypal fees, etc. will wipe out any gains from increasing prices. You would need to sell the stamps in huge quantities to simply break even and not many people need that many stamps.

5. For those of you who would be willing to buy thousands of forever stamps in an attempt to eek out a small profit, you may not be able to. The law makers figured that a number of people would try to invest in the forever stamp, so the forever stamp is only to be distributed in "reasonable quantities" to customers according to the law.

In the end, the forever stamp is a nice convenience which allows you to avoid making extra trips to the post office when postal rates change in the future. While it makes sense to pick up a supply of them for this reason, it makes no sense to invest in them.

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