How to fund your retirement with cigarettes 78



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Before you start reading, I’m not trying to pick on the smokers. You are just conveniently helping me make my point.

I had a really interesting Christmas this year. I went and spent some time with family in country NSW and, at the same time, read a book about money. The book was for research for a podcast so it was a little like homework and some of the content was very “back to basics” but regardless of that the messages rang true.

One point that was made in the book was that absolutely anyone can save no matter where they are in life. That’s a big call, however the author made the point that you could make the coffee at home instead of buying it or get a pizza at home instead of going out for dinner and the examples went on. The point was that good old fashioned saving and compounding returns remain the most powerful engine room for wealth accumulation and that it’s never too late.

This following is a true story:

One day I was out grabbing groceries for a BBQ when I got a text to pick up cigarettes for my Aunt. I stopped at the shop and was absolutely astounded to pay $26 for a packet! $26 I exclaimed! How does anyone afford to smoke cigarettes?

The Australian Bureau of Statistics notes that at January 2013:

“In 2011-12, the Australian Health Survey reported that approximately 8 million Australian adults aged 18 years and over had smoked at some time in their lives. 3.1 million were current smokers, with the vast majority (90 per cent) of these people smoking daily”.


Wow! How my mind started to race. What about if you were 25 now and you smoked a packet a day, how much could you save if you stopped?

Here are some answers. Assuming (or maybe dreaming) that cigarettes never increased in price again and that the inflation adjusted return was 3.5 per cent (allowing for 2.5 per cent CPI and tax).

  • Quitting smoking a packet a day and you would save $9,464 in a year. If you invested it every year for 10 years, that’s $111,026; 20 years is $267,639 and 35 years through to when life starts at 60 is $631,003!
  • If you decided to drop one latte a day @ $3.50 through til 60 you could add another $85,176
  • And if you cut out 1 night a month on the town and save a further $100, that’s another $80,000

Altogether a 25 year old smoker who quits for life, cuts out 1 coffee a day and adds an extra night in front of the TV could save $796,178. That would buy a great deal of additional retirement lifestyle!

What about if you are 60 now?

If you can find a way to save $50 a week, you could save just under $14,000 in 5 years and $30,500 in 10 years. You could do a lot of great retirement things with that much money and It’s never ever too late if you take some action.

The point is that you have to make the saving happen. Find you way to putting it out of reach. Get a plan and execute it.

The moral of the story;

Don’t make excuses, make plans!

Oh, and Yul Brynner was right, what ever you do, don’t smoke.


This editorial provides general information only. Before making any financial or investment decisions, we recommend you consult a financial adviser to take into account your particular investment objectives, financial situation and individual needs. Genesys Wealth Advisers and its Authorised Representatives do not accept any liability for any errors or omissions of information supplied in this editorial.

How do you save money? Have you ever been a smoker? Did you give up and find you saved a lot of money? Tell us below.

Peter Audet

Peter Audet has made a career in financial services starting in 1988 in Sydney and establishing his advice business in 1995. Varria provides advice to clients right across Australia. At Varria, we believe that when you really understand how money works for you, you unlock the key to being happy and satisfied with it. They call it Wealth Truth.

  1. I have never smoked a day in my life which leaves me wondering where all the money I saved went?????

    6 REPLY
    • Susan,It’s not so much the money, It’s your health. As Dinne points out Life’s a bitch then you die…..

    • Unlike me my daughter took up smoking and I am pretty sure I provided the cash in the beginning. She has since stopped thank goodness.

    • I have a friend whose husband gave up smoking so she bought him a brand new wallet and filled it with the money he was saving instead of smoking and he got quite a surprise.

  2. I agree I am a smoker but as I do not eat out much do not wear much make up a base lasts me five to seven years do not eat take out much do not by coffee out much. Read books from library ( read millions free.) do not dye hair do not spend on hairdresser about 60 dollars a year as I get my head shaved do not use hair products. Like gardening grow from cuttings. Do not drink alchohol I save as much if not more then many non smokers but great tip.

  3. So much is said about smoking it is always the answer to everything but all bad habits are expensive eating to much, drinking, dining out, sport can cause problems do not know how many leg problems ect ect were caused by sport, driving around in a car save a lot if you walk, the list is endless just buying lotto tickets mounts up so let’s all remember before we judge that most normal people have weaknesses. Those without fault should be the only stone casters!

    3 REPLY
  4. I gave up smoking and after a horrid cessation period I am now happily spending the money I’ve saved on beer.

  5. Wouldn’t it be great if these financial guru’s actually told you something that helps, like how can you save money from the things you aren’t doing anyway. Tell us please what would your suggestion would be to give up when a lot of pensioners don’t even have enough for the necessities. Pray tell how do you save then because I’m sure there would be a lot of people interested and would truly love to better their situations.

  6. when I gave up smoking, I put the money away each week that I would have spent on cigs, and afte 1 year I had a lovely cruise, not sure where the money I am still saving has gone,,

  7. I gave up cigarettes 8 years ago when a pack of cigs were about $11. I continue to put what I spent per week away which has fully funded a trip to the UK every year since to reward myself. Gosh at today’s prices per pack, I could afford to travel twice a year…rewarding yourself is much better than the other option 🙂

  8. I just last week asked my husband to buy less lotto games. Shocking waste of money when you add it up over decades.

    2 REPLY

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