World No Tobacco Day: Are you losing your wealth and health to cigarettes? Here's how to save lakhs

How many cigarettes do you smoke in a day? You must ask this question every day, though it gains more relevance as the world takes out time to sit back and observe “World No Tobacco Day” today. If your health gains precedence over everything else, there is no reason why you must support any kind of addiction, be it due to your cigarette smoking habits.

Though not all smokers go for the record-breaking “A packet a day”, you will find many of them smoking as many as 10 cigarettes a day. Assuming that a cigarette costs ₹19, smoking 10 cigarettes every day equates to spending ₹190 a day, which is ₹5,700 every month. Amusing that you spend so much on cigarettes without lending a second thought to the costs involved.

A monthly expenditure of ₹5700 may not seem costly. However, you extrapolate the expenditure to a year or more, say 10 years and you will realize the amount you have spent on cigarettes alone to date. Expenses on cigarettes amount to ₹68,400 every year, which is equivalent to ₹6,84,000 over 10 years. Now, imagine the same amount that could have been invested over the next decade and the amount you could earn on it.

Assuming that you invest ₹5700 every month in a mutual fund earning 12 per cent per annum over the next 10 years.

Monthly Investment: ₹5700

Rate of Interest: 12% p.a.

Investment Tenure: 10 years

translates to

Invested Amount: ₹6,84,000

Estimated Returns: ₹6,40,333

Total Value of the Investment: ₹13,24,333

If you are new to the world of investments, you may dump the cigarette for a year and put that money in mutual funds. Investing money is nothing short of an addiction, and once you see your money growing, there is no way you will go back and waste it on something as damaging as cigarettes. Smoking is a habit that can be rid of and the best way to be rid of it is to replace it with some other habit that is equally addictive but will help your finances grow.

If you are young and took up smoking just for fun, you bet putting money in an investment option that helps you grow rich would indeed be more entertaining. The newcomers can take the risk of starting by putting money in a small cap fund.

Check out the returns by some of the top small-cap mutual funds in the past 10 years to decide which asset management companies have helped their investors create wealth.

Assuming that a smoker decides to quit his smoking habits, and decides to put the money, otherwise spent on cigarettes, in any of the above small-cap funds.

However, not all smokers may be willing to take risks, which is why they may start by putting their money in passively managed funds, for example, index funds. A simple alternative could be the less risky large-cap or the flexi-cap funds that earn well without being subject to much market volatility.

The most risk-averse may think of putting this amount every month in a Public Provident Fund (PPF) account for the coming 15 years, thus, allowing them access to a decently sized corpus completely exempt from tax.

Yearly Investment: ₹68,400

Interest Rate: 7.1%

Investment Tenure: 15 years

translates to

Invested Amount: ₹10,26,000

Total Interest Earned: ₹8,29,103

Maturity Value: ₹18,55,103

An overall view of how replacing your smoking habits with simple and regular investing habits will not only rid you of addiction but will also introduce a world where “money begets money” made possible by continued growth in earnings.

The effect of smoke that causes you to crave more cigarettes has dragged many towards unbridled and inexplicable dependence. This also explains the rising incidents of respiratory problems and cardiovascular disorders. However, this also highlights the need to have a health insurance plan in place. Smokers must ensure to buy enough coverage that would pay for both their hospitalization and treatment bills.

A simple health coverage of ₹10 lakh will cost you roughly between ₹10000-14000 every month in premiums. Similarly, smokers can avail of a simple term insurance policy with ₹50 lakh life cover at premiums of up to ₹1000 every month.

Smoking kills, and yet people smoke. Medical experts attribute smoking as one of the foremost reasons for health disorders. Yet, people disregard these warnings that various social organizations forward to alert people of the possible health effects.

Observing “World No Tobacco Day” on May 31 alone every year does not suffice. There is an ardent need to observe it each day, irrespective of how escapists view smoking as just another habit that helps them kill time and stress.