The cost of smoking

[Loren Pechtel]

In years past some of you have felt we were totally unreasonable in saying that smoking is part of the cause of poverty.

http://www.freep.com/story/money/business/2015/01/20/cost-smoking/22070223/

Average lifetime cost (counting the effects of investing the money you didn't spend on coffin nails): $1.4 million.

 

[laughing dog]

There is something missing between the claim that smoking is part of the cause of poverty and the average lifetime expense (which is less than the cost): a causal explanation.

 

[untermensche]

The average Michigan smoker will spend $1,144,484 on tobacco, ranking it 35th; that's based on one pack a day for 51 years, plus the amount of money the person would've earned if that money was invested instead.

When you start talking about "investing the money instead" you leave reality.

Imagine if I didn't wear underwear and invested the money instead?

Imagine if I cut my own hair and invested the money instead?

 

[Trausti]

I support you that smoking is a bad habit that wastes money which could have gone elsewhere. Someone could say this about my morning trip to the coffee shop. Not so sure about the correlation of smoking to poverty, though. Know enough "professional" smokers to think it'd be just a minor factor.

 

[Angry Floof]

That number is bullshit. At $5 a pack, and smoking a pack a day, that's $1,825 per year. Even if you smoke for 40 years without missing a day of buying and smoking a $5 pack of cigarettes, that's $73,000.

The average Michigan smoker will spend $1,144,484 on tobacco, ranking it 35th; that's based on one pack a day for 51 years, plus the amount of money the person would've earned if that money was invested instead.

When you start talking about "investing the money instead" you leave reality.

Imagine if I didn't wear underwear and invested the money instead?

Imagine if I cut my own hair and invested the money instead?

Exactly. You have to add in money that you wouldn't have had in the first place.

 

[Nexus]

That number is bullshit.

Compound interest over a 50 year period is where they are getting that number. I find the number dubious because it would need a complex inflation adjustment and the return on investment over 50 years varies greatly depending on investment strategy.

 

[barbos]

That number is bullshit.

Compound interest over a 50 year period is where they are getting that number. I find the number dubious because it would need a complex inflation adjustment and the return on investment over 50 years varies greatly depending on investment strategy.

That's still a bullshit. You can't make $80k into $1.5mil in 50 years by interest.
Correct way is to take today's price of cigarettes ($5) and assume that's what 70 year old smoker paid for his last 50 years. That would be ~$80k and assuming price of cigarettes followed inflation it is a correct inflation corrected number.

 

[untermensche]

I think this horse is dead.

The true cost of smoking is in healthcare costs.

 

[barbos]

I think this horse is dead.

The true cost of smoking is in healthcare costs.

I still doubt that number. $1.5mil over 50 years is $30k/year. Insurance companies would have made you pay it for their insurance and they don't. Life long pack a day smokers die pretty quickly, some get cancer and it cost some to try to operate (not a $1.5mil). But most will suddenly die from heart problem by the age of 60.

 

[untermensche]

I think this horse is dead.

The true cost of smoking is in healthcare costs.

I still doubt that number. $1.5mil over 50 years is $30k/year. Insurance companies would have made you pay it for their insurance and they don't. Life long pack a day smokers die pretty quickly, some get cancer and it cost some to try to operate (not a $1.5mil). But most will suddenly die from heart problem by the age of 60.

The biggest problem from smoking is COPD.

Note the C stands for chronic.

This is a disease almost entirely associated with smoking.

It is incredibly costly in terms of healthcare dollars.

In 2010, the cost to the nation for COPD was projected to be approximately $49.9 billion, including $29.5 billion in direct health care expenditures, $8.0 billion in indirect morbidity costs and $12.4 billion in indirect mortality costs.

http://www.lung.org/lung-disease/copd/resources/facts-figures/COPD-Fact-Sheet.html

 

[Derec]

That number is bullshit.

Compound interest over a 50 year period is where they are getting that number. I find the number dubious because it would need a complex inflation adjustment and the return on investment over 50 years varies greatly depending on investment strategy.

You do not necessarily need to invest, which most poor people do not do anyway.
Avoiding finance charges packs a much bigger impact. If you can put the $1,800/a toward paying off that 20%+ APR credit card or not having to take that 300%+ effective APR payday loan or perhaps buy that sofa for cash rather than at a ripoff rent-to-own place you could save some real money that could help you get out of poverty.

- - - Updated - - -

The biggest problem from smoking is COPD.

That's some nasty shit indeed.

 

[Loren Pechtel]

I think this horse is dead.

The true cost of smoking is in healthcare costs.

No. Smokers don't tend to cost more, although they do cost earlier.

 

[Loren Pechtel]

You do not necessarily need to invest, which most poor people do not do anyway.
Avoiding finance charges packs a much bigger impact. If you can put the $1,800/a toward paying off that 20%+ APR credit card or not having to take that 300%+ effective APR payday loan or perhaps buy that sofa for cash rather than at a ripoff rent-to-own place you could save some real money that could help you get out of poverty.

This also.

However, just crunching the numbers in the article, one pack a day and an 8% rate of return comes very close to their numbers.

While erroneous 8% is the rate of return typically figured for long term investment. (6% is more realistic--but still add up to over half a million dollars.)

 

[EricK]

The average Michigan smoker will spend $1,144,484 on tobacco, ranking it 35th; that's based on one pack a day for 51 years, plus the amount of money the person would've earned if that money was invested instead.

When you start talking about "investing the money instead" you leave reality.

Imagine if I didn't wear underwear and invested the money instead?

Imagine if I cut my own hair and invested the money instead?

Although if someone was spending $5+ per day on underwear and was complaining about being poor, it might be among the first places I suggest they try to control their spending.

Of course it's not entirely the poor people's fault - apparently there's something found in underwear which many people find highly addictive.

 

[bilby]

In years past some of you have felt we were totally unreasonable in saying that smoking is part of the cause of poverty.

http://www.freep.com/story/money/business/2015/01/20/cost-smoking/22070223/

Average lifetime cost (counting the effects of investing the money you didn't spend on coffin nails): $1.4 million.

I beg your pardon, your majesty, but can I enquire as to the exact date on which you ascended to the throne?

Or do you seek to imply that your position has some mysterious legion of supporters who are too numerous to be safely opposed?

 

[bilby]

When you start talking about "investing the money instead" you leave reality.

Imagine if I didn't wear underwear and invested the money instead?

Imagine if I cut my own hair and invested the money instead?

Although if someone was spending $5+ per day on underwear and was complaining about being poor, it might be among the first places I suggest they try to control their spending.

Of course it's not entirely the poor people's fault - apparently there's something found in underwear which many people find highly addictive.

Or perhaps the conditions in which poor people live make addiction far more likely, and chemical dependency is not the biggest contributor to addiction at all.

 

[EricK]

Although if someone was spending $5+ per day on underwear and was complaining about being poor, it might be among the first places I suggest they try to control their spending.

Of course it's not entirely the poor people's fault - apparently there's something found in underwear which many people find highly addictive.

Or perhaps the conditions in which poor people live make addiction far more likely, and chemical dependency is not the biggest contributor to addiction at all.

The addictive item found in underwear is not so much chemical as biological.

 

[NobleSavage]

Slight derail, but I think various governments in the US have gone too far. The tax is so high in some places that it makes for a great black market product. I remember reading that 60% of the cigarettes sold in NYC are smuggled.

When I was in high school they actually had an outdoor student smoking area. They had a rule that you had to be a senior and 18 to use it, but it wasn't strictly enforced. All the "burn out" kids hung out there. That was too lenient. 15 years later and a different geographical location it's illegal to even have tobacco on school property. This includes adults picking up their kids. They have warning signs posted and I think it's is too strict.

 

[barbos]

Slight derail, but I think various governments in the US have gone too far. The tax is so high in some places that it makes for a great black market product. I remember reading that 60% of the cigarettes sold in NYC are smuggled.

Same (in all states) tax could solve this problem. Where do that tax money go anyway?

 

[EricK]

Slight derail, but I think various governments in the US have gone too far. The tax is so high in some places that it makes for a great black market product. I remember reading that 60% of the cigarettes sold in NYC are smuggled.

Same (in all states) tax could solve this problem. Where do that tax money go anyway?

To wage a war on drugs?