A smoking joke that just got serious
The joke goes like this.
There’s a guy taking a smoke break with his non-smoking colleague.
“How long have you been smoking for?” the colleague asks.
“Thirty years,” says the smoker.
“Thirty years!” marvels the co-worker. “That costs so much money. At a pack a day, you’re spending $1,900 a year. Had you instead invested that money at an 8% return for the last 30 years, you’d have $250,000 in the bank today. That’s enough to buy a Ferrari.”
The smoker looked puzzled.
“Do you smoke?” he asked his co-worker.
“So where is your Ferrari?”
According to the National Cancer Institute, the average cost of a pack of cigarettes is $6.28, which means a pack-a-day habit sets you back $188 per month or $2,292 per year. Certainly, the amount is an average and it may differ from one country to another.
Now let’s do some maths with some simple calculation below:
- Save for a year and started to invest with a capital of $2,292. Subsequently, invest monthly $188.
- Simply put all your money invested into SPY (which is the S&P500 index ETF).
- From 1 January 1994 to 30 September 2020 (total of 26 years and 9 months), your account balance will have $330,955!
- Note that it covers the dot com bubble, the 2008 financial crisis, and the coronavirus crash, yet your account continues to grow.
- It is not difficult to learn how to invest, some investment strategy can be simple yet effective.
- Invest early regardless of any amount. It is a myth to believe that you need a high capital to start investing.
- Quit smoking and start investing!