Forever Stamps as an Investment?

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bigtex
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Forever Stamps as an Investment?

Post by bigtex » Thu Oct 18, 2018 7:37 am

Hello,

What are your thoughts of using forever stamps as an alternative investment / inflation hedge? I could buy thousands worth of forever stamps, and wait for the price of the stamps to rise. I could then sell them on a market like ebay, craigslist, etc. I looked up historical stamp prices and it seems they keep in line with inflation averaging about 3% per year over the last 20 years.

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LiveSimple
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Re: Forever Stamps as an Investment?

Post by LiveSimple » Thu Oct 18, 2018 7:38 am

Good Luck. I buy them for personal use and lose somewhere, so go to the post office and buy as needed

Chip
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Re: Forever Stamps as an Investment?

Post by Chip » Thu Oct 18, 2018 7:40 am

Previous thread here.

retiringwhen
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Re: Forever Stamps as an Investment?

Post by retiringwhen » Thu Oct 18, 2018 7:44 am

bigtex wrote:
Thu Oct 18, 2018 7:37 am
Hello,

What are your thoughts of using forever stamps as an alternative investment / inflation hedge? I could buy thousands worth of forever stamps, and wait for the price of the stamps to rise. I could then sell them on a market like ebay, craigslist, etc. I looked up historical stamp prices and it seems they keep in line with inflation averaging about 3% per year over the last 20 years.
Pro: sort of analternative to TIPS / I-bonds without explicit inflation protection.

Cons:
- The role of the USPS in the future is about as uncertain many other corporations even though it is a Gov't charter agency/corporation, 20 years from now what will be the demand for Forever stamps? You'll be fully dependent on a secondary market to retrieve value from the investment. USPS doesn't buy them back.
- They have all the downsides of physical bonds from a safe-keeping perspective as well as the anonymity of cash (that could be a plus in some scenarios)
- What if the USPS gets efficient at twice the rate of the economy and the price increases ar less then inflation?

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ReformedSpender
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Re: Forever Stamps as an Investment?

Post by ReformedSpender » Thu Oct 18, 2018 7:45 am

:oops:

Postal mail has been on a steady decline since 2000-2001. Social media and/or email.

Good luck
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JMacDonald
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Re: Forever Stamps as an Investment?

Post by JMacDonald » Thu Oct 18, 2018 7:50 am

Let's say you invest $1000 in stamps and $1000 in the Vanguard Total Stock Market, which one do you think will be worth more in 20 years?
Best Wishes, | Joe

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DaftInvestor
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Re: Forever Stamps as an Investment?

Post by DaftInvestor » Thu Oct 18, 2018 7:54 am

bigtex wrote:
Thu Oct 18, 2018 7:37 am
Hello,

What are your thoughts of using forever stamps as an alternative investment / inflation hedge? I could buy thousands worth of forever stamps, and wait for the price of the stamps to rise. I could then sell them on a market like ebay, craigslist, etc. I looked up historical stamp prices and it seems they keep in line with inflation averaging about 3% per year over the last 20 years.
Do you think the USPS will exist in 20 years? Probably not in its current state. In 10 years you may end up having to sell the stamps at fraction of the cost because no one will be using the USPS anymore. I think I personally only mailed two things in the last 6 months. I don't understand why we don't cut down to twice weekly delivery, etc. to start cutting back.

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F150HD
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Re: Forever Stamps as an Investment?

Post by F150HD » Thu Oct 18, 2018 7:58 am

bigtex wrote:
Thu Oct 18, 2018 7:37 am
Hello,

What are your thoughts of using forever stamps as an alternative investment / inflation hedge? I could buy thousands worth of forever stamps, and wait for the price of the stamps to rise. I could then sell them on a market like ebay, craigslist, etc. I looked up historical stamp prices and it seems they keep in line with inflation averaging about 3% per year over the last 20 years.
LOL....sure, you go buy them but be sure to post a picture.

Ebay socks you 10% on a sale, need to figure that into your stamp equation.

What would the glue and/or adhesive look like in 15+ years when you sell?

much easier to use a CD IMO.

aristotelian
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Re: Forever Stamps as an Investment?

Post by aristotelian » Thu Oct 18, 2018 7:59 am

Biggest risk is losing or spilling coffee on them. If you are looking for guaranteed inflation adjusted return, stick with I Bonds and TIPS.

retiringwhen
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Re: Forever Stamps as an Investment?

Post by retiringwhen » Thu Oct 18, 2018 8:01 am

DaftInvestor wrote:
Thu Oct 18, 2018 7:54 am
Do you think the USPS will exist in 20 years? Probably not in its current state. In 10 years you may end up having to sell the stamps at fraction of the cost because no one will be using the USPS anymore. I think I personally only mailed two things in the last 6 months. I don't understand why we don't cut down to twice weekly delivery, etc. to start cutting back.
Intrestingly, the future of the USPS may be 7 day delivery as the continue to become more and more an alternative last-mile delivery system for the e-commerce vendors... The thing is Forever stamps are all about 1st Class postage for all intents and purposes, the future of the USPS is more and more parcel delivery and as noted, there are much more efficient (time and cost) methods to pay for those services than a Forever stamp.

22twain
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Re: Forever Stamps as an Investment?

Post by 22twain » Thu Oct 18, 2018 8:16 am

Suppose you have a pile of sheets of stamps amounting to a few $K in postage value and you want to cash them in. How will you sell them? Who do you know that can use that many stamps? Businesses that send a lot of mail generally use postage meters or pay their postage in bulk at the post office.

I visit stamp shows regularly. There are usually some dealers with a supply of sheets or part-sheets that they sell at a discount from postage value, maybe 10%-15%, maybe more if they're common stamps from when the first-class rate was 20c or 10c or even less. They buy them at an even bigger discount from collectors and other people who originally bought them as an "investment".

These are generally older stamps, though, with a "face value" marked on them. I haven't looked specifically for forever stamps in those stocks. I'll have to check that out the next time I get a chance.
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harvestbook
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Re: Forever Stamps as an Investment?

Post by harvestbook » Thu Oct 18, 2018 8:24 am

I have a ton of sports cards and comic books in the attic I am selling on the "kid in college" plan, which were supposed to "grow in value." What really happened is that far fewer people want them, eBay proved the ridiculously absurd overproduction, and most of it won't even fetch the original price, much less keep pace with inflation, and a good percentage of it is sheer recycling garbage.
I'm not smart enough to know, and I can't afford to guess.

moehoward
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Re: Forever Stamps as an Investment?

Post by moehoward » Thu Oct 18, 2018 8:48 am

bigtex wrote:
Thu Oct 18, 2018 7:37 am
Hello,

What are your thoughts of using forever stamps as an alternative investment / inflation hedge? I could buy thousands worth of forever stamps, and wait for the price of the stamps to rise. I could then sell them on a market like ebay, craigslist, etc. I looked up historical stamp prices and it seems they keep in line with inflation averaging about 3% per year over the last 20 years.
LOL, who uses stamps anymore? I think I used 2 all of last year.

barnaclebob
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Re: Forever Stamps as an Investment?

Post by barnaclebob » Thu Oct 18, 2018 9:07 am

I use maybe half a book of stamps all year. Who would purchase these stamps from you at full value?

PoppyA
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Re: Forever Stamps as an Investment?

Post by PoppyA » Thu Oct 18, 2018 9:50 am

I just bought $125.00 worth stamps at a collectors show. I paid between 30% and 45% off face value. I love old space themed stamps!
"La Bella Luna"

digit8
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Re: Forever Stamps as an Investment?

Post by digit8 » Thu Oct 18, 2018 10:00 am

I think it's Andrew Tobias who mentions some executive that bought pallets full of Cepacol mouthwash and pointed out that this executive was essentially protecting himself from inflation by doing so. Buy pretty much anything in bulk, that won't go bad, and you're probably saving yourself some money in the long run- but that is not the same as a good investment.
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GAAP
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Re: Forever Stamps as an Investment?

Post by GAAP » Thu Oct 18, 2018 10:02 am

Have you heard of ANYONE buying stamps for postage (not collecting) on eBay?

I would guess that you would get more return from buying a new book of stamps as a future collectible -- and that the return would be lousy.

They're a commodity product, used infrequently, readily available -- and generally needed for immediate use. Ordering stamps to save a few cents doesn't make sense to me (or probably most people).

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c.coyle
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Re: Forever Stamps as an Investment?

Post by c.coyle » Thu Oct 18, 2018 11:52 am

Hasn't the price of mailing a letter been increasing, at least in part, because demand has been decreasing? If it were a real market, wouldn't the opposite be happening?
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libralibra
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Re: Forever Stamps as an Investment?

Post by libralibra » Thu Oct 18, 2018 1:23 pm

You can make 10% return in one day (Jan. 27, 2019) if the increase from 50 to 55c is approved.
https://about.usps.com/news/national-re ... 18_086.htm

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Re: Forever Stamps as an Investment?

Post by sport » Thu Oct 18, 2018 4:09 pm

moehoward wrote:
Thu Oct 18, 2018 8:48 am
LOL, who uses stamps anymore? I think I used 2 all of last year.
QCD donations from an IRA account require paper checks to be mailed (unless you want to hand-deliver them). It is possible to have the IRA custodian mail them for you, but it is better to have them send the check to you so you can photocopy it and include other information with the donation.

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Re: Forever Stamps as an Investment?

Post by sport » Thu Oct 18, 2018 4:10 pm

If the OP really wants to do this, Costco sells forever stamps at a small discount.

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Re: Forever Stamps as an Investment?

Post by nisiprius » Thu Oct 18, 2018 4:23 pm

It's the same problem as the supposed basis of Ponzi's scheme,* but with a much less favorable return. You could probably buy them in sufficient quantity to store enough value to be a meaningful investment, let's say $5,000 worth or more. Indeed, I see that "Flowers from the Garden" is available in rolls of 10,000 for exactly $5,000. The problem is in selling them. Inflation is currently running only a few percent percent per year. In order for them to be a useful investment you'd have to be able to sell them at a cost of much much less than that. It's not at all clear to me how you could do that. Perhaps if you could find who else is buying the rolls of 10,000, but why would anybody buy them from you rather than the government? You'd need to discount them enough to be an inducement, and of course there is the shipping cost... it's a lot of work and uncertain, certainly compared to buying US series I savings bonds.

Plus, of course, there is considerably uncertainty as to what first class postage rate futures will be compared to inflation.

*He had noticed an anomaly in the price of international postal reply coupons. In theory you could exploit this to make money--effectively stealing from the International Postal Union countries. In a sense it was valid, but because this coupons are sold for a few dollars for individuals wanting to exchange small amounts of mail, there was no way to scale it up to be a legitimate investment. Ponzi possibly intended to be honest, but when he discovered he couldn't actually make the scheme work honestly, he had too many investors and the only way to satisfy them was to turn it into a Ponzi scheme as we now understand the term.
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Re: Forever Stamps as an Investment?

Post by KlingKlang » Thu Oct 18, 2018 5:24 pm

sport wrote:
Thu Oct 18, 2018 4:10 pm
If the OP really wants to do this, Costco sells forever stamps at a small discount.
You have to buy them in packets of 100. Plus you get a 2% rebate on your Costco Citi VISA card (in the form of a annual rebate check usable at Costco).

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Re: Forever Stamps as an Investment?

Post by ClosetIndexer » Thu Oct 18, 2018 5:38 pm

JMacDonald wrote:
Thu Oct 18, 2018 7:50 am
Let's say you invest $1000 in stamps and $1000 in the Vanguard Total Stock Market, which one do you think will be worth more in 20 years?
There are plenty of reasons not to do this, but this isn't one. The goal is to provide a low risk inflation hedge, so the appropriate comparison would be a real return (inflation protected) bond, not the stock market.

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Re: Forever Stamps as an Investment?

Post by hicabob » Thu Oct 18, 2018 5:42 pm

PoppyA wrote:
Thu Oct 18, 2018 9:50 am
I just bought $125.00 worth stamps at a collectors show. I paid between 30% and 45% off face value. I love old space themed stamps!
You got a 40% discount for usable USPS stamps? If so that seems like it could be a mini-business.

sport
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Re: Forever Stamps as an Investment?

Post by sport » Thu Oct 18, 2018 6:08 pm

hicabob wrote:
Thu Oct 18, 2018 5:42 pm
PoppyA wrote:
Thu Oct 18, 2018 9:50 am
I just bought $125.00 worth stamps at a collectors show. I paid between 30% and 45% off face value. I love old space themed stamps!
You got a 40% discount for usable USPS stamps? If so that seems like it could be a mini-business.
One problem with this is the low denominations of the stamps. How many three or four cent stamps do you want to put on one envelope? You need to leave room for the address. They might be more practical for mailing packages where you have more space.

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Re: Forever Stamps as an Investment?

Post by 123 » Fri Oct 19, 2018 12:38 am

sport wrote:
Thu Oct 18, 2018 6:08 pm
One problem with this is the low denominations of the stamps. How many three or four cent stamps do you want to put on one envelope? You need to leave room for the address. They might be more practical for mailing packages where you have more space.
If there are too many stamps on a package people begin to think that the sender is some kind of terrorist.
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Re: Forever Stamps as an Investment?

Post by moehoward » Fri Oct 19, 2018 8:11 am

sport wrote:
Thu Oct 18, 2018 4:09 pm
moehoward wrote:
Thu Oct 18, 2018 8:48 am
LOL, who uses stamps anymore? I think I used 2 all of last year.
QCD donations from an IRA account require paper checks to be mailed (unless you want to hand-deliver them). It is possible to have the IRA custodian mail them for you, but it is better to have them send the check to you so you can photocopy it and include other information with the donation.
Donations from an IRA account? That's reason enough to invest in forever stamps.

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Re: Forever Stamps as an Investment?

Post by andypanda » Fri Oct 19, 2018 9:22 am

"Costco sells forever stamps at a small discount"

I didn't know that. I buy a book when I need one from 7-11 or the local Food Lion grocery. They sell them at face value.

I'm sitting here trying to decide what to do with a $100,000 CD I have coming due. I'm trying to envision what $100,000 in stamps would look like in terms of storage space. Would they all fit in a fat-50 ammo can? :)

Let's see, Sam's Club sells a roll of 100 flag stamps for $50, so I'd have to buy 2,000 rolls. Oh heck no. Maybe I'll just blow it all on a nice Allison XB-21 ProSport bass boat. I'm old and I deserve it. :sharebeer

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wander
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Re: Forever Stamps as an Investment?

Post by wander » Fri Oct 19, 2018 10:15 am

I only buy enough for personal use.

Faith20879
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Re: Forever Stamps as an Investment?

Post by Faith20879 » Fri Oct 19, 2018 11:08 am

Today has been a (VSD) very slow day at the office. For the sake of brain exercise, I will participate.

To me, it sounds like an extremely low return "investment", if you call it that.
1. You have to be in it for the long-term to get a meaningful return. If investing for retirement, you are looking to accumulate hundreds of thousands dollars to live on. How many stamps do you have to buy?
2. You'll have to store the huge stacks or coils of stamps in a weather-controlled environment and in a moisture-protected container so that they don't turn yellow or stick together in 10 or 30 years.

Oh yeah and someone before me also mentioned that USPS may not be in business much longer or they could issue new Forever stamps with higher face value when/if hyper inflation hits. There are many reasons could render current Forever stamps a bad investment. To me, the word "Forever" never implies "forever".

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Re: Forever Stamps as an Investment?

Post by mugworts » Fri Oct 19, 2018 4:13 pm

I would not advise this idea. I've bought lower denomination "discount postage" for a decade or more at 40-45% off face value to use in my business. Higher denominations and forever stamps are not sold as cheaply, but are on ebay and stamp auctions often at 10% or so below face value in both large and small lots. It is a great deal if you are buying the stamps and using them, but I would never purchase postage as a hedge against inflation or as an investment.

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tennisplyr
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Re: Forever Stamps as an Investment?

Post by tennisplyr » Sat Oct 20, 2018 7:29 am

Yeah, I just bought a book.
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