Quitting smoking is profitable

By Jim Killebrew

[January 18, 2014]  Some people find it difficult to quit smoking cigarettes and find little motivation to do so. Even though the cigarette package bears a warning to one's health, it still does not seem to be significant enough to eliminate smoking. Perhaps it is because a person feels healthy and smoking is incremental ... one cigarette at a time. A person usually does not feel any worse after smoking only one cigarette.

Monetary cost

The other side of the incremental perspective, however, could be the cost associated with smoking. Cigarettes usually come in a package of 20. They may be purchased with a variety of prices; a name-brand package costs more than a generic brand, so the price varies. For the purpose of this article, an average price is used. An average cost of a package of cigarettes will be approximately $5.20. The following incremental breakdown of the cost is surprising.

If a person smokes one package of cigarettes per day, it will cost $5.20 in that one day. That does not seem like a lot, and if it is only an incidental cost, it is not that much. However, in the incremental perspective at the end of a week, the cost of smoking a pack a day is $36.40. Examine the following table:

Month = $156.00
Year = $1,900.08
5 years = $9,500.40
10 years = $19,000.80
15 years = $28,501.20
20 years = $38,001.20
25 years = $47,502.00

Hmm ... one pack a day costs $47,502 in 25 years. That is assuming that the government will not increase the tax on cigarettes over the next 25 years. Over $47,000 could go a long way toward paying off a mortgage. Remember, incrementally is only one cigarette at a time.

Health cost

Of course the cost has to include the health aspect as well. Lighting up a cigarette and inhaling the smoke into our lungs has been shown to be directly linked to significant health risks. One day for the pack-a-day smoker is of course 20 cigarettes. The number increases to 140 in a week. Examine the following table:

Month = 600
Year = 7,308
5 years = 36,540
10 years = 73,080
15 years = 109,620
20 years = 146,160
25 years = 182,700

Wow! In 25 years the smoker has burned up $47,502 and has also smoked 182,700 cigarettes.

Investment cost

Another cost to consider is the loss of potential investment earnings. Consider the magic of compounded interest, especially from the incremental perspective. Any calculation table will demonstrate the potential earnings of saving the cost of a package of cigarettes. By saving the $5.20 per day in a compounded savings account at 3 percent compounded interest, it will yield approximately $70,382.58 in 25 years. Of course the potential savings could be even greater if the $5.20 per day were invested in other forms of earning potential such as stocks or bonds.

Summary

By quitting smoking, a person can earn and save at the same time over the next 25 years of their life. By not smoking any more cigarettes and instead investing the cost of the package of cigarettes over the next 25 years, the smoker will have ...

• Not smoked 182,700 cigarettes and will likely be much more healthy.

• Not spent and burned up $47,502 over the same period of time.

• By investing the cost of cigarettes that would have been spent by continuing to smoke, the nonsmoker will have approximately $70,382.58 to spend on other things.
  

What could be more of a motivation to quit smoking and avoid the incremental effects of loss of money and health, and at the same time gaining the incremental effects of compounded interest investments?

[By JIM KILLEBREW]