Sunday, November 18, 2012

Perfect Investment: 2.2% for Two Months US Government Guaranteed

If you were offered an investment that pays 2.2% in two months, and the investment is guaranteed by the Federal Government. Plus the return is tax-free. As a matter of fact, you investment may be entirely deductible. Do you think this would be the perfect investment? Here are some other characteristics.

1. Almost 3% average annualized return over the long term on your investment
2. Protection against inflation
3. Can be considered a short term or long term investment
4. Guaranteed by the United States Government
5. Very low minimum investment
6. An easily transferable bearer investment with no registration required
7. The investment will never go down in value

If you haven't figured out what this investment is yet, it is the Forever Stamp, the stamp issued by the United States Post Office that is used to purchase one ounce of postage. It doesn't matter how high the price of postage rises, even if the postage rate goes up to $50 an ounce, you can still use this stamp for one ounce of postage. The price of first class postage is scheduled to rise on January 27, 2013 from 45 cents to 46 cents. The increase is only a penny but it still works out to a 2.2% increase a couple months from now.

Postage used to be 39 cents an ounce in January of 2007. If you look at the increase in the cost for one ounce of first class postage over the last several years, it works out to an average annual increase of about 2.9%. And since 1970, the average annual increase in the price of postage is 4.9%. (See chart.)

You can still buy these Forever stamps and take advantage of this 'investment'. Over the long term, postage rates will continue to increase, especially with inflation. If you still pay many of your bills by mail, or you have a small company that does mass mailings, or you are with an organization that sends out printed monthly newsletters, then maybe it would be make sense to purchase these stamps before the rates go up.

If you do any international mailing you should also be aware that the Postal Service will introduce a First-Class Mail Global Forever Stamp, which will allow customers to mail letters anywhere in the world for a fixed price of $1.10.

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