A Penny Saved is Two Pennies Earned
With zinc prices on the rise, it now costs 2 cents to manufacture a single penny. Similar ratios exist for the production of nickels. Don’t bother trying to melt them down and sell their constituent parts, it’s illegal to do so as of December 2006. In the meantime, while this law is on the books and the mint refuses to stop making these coins at a loss to the taxpayer, the proper course of action is to hoard them. You are giving away money if you don’t.
Imagine for a moment that you took your entire life savings and converted it to pennies. You have instantly doubled its value - and it will continue to earn as copper and zinc prices increase. Whenever the mint gets around to nixing these coins, it’ll eventually be OK to melt them down as they are abandoned as a form of payment.
If you had converted all your life savings to pennies in 1982, you would have made 500% on that investment to date - 6.7% return per year. This is based on a commodity rate of copper alone. But the penny wasn’t under-valued by 50% in 1982 like it is today. Over the next 25 years a penny savings plan will earn you an initial 100% just on a decision to hoard and then 5-7% per year as the metal increases in value. This is equivalent to 9.7% return per year. Of course, you’d want to realize that initial 100% increase and sell the pennies at the earliest possible moment, so hopefully a shift in policy would occur before the 25 years passed.
If you’re not going to convert, at least stop giving them out as payment. Save them all!
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