Don't Buy Forever Stamps As An "Investment"

By law, “Forever Stamps” won’t save you any money if you’re planning on hoarding them for all eternity, says Slate.

In December, President Bush signed the Postal Accountability and Enhancement Act, which ensures that future price increases will be kept below an inflation-based ceiling. In other words, postage hikes will never surpass inflation–and the forever stamp will never become a good investment. Incidentally, the USPS announced the introduction of the forever stamp less than two months after Bush signed the act into law.


Since 1971, postal rates have increased more slowly than the actual inflation rate, as measured by the U.S. Consumer Price Index. So, despite the numerous rate hikes over the last 36 years, stamps have actually been getting cheaper. The 20-cent stamp from 1981, for instance, would be equivalent to 45 cents in today’s dollars–which makes today’s rate 10 percent cheaper than it was 26 years ago. Should this historical pattern hold, you’d be paying more for today’s forever stamps than you would for any stamp in the future, no matter how high the rate goes.

So, unless you’re into hardcore philately, don’t buy forever stamps. — BEN POPKEN

Should I Invest in “Forever” Stamps?Absolutely not. [Slate] (Thanks to Lyn!)


Edit Your Comment

  1. minneapolisite says:

    If used as intended, the Forever Stamp is not a “scam.” If you buy a package of 41-cent stamps and they up the price by 2 cents next year, you’d need to buy a package of 2-cent stamps just to be able to use your original stamps, which is a hassel. While Forever Stamps will not increase in value, they will save you the hassel of running to the post office every time they increase rates.

  2. ncboxer says:

    Aren’t forever stamps the same cost as regular stamps? If so, why wouldn’t you buy them? I can’t see people buying them as an investment- that is ridiculous. The biggest benefit I see is when they increase the stamp price, you won’t have to run out and buy 2 cent stamps to cover the stamps you already bought. That is a hassle. I still have $.37 stamps. Sometimes, I just double up on them.

  3. ncboxer says:

    @minneapolisite: Darn, beat me to it.

  4. mopar_man says:

    “Forever stamps” ARE the regular stamps now.

  5. JKinNYC says:

    While few will buy them as an investment, some people will hoard these, thinking spending 41 cents now will be better than paying whatever it costs in 2 or 20 or 50 years. Because stamps increase slower than inflation, hoarding will actually be throwing money away.

    Some people need a lesson about the time/value of money.

  6. LintMan says:

    I agree, not a scam. I hate having to worry about stuff like getting 2 cent stamps so I can use my leftover $.39 ones after the price hike. I double up on them if I have to, also.

    All the article was really saying is that it isn’t worth it to *invest* in the stamps, because the value of the investment is now legally limited to less than inflation (and is historically bad in any case).

  7. Ass_Cobra says:

    Aren’t forever stamps the same cost as regular stamps? If so, why wouldn’t you buy them?

    Let’s look at it in the simplest case, 1 stamp. Your alternatives are buy a forever stamp, or place that 41 cents into an inflation linked account. Since stamp prices by law now have to grow at a slower rate than inflation, you will have more money in your inflation linked account than it will cost you to buy any stamp in the future. This is the pure economic argument, it ignores the hassle factors that have been pointed out above. I personally am for high speed low drag living, so the difference in purchasing power in stamp vs. real currency wouldn’t sway me to much. In short, bring on the forever stamps.

    The more interesting question here is how is what is the intent if this jack assed law? The post office cannot grow prices faster than inflation so then it either has to become more efficient or grow revenues off of some other source (expidited delivery?? arbing the income from purchases of forever stamps?). Doesn’t this administration have bigger fish to fry?

    PS. Can we get a tag for “Hardcore Philately”?

  8. Nytmare says:

    The stamp rates have increased 8 times in the last 20 years, at unpredictable intervals. Now with the Forever stamp, I no longer need to limit my stock to just a few months in advance.

  9. DashTheHand says:

    I can’t believe how many people still actually use stamps and snail mail.

  10. bsheairs says:

    Ummm, hold on, people are still MAILING stuff? Ha! Since the “bulk” of my postage was spent on monthly bills, I switched to electronic bill pay through my bank (free service, yeah!). Now, I really only buy stamps when I need to send out Christmas cards.

  11. Amsterdaam says:

    Don’t really use stamps anymore these days, but what if you looked at it in a flat-cash way?

    Stamps Cost X, down the line it will be x+2. Isn’t X still cheaper, or am I a complete idiot?

    so when it costs 1.45 to mail something out, I can still use the stamps I bought for 41 cents. Inflation or not, 41 cents is cheaper than $1.41

  12. JKinNYC says:


    In theory, that’s right EXCEPT, as the article states, stamps increase in price slower than inflation. That means that $0.41 NOW will actually cost you more in real value than whenever inflation pushes it to $1.45.

    Look at it this way. Which is worth more to you. $40 now, or $50 ten years from now. It’s actually the $40.

  13. roche says:

    If you are actually concerned about this, you need to get out of the house more.

  14. KevinQ says:

    That’s what the Slate article is talking about. It’s actually better to invest that dollar in a real investment, because it will increase in value faster than the stamp will. If you put that .41 in a savings account tied to the rate of inflation, then by the time the stamp price rises to $1.41, your investment would have increased to, say, $2.


  15. JKinNYC says:

    Another way to look at it is the price of a car. I believe that when the Model T was released, it cost $300. It still was not cheap enough that families could afford more than one, or in many cases, even one.

    Cheap cars cost over $10,000 now. More people can afford cars. While the price is higher in exact numbers, as a function of purchasing power, cars are cheaper now.

  16. hemaphore says:

    What they need is a



  17. SaveMeJeebus says:

    WTF is a stamp?

  18. mantari says:

    INFORMED! Thanks, Consumerist!

  19. Gopher bond says:

    This guy bought $8K worth of forever stamps.

    Of course, if you have $8K to blow on stamps, whose to question you?

  20. hellinmyeyes says:

    I don’t view them as an investment at all. I pay bills, and I send letters, so I buy stamps ad hoc. I seriously can’t picture someone viewing them as an “investment” or something to hoard. The only reason they were born was to please guys like me who still have $0.37 and $0.39 stamps sitting in the desk.

  21. Amsterdaam says:

    @KevinQ: @JKinNYC:

    Thanks for the help with that one, guys! I see what they’re saying now

    ‘Cause knowledge is power!

  22. CumaeanSibyl says:

    Philately will get you nowhere, it seems.

  23. Any first-year business student could tell you that the Forever stamp is a poor choice. A simple “present value of money” calculation would show you that even facing a price increase and inflation, you’re paying more to send mail with the Forever stamp than you would be to pay the current price.

    After the legislation passed by Bush, USPS is only allowed to increase prices on a schedule and never more than the inflation rate. That right there locks in the Forever stamp as a bad investment, but given that you could only buy the stamps you need and invest the rest of the money you’d intended to spend, you’ll end up way ahead.

  24. minneapolisite says:

    I use the postal service regularly to send thank you notes (please tell me you guys are at least sending thank you notes for gifts and favors!) and event cards. I can’t count the number of times I’ve used two 32-cent stamps to mail a letter because I didn’t have a 5-cent stamp handy. Now THAT sucked.

    Consumerist editorial staff: Thank you for removing the “scam” verbiage from this post. I appreciate your diligence to fair reporting.

  25. Lee2706 says:

    At first, I thought, hey, just buy a pack of forever stamps so I don’t need to bother with the annoying 1¢ and 2¢ add-ons. I didn’t realize the Forevers were tagged to not inflate more than inflation. Thanks for The Info, Consumerist!

    I wonder what other ways USPS will use to recoup some of their operating costs. I know that if our mailman stops taking naps in his truck, perhaps they can streamline things.

  26. mantari says:

    @minneapolisite: Well, scam may be a strong term. It looks like you’re saying that in terms of pure economics, the stamp doesn’t make sense. But in terms of convenience, it does. Correct?

  27. TPK says:

    There is a problem here.

    In the past, notices of increased postage rates have been published well in advance, often several weeks or months. The new Forever stamp makes this a big problem.

    Now whenever there is an announced increase, everyone will buy a bunch of stamps on the day before the new price goes into effect. This will cost the post office millions in lost revenue, as it essentially allows anyone to postpone the new rate for as long a period as they want by pre-buying their stamps right before the new rate takes effect.

    The only way to prevent that from happening is for the Post Office to implement new rates with no prior notice. This would wreak havoc on the business world, and the rest of us as well.

    Am I making up problems here, or is this something they should have considered?

    I agree that using the Forever stamp as a long term investment is not a good idea. But for future rate increases, if your 41 cent stamp today will be worth 43 cents tomorrow, and you know about it ahead of time, that’s an annual return of 1,780%! (.02 return on .41 investment in one day).

    What am I missing?

  28. Gopher bond says:

    Yeah but how are you going to sell enough stamps to make it worth your time? Ok, say you bought 10,000 stamps at 41 cents, that’s $4,100. The next day, they go up to 43 cents. So now your 10,000 stamps are worth $4,300. How do you sell 10,000 stamps? Stand outside the Post Office? Advertise? Why would I buy from you when I can buy from the Post Office? You’d have to sell cheaper, like 42 cents. All that work for $100?

  29. SOhp101 says:

    hardly a 1,780% annual return… you’re assuming that it will increase 2 cents every day which is never the case.

    The best thing about forever stamps is that they will actually save money for MOST people in the long run… almost everyone I know just ends up ‘doubling’ their stamp use (putting on two 39 cent stamps instead of actually buying a bunch of 2 cent stamps).

    A lot of people are complaining that this is the worst investment to buy, which it is IF you think you’re actually investing. If you’re buying stamps solely for the purpose of mailing letters it will be way better to choose the forever stamp since it costs EXACTLY the same as a regular first-class stamp and will save you that extra two cents that you’ll spend in the future for being an idiot and not bothering with the forever stamp now.

  30. humphrmi says:

    I note that, according to this post’s headline, forever stamps are now no longer a “scam”.

  31. Nytmare says:

    @TPK: I also wonder how that’ll work. But this initial forever stamp had a one-month price lead on the rate increase — maybe they’ll do something similar for future increases.

  32. Gopher bond says:

    The only benefit for the forever stamp is convenience. The funny thing is I bet there are thousands of people out there scratching out their get-rich schemes on this. Oooh, I’ll buy 100,000 stamps right before the price goes up. Now I’ve got 100,000 stamps that just made me a cool $2,000. Profit!

    Except now you have to sell or use 100,000 stamps in less than a year or the $41,000 you just spent would have made more money in a savings account. Seems pretty risky.

  33. lihtox says:

    @TPK: I have heard that the 2 cent make-up stamps cost the post office more than 2 cents to print. With the forever stamps, they will probably save more money from not printing those 2c stamps, than they will lose from people using cheaper stamps.

    Also, they can probably predict, after any given increase, how long it will take until most people are using the higher-priced stamps, and budget accordingly. Few people are going to buy $100 of forever stamps at one time just to save a few pennies on postage.

  34. @RowdyRoddyPiper: “PS. Can we get a tag for “Hardcore Philately”?”

    Heartily seconded!

  35. sgtm7 says:

    Like several other posters have mentioned, the reason I will get them, is because normally when the price increases, I end up doubling up my stamps, rather than going out and buying a 2 cent stamp.
    I did get annoyed when I received a jury duty notice and questionairre. The envelope enclosed for the return of the questionairre was not pre-paid postage. I put a 39 cent stamp, and taped two pennies along with it.

  36. notallcompaniesarebad says:

    @TPK: That is the head of nail. However, due to the lack of a liquid secondary market in non-collectible stamps, I don’t think this opportunity is as great as the returns make it sound. For instance, if you need to unload a thousand dollars of stamps, who is going to pay face value for them?

  37. Gopher bond says:

    It’s like buying anything else. Would you buy $1,000 worth of tube socks because you saw that the sale was over that night and the price was going to jump 3 cents tomorrow? Of course you wouldn’t because you’d then become a sock seller with a terrible profit margin. You should probably be locked up in a mental institution if you think that’s a good business plan.

    I just had someone in my office comment on the guy who spend $8K on the stamps. He called it a “smart move”. It really illustrates the “sucker born every minute” aphorism.

  38. Trackback says:

    Now that the U.S. Postal Service increased stamp prices and began offering the “forever stamp” last week, people can avoid the hassle of going back to the post office to buy “upgrade stamps” when the prices increase. The law that allows the forever stamp also indicates that…

  39. Morton Fox says:

    Since I’m into Postcrossing, what I really need is a forever stamp for the international postcard rate, which went from 75 cents to 90 cents (20% increase!) in this most recent rate hike.

    By the way, I know someone who still has 34-cent stamps.

  40. barbarareller says:

    OK. I get it. Buy a “forever stamp” and you don’t have the inconvenience of buying an additional stamp when the next price change goes into effect. However, that’s .41 for the first ounce. Each additional ounce has gone from .24 to .17 cents. Try to buy .17 stamps. You can’t. The postal service hasn’t issued them yet. You have to buy .15 stamps + .5 stamps + .2 stamps. Oh, BYW postage for oversized envelopes (e.g. 9″ x 12″) used to be the same as for regular-sized envelope. Now, you’ll pay .80 for the first ounce. Anybody know how much each additional costs?

  41. Jasmo says:

    am I the only one here who just tacks on an extra stamp if they are unsure if the stamp-in-hand is sufficient? I’ll gladly pay an extra twenny cents to avoid the mental gymnastics outlined above. This is the same society that regularly pays >3$ for a latte-chino every morning … who are we kidding here?

  42. krunk4ever says:

    I blogged about this a day or 2 ago, and mentioned an interesting way to actually make it a good investment:

    However, lets take a step back and look at the investment plan. The plan may actually work if you’re precise. If you were to purchase a whole bunch of forever stamps right before the next raise (let’s assume 41¢ to 43¢), meaning to purchase it at 41¢ and sell them at 43¢. If you could sell them all off in 3 months, that’s a 19.5% APR. So an $8,000 investment in 3 short months have become $8390.24. Of course this is assuming you can sell it at face value and so on.

  43. krunk4ever says:

    I also mentioned:

    However, the forever stamp is an excellent idea and although it may be a less than ideal investment plan, the idea behind it has been long due. It would certainly make life easier as you wouldn’t have to go to the post office and purchase 2¢ stamps immediately after a raise. It’s definitely a lot more convenient to the consumer. Like right now, I have 3 39¢ stamps left which probably won’t be used until I have to mail a letter that’s more than 1oz, or the next time I drop by the post office to purchase some more 2¢ stamps, which hardly ever happens as the post office is a crazy place I tried to avoid at all costs.

  44. kingoman says:

    the fact that they even asked the question just shows you the intelligence of the average Slate reader. The fact that Slate chose to spin it as a scam exposes their writer’s agenda.

    A scam is when you’re told something is a good investment when it is not. Nobody (from the Post Office) ever told anybody that the forever stamp was an investment at all, much less a good one.

    Talk about creating a story out of nothing, geez. Are they that desperate for copy over at Slate?

  45. krunk4ever says:

    @kingoman: Actually, Consumerist were the ones that decided to spin what Slate said. Just look at the title and the 1st sentence:

    Forever Stamps Are A Scam

    By law, “Forever Stamps” won’t save you any money, says Slate.

    First of all, the word “scam” and the phrase “save money” never appear in the article. All the article talks about is the absurdity of some people wanting to invest in “forever stamps”, which to be honest, did cross my mind, however after simple calculations and later on this article further solidified, was in fact a bad investment choice.

    Consumerist decided to take this article and spin it to make you believe that Slate said these stamps are a scam and won’t save you money.

    I honestly question if the author of this Consumerist piece actually read the article…

  46. swalve says:

    Pfft. Reading links is SO “Web 1.0”.

  47. kingoman says:

    @krunk4ever: you’re absolutely right, my bad. I didn’t actually go read the article, either, I sort of assumed the summary here was at least *close* to what the article was about. I won’t be making that assumption anymore!

    Read it and it’s quite clear they’re only answering a question asked by a reader. I have been quite unimpressed with articles I’ve read at Slate in the past, so I assumed this was just another one. My apologies to Slate for my comment.

    And jeers to the Consumerist for the spin in the headline (which I see they’ve changed since).

  48. Anonymous says:

    The forever stamps go up about 4.5% on 11 May 2009 which means that if you use stamps it may or may not be to your advantge to buy them ahead of 11 May. Assume that you plan on mailling a lot of Christmas cards and that is your most signifigant use of stamps in a year. If you buy them before 11 May you save 4.5% on your Christmas 2009 stamps. Buying them in say November 2009 is about 6 months or 1/2 year later. A 4.5% discount over what you would have to spend in 1/2 a year is more like a 9% return. Some people say just put your money in a CD. Well, since you are not taxed upon the gain for having bought the stamps early. If you are in say a 40% tax bracket including state and federal then the taxable gain on a CD equal to the 9% you would get buying your Christmas 2009 stamps in May would need ot be about 15%. Assume 25% federal and maybe 5% state for 30% and you would still have to earn over 12.5%. But does it make sense going forward. Assume a 1 cent increas in summer of 2010 and figure Christmas 2010 stamps. That is 6.6% increas over 1.5 years or 4.4% annual which for 40% tax bracket about equal to a 7.33% taxable CD rate. Of course if stamps go up 2 cents again in 2010 then the numbers are 8% over 1.5 years =6.5% or equivalent in a 9+% taxable CD. Then there is the convience of forever stamps but also the need to keep up with them….. What I find curious is the that the same folks who complain about the cost of stamps going up can also do the analysis and say that it is better to put money in a CD because stamps do not go up as fast as inflation. If you say that it is not worth buying forever stamps as an investment then at least admit that the USPS is actually efficient. Of course you might not think so if a letter failed to show up but I believe that the USPS actually does a pretty good job of getting the mail through. For me, I’m buying about the number of forever stamps I’ll use in the next 3 years because after that I retire and should drop closer to a the “taker vice giver” side of the income tax equation.