The Economics of Quitting Smoking

When I first got together with the Gf, I had become a pretty heavy smoker.  I had picked up the habit in army and had an on-off relationships with cigarettes.  Quit, then get addicted; quit and get addicted again.  The addiction became full blown when I started working in the construction industry.  By then I was smoking 10 sticks a day, 1 pack every 2 days.  The addiction got so bad that the Gf threw me an ultimatum –

“Quit Smoking or I will break up with you.”

At first I brushed it off as a harmless Gf-trying-to-control-the-Bf threat, but then I realised she was dead serious about it.  A life of loneliness for the sake of cigarettes seemed like a bad deal.  I got over my bruised ego and decided to quit for good.

The economics of quitting cigarettes ( a rough gauge):

1 pack every 2 days = $11cigarette-smoking_w725_h544

1 month expenditure = $11 X 30/2 = $165

1 year of expenditure = $165 X 12 = $1,980

3 years = $5,940

5 years = $9,900

10 years = $19,800

Getting Cancer or other Lung diseases 20-30 years down the road= $@!&!#?

 

Furthermore, the Singapore government is always raising taxes on cigarettes every few years, and I do not forsee the tax increases to stop.

By saving $1,980 a year, the money could be spent on a couple holiday around Taiwan and we would still have some spare cash left over.  If you are a fresh grad out of polytechnic, earning $1800 a month, that expenditure on cigarettes is almost 1 month of your salary.  If you are an executive with a degree, that amount would be equivalent to 0.5 – 0.7 months of your bonus.  If you are a super-rich baller, think of the health complications that are looming like dark clouds in your distant future, ready to prevent you from having fun with all your hard earned money!  If you are an investor, look at the opportunity costs worked out below:

2 investors, 1 smoker, 1 a non-smoker.

Smoker invests : $5,000 a year

Non-smoker invests: $5,000 + $1,980 = $6,980 a year

Using S&P500 index, annualised about 7.6% in 10 years.

The smoker will add an additional $5,000 to his investments annually, while the Non-smoker adds an additional $6,980 to his investments annually.

After 10 years their investments become:

Smoker : $71,071.34

Non smoker: $99,215.59

Difference = $28,144.25

Assuming annualised returns remains the same for 20 years,

Smoker : $218,919.95

Non smoker: $305,612.25

Difference = $86,692.30

 

Of course, this is just an oversimplified calculation, but I am sure you get the idea.  We must train our minds to really see long term and not give in to short term gratification.  Even with this arguments presented, many people reading this will still not quit. Try cutting down first, try taking nicotine gum or patches, then cut down on the nicotine intake, and finally wean yourself off the addiction. Cutting down your nicotine intake is already a good start!

Thanks to the Gf knocking some sense into me, I have stubbed out before my cash and health both go up in smoke.

 

How did you quit? Share with us in the comments below 🙂

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