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A Million Pennies Saved, Nothing Earned

Contributed by mm | July 4, 2004 6:45 PM PST

This interesting Reuters story described a man who accumulated one million penny coins over 30 years and failed to cash out now.

My first reaction is this man is really persistent: accumulating one million coins over 30 years equals to 91 coins per day, which is several times more than an ordinary consumer will normally get even if he/she pays everything using cash.

I can understand no financial institution is interested to help this poor man getting rid of this 3.6 tons copper pile. It will involve at least several hours of employee work, not to mention the logistics of getting the penny mountain deposited into the local Federal Reserve Bank (otherwise this $10,000 will be dead money for the bank -- how many times a customer will ask a bank to exchange dollar bills to pennies?).

Ron England can also try out Coinstar, which provides a coin counting service with a 8.9% fee (the service is available at many grocery stores). Coinstar's new service, currently available in Seattle, Las Vegas and Philadelphia, charges no coin counting fee but converts all the balance to a Starbucks card. (In this way, Ron can have one latte per day for more than ten years.) With some luck, Ron can probably strike a marketing deal with Coinstar to get cash without coin counting fee.

Anyway, it is never a good idea to save money in the physical form: one loses the potential investment income (i.e. interest or capital gains), risks accidental loss (no FDIC insurance for example) and in Ron's example, suffers lack of liquidity.

Source: Tax Guru-Ker$tetter Letter

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