Saturday, March 31st, 2007...2:55 pm
Forever Stamps as an Investment?
Will we see Forever Stamps bought in 2007 showing up on eBay 10 years from now? 20 years from now? On May 14th the cost of a first-class stamp will be raised to 41 cents. The USPS has increased the price of a first-class stamp 13 times since 1975, a 200 percent increase, but now you can lock in the price of mailing a first-class letter for just 41 cents with the Forever Stamp.
Historically inflation has run about 3.2%. Stamp prices have generally followed this trend too, so maybe hoarding Forever Stamps is not such a great way to hedge against inflation. Could your money be invested in something better? One could always buy a bunch of Forever Stamps just before a price hike, realizing a 2-3% gain in the short term, but is it really worth it?
I believe we are beginning to see a trend where the cost of a private citizen mailing a first-class letter will begin to rapidly outpace inflation. Saturation mailers, the so called “bulk mailers,” spend as little as 12.7 cents per piece of mail. They have only seen their rates increase 61 percent since 1975. As online bill paying, email, text messaging, virtual greeting cards, and online banking become more widespread, the demand for first-class postage will only decline. With this decline will undoubtedly come more frequent price hikes in the cost of mailing a first-class letter. Can anyone say economies of scale?
Does the USPS see the writing on the wall, and is the Forever Stamp a brilliant PR move on their part to stave off the public outcry when the cost of mailing a first-class letter may be increased on a yearly basis? We will always have a need for first-class mail; you just can’t text a condolence letter. However, the cost of mailing a letter may begin to reflect the true cost of its voyage from your desktop in Maine to a mailbox thousands of miles away in Alaska.
Perhaps we will see Forever Stamps on eBay 30 years from now, but will it be sold for use as discounted postage, or will it be sold as a curiosity from a time when the government actually delivered mail to our homes?
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