Cost of Smoking

There's a real cost of smoking. You know that smoking costs you your health. It also costs you a lot financially. I don’t have to tell you that cigarettes cost. Like the picture shows, smoking amounts to burning money.

But that's only the beginning. The money you’re losing smoking goes far beyond what you may think. Read on to see what I mean.

A pack or so a day can easily cost a smoker upwards of $200/ month or $2400/year.  That’s a lot of money. But the real cost is even greater. Here’s what I mean.

Let’s suppose that instead of buying cigarettes someone invested $200/month in a tax-free IRA. If the IRA earns only 5%/year on average, after 10 years it would be worth $31,056. In 20 years it would increase to $82,206.

What if the IRA earned 10%/year? That’s not entirely unrealistic because the average return of the stock market over time is about 10%. It would reasonable to expect that type of return from a low-cost index fund.

In 10 years $200/month at 10% grows to $40,969. In 20 years it’s $151,873. That’s a lot of money. But it gets even more amazing. Compound interest makes things grow exponentially – as time goes by the yearly gains get to be more and more even if the contribution stays the same. You’re earning interest on interest.

If you go 40 years (say, from age 20 to 60) $200/month at 10% equals $1,264,815. Imagine, you can become a millionaire just by investing the money you’d have spent on cigarettes.

And not only would you be rich, you’d have your health and all the other benefits of being smoke free.

This strikes me as yet another great reason to stop smoking. Make setting up an IRA part of your stop-smoking plan. I suggest you set up an automatic deposit plan as part of it.

If you smoke, you're essentially burning money and ruining your health in the bargin.  If you want help quitting, the links below are a good place to start.

Quit Smoking Today