Wednesday, May 07, 2008

How much is that pack of cigarettes?

I got this idea from Dave Ramsey. I've changed the numbers some, but the results are still pretty impressive.

Suppose that a 15 year old decides NOT to start smoking a pack of cigarettes a day and instead puts that money into a decent investment. Do you know how much he would have at retirement?

Take a deep breath - it's $1.6 MILLION.

That's not including any savings on life insurance or doctor bills or inflation (all of which are real and VERY likely). That's assuming a 10% rate of return.

The spreadsheet is available if you want it.


emilymburgess said...

I am interested in that spread sheet. That could be incentive for my dad.

Anonymous said...

Hi Randy - yes, email the spreadsheet if you can. I have used something similar with a Junior Achievement lesson on the "Economics of smoking." I just emphasized the annual cost and all the other things they could do with that money - clothes, donations, McDonald's, movies, etc.

I also walked them through how cigarette advertising works and how they manipulate the kids.

emilymburgess said...

We have game tomorrow night at 6:15 in Travelers Rest. Ya'll should come. :)

Adam said...

Did you factor in a 7 cent sales tax or one of the proposed sales tax (35 cents in house version, 50 cents in senate version)

Randy said...

I think this was based on the current tax. With the new tax (it's an ADDITIONAL 50cents) it will be even more..