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people already know about the cost of smoking as it relates to health.
By now, nearly every adult in the U.S. who smokes has heard
that smoking often leads to such things as cancer, emphysema, reduced
lung function, etc., etc. I would also hope that most people
who smoke are also aware that it makes your clothes stink, your house
stink, your car stink, so on and so on. But I'm not really
here to talk about those aspects of smoking. This is, after
all, a financial article; so, let's talk about the financial cost of
smoking. This is a cost of smoking that many smokers fail to
really consider. Yes, oftentimes smokers realize that it is
expensive to come up with the money for pack after pack of cigarettes
day after day, but they still fail to consider the long-term financial
cost of smoking. Worrying about how to pay for the next pack
of cigarettes is short-term thinking. Worrying about how much
of your financial future those packs of cigarettes are costing, is
long-term thinking. People who are wealthy, or are well on
the way to becoming wealthy, tend to think long-term. For
more on this, please read the article Do
You Think Like a Wealthy Person?
Let's take a look at what smoking
really costs in terms of dollars:
this example, we will use $5.50 as the average cost for a pack of
cigarettes. We will also figure that the average smoker
one pack per day.
$5.50 per day gives a
of $165.00 spent on cigarettes. If , instead of spending it
on cigarettes, you were to just save that
$165.00 every month in a cookie jar where it earned no interest
whatsoever, you would have the following:
in five years.
$19,800 in ten years.
in twenty years.
And don't forget, this
was without earning any interest.
Just for the fun of it, let's put
the money into a decent Broad Market Stock Fund earning an average of
10% per year, which is a reasonable, historical average. Here's
$12,777 in five years.
in ten years.
$125,295 in twenty years.
You could possibly pay your house off completely in twenty years with money that would otherwise have been spent on smoking.
if you don't want to wait twenty years, think about what you could do
if you had $12,777 to spend as you pleased every five years.
Imagine having $12,777 to put toward buying a car every five years.
suggest that most smokers have taken up the habit by the age of
eighteen. Just for the fun of it, let's look at what happens
if, instead of buying cigarettes,
that eighteen-year-old decided to invest that money in a decent Broad Market Stock Fund, and let's have him do it until
retirement at the age of sixty five.
That gives him
years of earning an average return of 10% per year.
At the time this teenager retired, he would have:
Over 2.1 million dollars!
now that you are aware of how much cigarette smoking costs in the long
term, let's talk about some practical advice and strategies.
Who says quitters never win?
realize it is very, very difficult to quit smoking completely.
you can muster the determination, strength and discipline to quit
smoking completely, I highly recommend you do so. And don't feel
badly if you have tried to quit in the past and 'failed.' Current
statistics suggest that people who managed to give up smoking
completely had quit an average of 15 times before accomplishing their
goal of quitting forever. So don't think of quitting smoking, and
then falling back into it as failure--think of it as practice!
Quitting smoking is not an easy task, but it is certainly a
worthwhile one. Not only
it help you financially, but statistics show that after you have been
smoke-free for ten years, your risk for smoking-related diseases drops
to almost that of a non smoker. And if you have kids remember
that, statistically, the children of smokers have an 80% chance of
taking up smoking themselves. So if you can, quit smoking and
start putting that money into savings where it can grow. Like
said, if you don't want to wait twenty years or more for your financial
reward, then just take out the eleven or twelve thousand dollars you'll
have every five years and go spend it...have fun...that's part of your
reward for quitting.
let's get realistic and say that you can't quit completely. I
have met many smokers who say they can't quit, but I have yet to meet
one who says that he couldn't cut back if he wanted to.
every other time you pulled a cigarette out of the pack, you slid it
right back in and just waited for the next one. In other
hold off as long as possible between cigarettes and try to get yourself
down to half of what you were smoking. In our example, that
be half a pack per day or $82.50 per month. If we save that
into a Broad Market Stock Fund earning a return of 10% we get this:
in five years.
$16,899 in ten years.
in twenty years.
this from just cutting down to half of the cigarettes you would
normally smoke. So, even if you can't quit completely, by
down you can still have around $6,000 to spend any way you want every
Now, what if you are really
weak when it comes
to cigarettes? What if you can't even cut down to half?
Well, do you have the discipline to make sure that there is
cigarette left in the pack at the end of the day? We're
about giving up only one cigarette per day. It's nowhere near
money you build up from quitting completely, but here's what happens in
our Broad Market Stock Fund:
$638 in five
$1,689 in ten years.
in twenty years.
we're not talking about huge sums of money now, but wouldn't
fun to run out and spend $638 on whatever you want every five
to improve your
health, have extra spending money and be one step closer to becoming
wealthy? Then stop burning up money by smoking. Quit smoking or at least cut back.
putting that money into a bank account or Mutual Fund instead.
And of course, read all of the articles
on the Financial Page
and put what you learn into practice. If you would like to hear
more of my thoughts and opinions on various aspects of saving,
investing and money, please check out My Humble Opinion.
your smoking habit is different than in my example and you want to know
how your specific smoking habit is affecting you financially, then
check out my free, downloadable Future Value Calculator
software. To figure out what would happen to your
money in a mutual fund, just enter what you spend on cigarettes per
month into "monthly contribution," Enter "10" for "annual
yield" and enter whatever length of time you want to calculate for into
the box labeled "time". To calculate for a bank yield, do the
same things, but instead of entering "10" for "annual yield," enter
whatever annual percentage rate your bank is paying.
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and techniques given on this site are nothing more than the author's
the matter being addressed. Do further research before making
copyright ?2007,2009 by Keith C. Rawlinson
(Eclecticsite.com). All rights reserved.
This article may be
copied for non-profit use including newsletters,
as long as you
first get written permission from the author
and full credit is given
which includes the author's name
and the name of this website.
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