Swapping Kippe for ETFs: Financial Gains from Quitting Smoking
World No Tobacco Day: Investing in an ETF Instead of Smoking Could Generate a Six-Figure Fortune
On World No Tobacco Day, a calculation reveals the financial advantage of quitting smoking and investing the savings in an ETF. By forgoing cigarettes and investing wisely, an individual could amass a substantial fortune in just a few decades.
According to a model calculation by Verivox, a pack-a-day smoker spending around €265 a month on cigarettes could accumulate over €169,000 in ten years, and more than €500,000 in 30 years if the money were instead invested in an ETF. This assumes a 3.7% yearly increase in cigarette prices and an average annual return of 7.5% for the ETF.
The compounding effect of the ETF over the years significantly enhances the former smoker's portfolio value, with 69% of the portfolio value after ten years coming from the saver's contributions and the rest from returns. By the end of 30 years, the portfolio value comprises only 34% of the saver's contributions, with the remaining 66% derived from returns and compounding.
When selling shares, it's essential to remember that only 73.63% of the gains can be withdrawn, with the remaining 26.37% going to taxes. Despite this, the net yield of €441,000 remains impressive.
It's crucial to note that while the model calculation demonstrates the potential compounding impact over many years, returns may not be consistent, stock market fluctuations can be significant, and there might be substantial market crashes. Therefore, investors need to hold onto their investments for a long time and have the resilience to weather downturns.
For those seeking support in quitting smoking, RTL will air the show "Finally Non-Smoker!" with Wolfram Kons, Lilly Becker, and Christian Häckl on Saturday, May 31, 2025, at 12:30 PM.
Sources: ntv.de, awi/dpa
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By making the financial choice to quit smoking and invest the savings, not only can an individual improve their health, but they could also significantly boost their wealth.
- In addition to the health benefits of quitting smoking, investing the saved funds in a well-managed ETF could potentially generate wealth beyond €441,000 after 30 years, signifying a substantial increase in personal finance and wealth management.
- As mental health plays a vital role in an individual's overall well-being, investing in their future financial security through vocational training might open doors to new career opportunities, contributing positively to their health-and-wellness.
- Considering the long-term compounding effects of investing in an ETF, it's worth pondering whether this approach could be more advantageous than other forms of spending, such as purchasing insurance policies or even higher education, both of which are significant financial commitments.
- On World No Tobacco Day, it's essential to remember that investing in a diversified portfolio, like vocational training, health-and-science, mental-health, and personal-finance sectors, can potentially yield favorable returns, much like the six-figure fortune theoretically generated from an ETF investment instead of smoking.
