Not Smoking equals LOADS OF MONEY!

This isn't a "smoking is bad for your health" blog, but it is a quit smoking to retire early blog. I just wanted to show how much you can save by not buying that expensive pack of cigarettes every day. For the people who don't smoke, think about something that you buy almost every day that you could live without.

Ok I don't smoke, but I know that a pack of cigarettes that isn't an off brand is getting more and more expensive. So I am going to estimate that a pack is $4.49 and that the smoker I'm talking to smokes one pack a day.

Now let's say you stop and start saving $4.49/day about 30 days a month = around $135/month

$135 a month for 40 years (480 months) at 6% interest.... You could have almost $270,000 in your bank because you quit smoking. I know that cigarette probably makes you feel so good but wouldn't a quarter of a million bucks feel pretty dang good too?

More on Interest

According to wikipedia, the median household income in 2006 was just over $48,000 a year. So, let's just say this is your average lifetime salary and you saved 10% before tax (with 401k, IRA, savings account, whatever) every year. Finally let's also say you were getting 6% interest compounded monthly, and you did this from the time you are 40 to 65 (or 25 years).

$48,000/year -- putting $4,800 away a year -- that's only $400 a month

After 25 years, just from 10%, you will have $269,657 in your account!!

BUT if you started early, say at 25, and put away $4,800 a month till you are 45 and then added NO MORE MONEY when you turn 65 you will have over $595,000!

Talk about the power of compounding interest!