What is the 12% “Phi Account” teased by Unconventional Wealth?

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I’ve gotten quite a few questions lately about this “Phi Account” teased by Unconventional Wealth, so we’re going to take a quick look at it today.

And no, we’re not going to hold it against Aaron Gentzler that the ad starts out with the threat that the stock market would have incredible single-day losses on January 2 … that would be unfair hindsight, and I think we all knew that the “Fiscal Cliff” stuff presented risks that there could have been some very bad news on that day (instead of the “kind of good” news that we did get, spurring the market higher).

(Gentzler, by the way, is the editor of this newsletter … apparently they’ve now jettisoned Andrew Snyder, who helmed it for a while — Unconventional Wealth has been through a few name and personnel changes since I last wrote about them.)

So here’s how the ad gets us interested:

“Now available to yield-hungry investors…

“The 12% ‘Phi Account’

“This unique investment has gone up every year since 1950 without touching the stock market.

“Since the 19th century, everyone from queens to mechanics has used this kind of ‘account’ to build their fortune — and now so could you. You could earn 12% per year without the risks of stocks, bonds, gold, oil or any other traditional investment.”

Yes, we’ve all been around for long enough to know that when a copywriter puts something in quotes it means “not really.” So these aren’t just normal “accounts,” I’m sure, but that doesn’t mean we don’t want to know the details.

Here’s some more of the spiel:

“Since 1950, the majority of ‘Phi Accounts’ have never earned less than 5% in any year.

“And since 1998, they’ve gone up 12% per year.

“Even better, ‘Phi Accounts’ have nothing to do with the stock market….

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“where do you sign up for a ‘Phi Account’?

“Don’t call up a broker, that’s for sure.

“The ‘Phi Account’ is not what you would call a ‘mainstream investment.’ Regular stockbrokers aren’t authorized to trade it.

“In fact, it’s safe to say most brokers have never even heard of it.

“Only a few small firms around the world have the expertise and experience to run a ‘Phi Account’ successfully.

“The company behind the 12% ‘Phi Account’ has been around since 1846. It even holds a royal warrant.

“It’s one of only 850 in the entire world — and it means the company is a preferred business partner of the monarchy.

“That’s right. The queen has a ‘Phi Account.’

“Queen Elizabeth, the longtime head of the British royal family, opened her ‘Phi Account’ in 1956.

“And while the queen won’t disclose her gains, it’s interesting to note that the crown jewels, and most other royal assets, technically belong to the people.

“Not the queen’s ‘Phi Account.’ It’s privately held on the tiny Channel Island of Guernsey….

“Phi Accounts” have nothing to do with stocks, bonds, ETFs, mutual funds or options. They’re not subject to government manipulation or the whims of the Federal Reserve.”

So what are they teasing?

Well, according to the mighty mighty Thinkolator it looks like they’re pitching rare stamps … and specifically, this sounds like the rare stamp investment “accounts” offered by Stanley Gibbons in the UK (Stanley Gibbons is indeed a royal charter company, and the royal family has had a few avid and successful stamp collectors over the years … though I have no idea whether or not Queen Elizabeth’s relatively modest personal collection is kept in the Stanley Gibbons vaults in Guernsey or not). And yes, Stanley Gibbons actually started in 1856, not 1846 … and the Queen apparently started her stamp collection in 1852 from what I read, but I suspect those are either intentional errors to throw off the mighty Thinkolator, or differing interpretations.

Stanley Gibbons has set out recently to turn rare stamps into a real alternative “asset class” comparable to gold or equities or real estate — they offer a number of different investment accounts, and some of those accounts, which are basically managed accounts that invest in baskets of rare stamps, are guaranteed by Stanley Gibbons to not lose money. In exchange, Stanley Gibbons does not charge a management fee but presumably they do earn something like a “commission” on the spread between buy and sell prices on the stamps, and they also earn a share of the investment returns over time — so if you hold the account for more than five years Stanley Gibbons gets a hedge fund-like 20% of the profits when you sell (percentage is higher if you sell earlier). I have my qualms about whether the folks who invest $500 a quarter with Stanley Gibbons are going to do as well as the investor/collectors who commit far more money, but that’s not based on anything I know — just a worry.

That all sounds fine and dandy, but it’s also pretty opaque — prices, including historical price claims, are based on the Stanley Gibbons catalog prices, and I have no idea which stamps will become more valuable over time so I certainly wouldn’t want to get involved in selecting stamps myself (that’s one of the options) … but I also don’t know how their account management works, and whether they have conflicts of interest in who gets the “best” stamps in their account. Probably some of that information is knowable if you research it further, it’s not the sort of alternative that I’m particularly interested in but it is, at least, a pretty uncorrelated investment in collectibles — we’ve seen this pitched before by Steve Sjuggerud over at True Wealth, who has a soft spot for alternative assets and collectibles in general, and I’m sure there are some stamp enthusiasts out there in Gumshoedom who know far more about it than I do. It may continue to be a useful way to diversify a portfolio for many people, but it’s not my cup of tea.

You can see the investment presentations from Stanley Gibbons here if you’re interested in learning more, and there’s a good critique here that was published in The Guardian a couple years ago that might help to give you more reasonable expectations.

The “guarantee” of the value of your stamps that they offer for some accounts is, as far as I can tell, backed by Stanley Gibbons itself — so you have to count on them continuing to exist (they’re also publicly traded, the stock has done well in recent years), as well as their ability to back all of the accounts of investors to meet that “won’t lose money” guarantee should the rare stamp market take a tumble for whatever reason.

And the big picture, of course, is completely unknowable: Rare stamps will continue to be rare forever, but will wealthy people continue to want to collect the rarest of them, and will modest investors continue to upgrade their collections to get better and better stamps, creating a rising market for these little pieces of paper over time? That has apparently worked pretty well over the last 100 or so years … whether it continues for a hundred more (or ten more, or 20), is a question you’ll have to answer for yourself.

So there you have it — Phi Accounts = rare stamps. Interested? Think it’s crazy? Let us know with a comment below.

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44 Responses to What is the 12% “Phi Account” teased by Unconventional Wealth?


  1. I’m a member and we’ve gone from good solid stock picks to buying papier-mache Santa’s being sold at flea markets and now stamp collecting. Go figure, this is as bad as Herve Villechaize demanding a million dollars an episode for this “starring role” on Fantasy Island. Maybe that’s the answer, maybe I’m on Fantasy Island. Listen can you hear the music?
    http://www.youtube.com/watch?v=1x_QbVDlLbI

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  2. Steve Lombardi, please lighten up. Travis got notified of something being hyped, then analyzed it, and it turned out to be a comapany that deals in stamps (collectibles). When you say we have gone from good solid stock picks to stamp collecting; that’s not Travis’s fault, he was asked to smoke it out and that’s what was there. This is the best service for the cost on the internet, and I hope travis is always open to smoke out whatever is hidden behind the smoke screen.

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    • As you can see “Blackwater” I use my legal name. You missed my point. I wan’t picking on Travis, I rather enjoyed his article. I was poking fun at UW, of which I’m a paying member. I was telling Travis where the UW has been and is heading. Re-read my comment and you’ll see.

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  3. Travis if you look back into the ownership and history of Stanley Gibbons you’ll find the name of a legendary investor from New Zealand called Sir Ron Brierley….Sir Ron started of in the 1960s investing in many money making companies in both Australia and New Zealand. He’s pretty much retired now and lives still in Sydney, but he figured out that to move money across borders years ago during times of restricted money movement (still the same today) why not buy a valuable stamp (easy transportation) in one country and sell it in another…the next logical step was to buy the price setting business Stanley Gibbons, thereby establishing a price guarantee in many countries. This was just one of many little tricks used over the years, Sir Ron was our Warren Buffett

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    • As we say in the south. You just hit the nail on the head. A rich investor had a bunch of money to move and protect so he went into the stamp collecting business. Being very wealthy he could afford the most collectable, therefore pretty well guaranteeing his money would be safe until he could move it and cash out. But Stamps as with any other collectable’s value depend on current value, estimated future value, and collector participation in that market in the future. There is no guarantee that any collectable will make profit and if it does, it will never (or at the least rarely) be a short term deal. I’m not saying that there is anything wrong with it. I’m just saying that (1) it is with rare exceptions a long term thing and (2) NOBODY can guarantee you a profit for very long and I suspect that that will change. Again, I’m not bashing stamp collectors. I just know that I can research and make a decision about other investments and get out at any time without having a mandatory waiting period and penalty if I want to unload a loosing trade. To me. That makes better sense.

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  4. Rare stamps and rare coins are like buying property. For property it’s all about location. For these items it’s all about rarity, quality and demand. Usually the rare items that eventually turn a profit are those that are very expensive to begin with.

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    • Good god Ron, 28% tax on collectibles, and heres me thinking the robbing bastards in the UK were harsh,. time you had your own little revolution mate, 28% you dont need a gun to commit robbery, join the IRS.

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  5. Also be aware of the tax consequences of collecting stamps for a profit. From the IRS website: “‘Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate.”

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  6. SG along with sister company Paul Fraser offer real and valuable alternatives to stocks. It is not just stamps but from a rare Ferrari, famous autographs and such as gold and silver coins from Elizabeth 1 and so on. The risk is that the rare ‘something’ you have bought receives a hit as a metal detector or old archive of books suddenly throws up numerous similar items in similar condition. I am on the edge to invest and diversify but have not jumped yet. There is a request to divorce from Henry V111 to The Pope at well over 100,000 sterling but I guess in the end it is solely based on supply and demand! I believe they both offer 120% guaranteed return as a minimum over five years on certain rare items. I am a Brit and would trust Gibbons and Fraser having known SG for over 60 years.

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  7. Of course, I should have guessed! The ‘Phi’ of Phi Account is obviously an abbreviation for philately.

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  8. With stamps,as with most collectables,there’s the “book value”-what the seller says it’s worth according to whatever guide they’re using when you acquire them,& there’s actual price that you get when you go to sell them. It’s ALWAYS lower than what the guides say the value is,often substantially so. Stamps are a nice hobby,I’d be very wary of them as a serious investment . You pays your money & you takes your ride.

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    • Little known facts about USPS.
      They are forced by law to fund their pension obligations with US Treasury Notes. Only. Amazingly enough, they have put enough away that the USPS pension fund is fully funded.

      They are forced by law to deliver spam at ruinous loss. By law. Direct marketers bought leverage over USPS monopoly and had rates pushed down to almost nothing.

      They are completely unionized.
      Thanks to the writers for expounding on the stamp biz. All new to me.

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  9. Trading rare stamps is no different than coins with the caveat that the market for coins is much broader than stamps. I use to collect stamps but only as a hobby. I loved stamps with maps, ships and nudes. Up until about the 60′s or 70′s it was dignified. The US use to only have 1 new issue per month. The subjects were historical and important and the competition to have one choosen was high and the engravings were of the highest quality . Then as post offices around the world realized there was real $ to be made they started to print every silly ass stamp imaginable and in the millions. At that point I quit . It is hard to imagine that there will ever be “rare stamps” in the future from the present era.

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  10. No asset class has gone up in value faster and in greater percentage gains than domain names. Since picking up steam in 1995, the internet has created hundreds of mega millionaires who bought early and flipped names like, business.com, realestate.com, cars.com etc. There is a weekly list of domain sales at DNJournal.com (note: I am not affiliated with this site in anyway) but quite an eyeopener so see what high quality, high type in traffic domains sell for. Sex.com sold for $14,000,000 a few years ago to give you an idea.

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  11. I have collected worldwide stamps off and on for over 50 years. The gentlemen who mentioned today’s stamps are not worth collecting is correct. US stamps in particular are like confetti. I haven’t done much with them for 15 years. However, I used to buy a lot of old US stamps on ebay. I never paid more than 20% of book value. I always bought mint if the price was right. Book value is an inflated number.

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  12. Speaking of stamps – not their collectability, just their existence – I’ve always joked that the way US stamps have increased over the last few years, I should just buy 5,000 books of ‘Forever’ stamps and hold them as an investment. Clearly, not a great plan, but I’m pretty sure one of these newsletter guys could sell it, eh? We’re pretty sure they’ll go up, and that there’ll be a market for them.

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  13. When buying a collectible always check the bid and asked price. With stamps my guess is that there is an unacceptable gap between bid and asked. When a market is efficient and fair the bid-asked spread is tiny. This is why I avoid stamps and rare coins. Typically at the instant you buy a coin your net worth decreases by an amount equal to the bid-asked spread because net worth is based on liquidation value, namely the bid value. Caveat emptor!!!

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  14. Some comments on stamp investing:
    These need to be relatively long term investments because you pay a hefty commission when you buy, and again when you sell (could be around 20%) – so the items have to appreciate significantly just to break even. Investment grade stamps must be top quality only. Frequently they are graded as ‘superb’ – this refers primarily to the centering of the image. They want large margins around the image (some old items may not be available in this state however) – usually the larger (‘fatter’) the better. Be certain the perferations are crisp, and flawless – nicked perfs cause significant reductions in value. Be careful of minor imperfections in the body (i.e., tiny rips or holes that have been repaired are not easy to spot). If the stamp is mint (never used) the gum on the back must be in great shape. Be careful of ‘regummed’ stamps – hard to detect efforts to make a flawd gum stamp look good. In any case, the stamp should have a certificate of authenticity from the philatelic society. If it does not, you will have to submit it for that certification, pay a fee, and wait for it to be processed and hopefully approved (better to buy only certified items). Then, good luck – hope your pick does well. Keep them safe in a low moisture conrtrolled environment and avoid the temptation to take them out to enjoy them – each time they are handled, they can be damaged.

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  15. Collecting stamps can be fun, but I’m not in this to have fun, it’s to make money. But for those of you who are I will sell you stamps. Just send me $1.45 for as many stamps as you want and I’ll show you how to do what the post office can’t. I’ll even start a pension fund with half the revenue. Any takers?

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    • Okay, Steve, I’ll take your teaser deal, if you’ll reveal how to fix the post office. I’ll bet even Travis can’t discover the answer to that question. Where do I send my $1.45?

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      • OK, Steve doesn’t seem to be interested in your offer. I only want your $1.45 if you can get the rest of the Gumshoe readers to contribute but I got an idea of how they can at least start to fix the USPS. Did you know that of all of the carriers out there, the USPS is the only carrier that by federal mandate is required to service every address in the country? That means they have to go to each house, no matter how remote and what pig trail they are on to make delivery. Now how much money would they save if those remote areas had a central location for mail delivery and when farmer Brown went to town he could just pick up the mail while there? Fewer delivery vehicles, less gas, less miles, and less up keep = more profit potential. Answer= Get the government out of the postal business.

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  16. Am retired Post Office worker and love beautiful old stamps and on rare occasion would see letters or packages plastered with gorgeous old stamps and would comment to the sender that they may be valuable and the answer was always the same “They are worth more as postage than the dealers offer me.” Collected comic books for two years and found the prices in the catalogs were roughly twice the price a dealer will give you. Nice article, Travis.

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  17. There are more “regummed” “de-inked” stamps in the collector market than with which you can afford to “buy and then die”. I speak with the authority of several families’ generations of stamp collectors. Stamps minted by the millions after the 1930s are worth only their face value. Collect stamps for fun with the kids, sharing geography and historical themes looking at a map of the world, but DO NOT start investing in stamps in the 21st Century. It wouldn’t be an investment, only an uninformed, stupid speculation on your part. NO EXCEPTIONS. There are several other get-rich bagholder schemes you can enjoy. Stamps are not something you’d enjoy, being cheated beyond your imagination, to the loss of all your mis-spent funds.

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  18. I was an avid stamp collector in the 1940′s. Today, I can buy on e-bay US stamps from
    1930 or earlier for less than their 1940′s cost. Isuues since 1950 are generally junk. Mint US issues are now sold at a discount from face value!, Net: Collecting older stamps is a fun hobby, but a dying one. Go to a stamp show. 95% of the prospective buyers are 60+ years old. Old stamps have no intrinsic value; folding or wetting them can halve what value they may have. A terrible investment!!!

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  19. You keep giving me this bullshit I’m done reading
    Your crap. You wanna collect that with your kids for a hobby, fine!
    You can buy 1000′s of them for a buck in the back of comic books.
    I’m here to make money today, and I don’t have cash to buy Renoirs
    And Rembrandt’s. Is this the only way you can market your newsletter?
    I’ll read stock gumshoe for free just to laugh at what you advertise. The others are just as funny. Buy the property that the govt is going to buy from you when they put the new super hwy in, and find out where the next bridge is going to be built and go beat the crap out of the person that lives there and buy their property. Stocks are really becoming a joke. Collecting coins and stamps And Rembrandt’s !

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    • Well I’m not familiar with stamp collecting so any comment in that area would be unfounded, however, being a drummer, I can attest seeing K Zildjian Istanbul intermediate stamp cymbals, three I purchased back in the 80′s for 150.00, one 18″ ride bidding at 1400.00 with six days left only proves one man’s junk is another man’s treasure.

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    • Harold: Who are you upset with? Stock Gumshoe or Unconventional Wealth?
      All that Stock Gumshoe was doing is pointing out the ridiculous scheme that Unconventional Wealth was hyping.

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    • Harold, this may piss you off as well but you’re way out of line here. If you took the time to read the article I would refer you to the lead in. It goes “I’ve gotten quite a few questions lately about this “Phi Account” teased by Unconventional Wealth, so we’re going to take a quick look at it today”. People asked questions about a tease that was offered up and Travis responded. Obviously there were enough questions that he felt obliged to respond. There have been several issues that I didn’t care for but to say that all you keep getting is bull s–t is going off the deep end. If you don’t like what you see. Just don’t participate and move on. I’ve not read any place that said this is Harold’s personal advisory page and anyone else with other interests can just shut up. Accept it for what it is. An open forum for discussion and investigation into teasers that members ask about. No actual personal investment advice is offered here.

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  20. I signed up to Unconventional Wealth 4 days ago. Their website has been down continuously since that time. I will try and contact them by phone. If no joy I will need to involve my Credit card Company

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  21. This reminds me of the chinchilla breeding investment my parents got involved in. Add that to the list of “uncommon” investment opportunities that went bust. There is no limit to the number of “uncommon” schemes these people can dream up to separate you from your money.

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