There is a reason you want the Your Smart Money Moves blog by your side. Over three and half years ago, I wrote you a blog about buying forever stamps. Did you take advantage of my advice? With any overall financial plan, the one silent killer people often leave out is inflation. Especially when it comes to the actual cost of buying your basic staples like groceries, gas, and utilities. While there has been a substantial increase in business being done on the internet, the United States Postal Service (USPS) will raise prices effective January 26th, 2014 to 49 cents for the first ounce of a first class stamp. This would essentially be a 6.5% increase. Bulk mail is also going up by 6% and with a raise to 33 cents, postcard will be up 10% versus 3 ½ years ago.
How can you make a smart financial decision? Load up on Forever stamps! Issued in 2007, the first forever stamp was worth 41 cents. If you had bought $1,000 worth, you could resell them next year for $1,195 a nearly 20 percent rate of return on investment. According to USPS, there is no law against reselling your stamps to someone else. “We have no control over the pricing policies of private entrepreneurs, companies or agencies who resell our products. A charge at a higher price is most likely imposed to earn a return on their investment of capital and effort. The prices they charge are, no doubt, established on the basis of their needs and market evaluations.”
According to the Postal Service, losses from the recession will approach “40 billion” and the extra increase above the normal 1.7% cost of living adjustment is necessary to help make up that deficit. The Postal Service believes it will add an extra 4 billion a year in revenue from this change.
A smart investor understand where there is opportunity. In this situation, you would be able to make some immediate return on your investment just from the change in prices. If the U.S. Post Office is losing this much money, then wouldn’t it make sense that in a few more years prices will rise again? Or, will you be getting mail three days a week? What we do know is that you cannot deficit spend forever and until you can beam a letter or magazine into your home (c’mon Jeff Bezos) then people will be using stamps. So make a ‘Forever’ smart money move and go to www.shop.usps.com to learn more.
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