“Smoking is injurious to health” – Stop Smoking, Save Money & Start SIPping:
By looking at the title if you thought I am asking you to kick the butt and pick up the glass, you are wrong. I am neither leading you to fire from a frying pan nor moral policing…
May 31, every year, is observed as the World No Tobacco Day. Government agencies, NGOs and other organisations hold programmes to make people aware of the ills of smoking. Smoking not only takes a toll on your health, but it also drills a hole in your pocket as well. You suffer a double whammy. Not only does your life go up in smoke, but you are also not left with much money to battle diseases like cancer, mouth decay, or whatever. Have you ever wondered how much money you have literally ‘burnt’ to get that temporary high from nicotine? Let’s find out.
According to a study by ET Wealth, a 30-year old smoking five cigarettes daily, would lose more than Rs. 1 crore by the age of 60, courtesy the bad habit. But the biggest dent in the wallet is the price of a cigarette which is usually between Rs.10-15. Assuming that a person spends Rs.12 for a stick and conservatively smokes five cigarettes a day, he will ‘burn’ Rs.60 daily i.e. Rs.1,800 each month.
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The cost, however, won’t be static. Cigarette prices have risen 20% on an average for the last four years and will continue likewise. The government will keep raising taxes to discourage smoking. Assuming a minimum 8% rise in cigarette prices every year, extrapolated to 30 years, a smoker will spend Rs. 24.47 lakhs on cigarettes. Now, if that’s not compelling enough to quit smoking, consider the fact that the same money would have grown to Rs. 69.23 lakhs in 30 years at 9% returns. If you add incidental expenses like additional insurance costs etc, the amount would be much higher.
Passive smoking
Many of us are known to the dangers of second-hand smoke. But how bad it is? Scientific studies have revealed some startling facts :
• Non-smokers exposed to tobacco smoke have an increased chance of lung cancer by nearly 20-30%.
• Passive smoking may lead to premature death among non-smokers.
• There’s no safe level to second-hand smoke.
• Passive smoke contains over 4,000 chemicals, among which, at least 70 are known to cause cancer.
• Passive smoking also increases a person’s chance of suffering from coronary heart disease, sinus, stroke, breast cancer, atherosclerosis, and chronic respiratory symptoms and COPD.
Children are usually the worst sufferers of second-hand smoke. It exposes them to lower birth weight, bronchitis, pneumonia and other lung diseases, wheeze illness, ‘glue ear’ or middle ear effusion, respiratory problems like cough, phlegm, and breathlessness, and high rates of asthma.
Research has also revealed that side stream smoke i.e. some which burn off from the end of a cigarette is more toxic than mainstream smoke which a smoker inhales. Given that we are already exposed to heightened levels of air pollution, especially in our over-congested cities, aren’t these reasons enough to quit smoking for good?
The quit plan
But giving up smoking, in the first place, is the toughest past. Many quit only to resume soon. While having a quit plan undeniably helps, adhering to it is what makes all the difference.
Here’s a START plan to help you kick the butt.
S-Set a quit date
Select a date within the next 10 days so that you have enough time to prepare yourself and retain the motivation to quit. If you usually smoke at work, try quitting on weekends. You will have a couple of days to adjust the change.
T-Tell your friends, family, colleagues
Inform your close ones about your quit plan. You will need their encouragement and support. See if there’s a friend who wants to quit to. You can help each other to tide over the rough times.
A-Anticipate and plan for challenges
Remain prepared to tackle cigarette cravings and nicotine withdrawal symptoms. Many quitters begin smoking within three months.
R-Remove tobacco products
Just throw away all remaining cigarettes, lighters, ashtrays from your home, car, work, and everywhere. Wash your clothes to get rid of cigarette smoke. Clean your drapes, carpets, and shampoo your car.
T-Talk to your doctor
You doctor will prescribe medicines to battle withdrawal symptoms. Even without consulting your doctor, you can use over the counter products like nicotine lozenges, or nicotine gum, as alternatives to smoking.
Then what?
The nicotine in cigarettes gives you an instant high, and that’s why you are addicted to smoking. Most people forget the long-term health effects of smoking, much like forgetting the long-term effects of not saving. Having kicked the butt and saved the money, you are likely to be confused about how to put it to work.
Have you considered SIPping instead of smoking?
The SIP Plan
An SIP is the smartest way to invest money in securities and earn handsome returns. It allows you to invest a predetermined amount, usually at a monthly interval and is a balanced approach for investments. It helps people to grow the habit of saving and build wealth for the future.
How does an SIP work?
An SIP is an easy investment plan providing flexibility. The money is debited directly from your bank account and invested in a particular mutual fund scheme. You will be allocated some units from the fund, depending on the current market rate i.e. net asset value (NAV) on that particular day.
Each time you invest money i.e. pays your monthly instalment, additional units of the fund are purchased at the market rate and added to your investment corpus. Units are bought at different rates, and you benefit from the rupee-cost averaging and power of compounding.
Power of Compounding
The compounding rule is simple. The earlier you begin investing, the more time your money has to grow. Say, you are 40 now, and start investing Rs.10,000 every month. Of course, we are not saying you smoke Rs.10,000 worth of cigarettes each month. That would leave the hospital smiling all the way to the bank. But over the next two decades, you would have set aside Rs. 24 lakhs. Even if that investment grows conservatively by 7% every year, you will have Rs. 52.4 lakhs by the time you become a senior citizen.
Now, had you kicked the butt at 30, or better still, never smoked at all, the Rs. 10,000 every month would add up to Rs. 36 lakhs in 30 years. At the same rate of interest, you would have Rs. 1.22 crore when you turn 60, more than double of what you would have got if you started at 40.If that’s not reason enough to quit, carry on smoking.
Also read: Power of Compounding
Ok, understood. What else?
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Here are some other benefits of SIPping:
Disciplined savings: Discipline is at the centre of all successful investments. While investing through SIP, you commit to saving regularly. Every investment will take you further from the deadly habit and help you attain your financial objectives.
Flexibility: While SIP performs the best over the long-term, there’s no compulsion to carry it more than you like to. You can discontinue your SIP any time. You can also increase or decrease your amount. It’s entirely at your disposal. But please don’t resume smoking after you have stopped your SIP.
Long-term windfall: As already said SIPs deliver attractive returns over the long-term because of the rupee-cost averaging and power of compounding. So whenever the desperation to kick the butt (not literally, though) becomes a tad overbearing, think of the money you can flaunt two decades from now.
Convenience: SIPping has no hassles. Issue a standing instruction to the bank to auto-debit the SIP directly from your bank account.
Also read: SIP Vs Lumpsum Investment
If all that we spoke still doesn’t convince you, consider the medical expenses incurred by smokers because of poor health. Despite not being a medical expert, you should know that smoking leads to serious health problems, as already said earlier. We can safely assume that a smoker would spend around Rs. 400 each month on medical expenses. What’s worse is that the cost will continue rising. Consumer inflation is much higher compared to retail inflation. The cost of medicines, doctor’s consultation, charges rise by nearly 15% year on year. Even assuming a 12% rise in medical costs, a smoker would spend Rs. 11.59 lakhs on medicines over a 30-year period. The same money, invested at 9% returns, would grow to Rs. 26.70 lakhs in three decades.
The bottom line
Smoking kills, SIPping pays. Set aside the money you spend daily on the butt and invest that in a good mutual fund. It’s never too late to start investing. But it may be late to quit smoking, and the damage could already be done.
