THE COST OF SMOKING CIGARETTES

According to information on-line, the cost of cigarettes increased an average of 4.1% a year from 2000 through 2017, and the average cost was $6.16 a pack in 2017.

So, suppose you smoke a pack of cigarettes a day. Using the average cost per pack of $6.16, the total cost per year would be $2,248. If you cut your smoking to half a pack a day, you would save about $1,124 a year.

To calculate how much the $1,124 in savings, invested at a very modest 2% a year, would be worth in 10 years you would do the following with the following with the Choosing Wealth™ Calculator:

1. Enter 1,124, your first annual investment amount, then select | |

2. Enter 4.1, the increase in cigarette cost, then select | |

3. Enter 10, the number of years in your investment plan, then select | |

4. Enter 2, the annual rate of return you assume, then select | |

5. Select |

The value displayed, $14,748, is the projected value of 10 years of cigarette savings based on the specified assumptions.

The “Non-Smoker Wealth” chart shows the potential wealth from investing this savings at different rates and for different years.

NON-SMOKER WEALTH

Years | Assumed Investment Returns | ||

2% | 4% | 6% | |

10 | $14,748 | $16,067 | $17,529 |

20 | $40,020 | $47,797 | $57,590 |

30 | $81,726 | $106,640 | $142,288 |

And that’s not even counting how much more costly health insurance premiums can be for smokers. A final Department of Health and Human Services rule found here allows for rates to be as high as 50% above those of non-smokers. An insurance website suggests smokers will pay on average 15-20% higher health insurance premiums. That means if the monthly premium was $350 for a non-smoker, it could be $420 a month for a smoker, a difference if $70 a month or $840 a year. Assuming health insurance costs increase 5% a year, the “Non-Smoker Insurance Wealth” chart below shows how much the savings could be worth at different rates over different years.

NON-SMOKER INSURANCE WEALTH

Years | Assumed Investment Returns | ||

2% | 4% | 6% | |

10 | $11,477 | $12,487 | $13,604 |

20 | $32,686 | $38,823 | $46,522 |

30 | $70,296 | $90,598 | $119,410 |

THE LIFESTYLE COST/BENEFIT ANALYSIS

Between the cost of cigarettes and higher health insurance premiums (and/or life insurance costs; and surely higher medical costs), how much of a personally and financially healthy and wealthy future lifestyle are you sacrificing?

Using this illustration, doesn’t taking 30 years of assumed investment returns at a modest 4% and having almost $200,000 sound better?