top of page


Updated: Mar 6, 2022

Welcome to the initial blog post for Health and Wealth Management! I wanted to make my first post about something that encompassed both health and wealth. I want to highlight the costs of smoking, while simultaneously touting the benefits of compound interest, and what a difference this can make to you. Everybody knows the dangers of cigarette smoking and the high cost of a pack of cigarettes, but have you really thought about all of the other associated costs? Read through to the end for the eye-opening impact of compound interest and why it’s in an article about cigarette smoking!

The average cost of a pack of cigarettes in the United States is $6.96 per pack, with the average smoker smoking fifteen cigarettes per day, which equates to $.35 per cigarette. This averages $159.68 per month, or $1,916.25 per year. I don’t know where these “15 cigarette per day” people actually are. I always smoked at least a pack a day, and it seems like most of the smokers I know exceed a pack a day, but for the sake of this demonstration, we’ll go with the average cost of cigarettes and the average number of cigarettes smoked. As a quick aside, cigarettes average $12.85 per pack in New York. Yikes! I wouldn’t want to be a smoker living there!

It's hard to put an exact dollar figure on the cost of smoking, but you will pay considerably more for life insurance, as well as health insurance if you are a cigarette smoker. Some of the less obvious increased insurance costs are homeowners and auto insurance, as there is a greater risk.

We all know smoking causes cancer, heart disease, and a multitude of other diseases. What’s the true cost of that? Again, it’s hard to say. You have all the associated medical costs with treating cancer, heart attack, stroke, COPD, etc. At a minimum, you’re looking at hundreds of thousands of dollars. You may be lucky enough to have insurance that covers the financial cost, but most people don’t have the proper coverage, and if they do, guess what? It costs them a fortune because they have to pay smokers rates! Even if you have insurance that covers the cost of treatment, the insurance company still has to pay the claims, which just contributes to the exorbitant cost of healthcare for everyone, so now you are unnecessarily contributing to the problem.

What if you’re a woman who smokes and becomes pregnant? Do you quit while you’re pregnant or continue to smoke? If you continue to smoke, you are putting your baby at risk for low birth weight, a nicotine addiction at birth, developmental problems, and all of the medical bills associated with treatment.

If those costs weren’t bad enough, take into account that a smoker’s life expectancy on average is ten years less than that of a non-smoker. Wow! To put that in context, think about all that you could accomplish in ten years that you will never get to do. Think about the effects on the people who love you and will miss out on ten years of your life. Think about the fact that you won’t be here to see grandkids grow up, or in some cases, your own kids. There’s a great big world out there just waiting to be explored. Is it worth missing out on all of that to continue smoking?

We’re not done yet with the unintended consequences of smoking. Let’s say you smoke one cigarette per hour. During a normal workday, assuming you can smoke a cigarette in five minutes, you’re losing 40 minutes of productivity while you’re outside on smoke breaks. It’s not fair to the employer who’s paying you to work, it’s not fair to the non-smokers who are actually working and taking up the slack for what you aren’t getting done, and it’s not fair to yourself because you’re robbing yourself of time that you can never get back.

Contrary to what you probably think, I’m not here to bash smokers. I was one myself until eight years ago. For years, I refused to quit, not because I didn’t know the dangers of it, or because I thought it was cool or anything else like that. I truly enjoyed smoking, and I didn’t want to quit. I have two daughters and quit immediately both times I was pregnant, but after the girls were several months old, I went back to smoking. Why? There was no nicotine in my system that I was craving. I just enjoyed it, I was young enough to think that it didn’t matter, and I was stupid. Luckily, to date, I’ve had no repercussions from twenty years of smoking, and I hope that I never do, but I’m not in the clear. I truly don’t remember a defining moment that made me finally decide to quit. I just woke up one day and told myself that whenever I finished the current carton of Marlboro Lights, I was going to be done with cigarettes forever. I won’t lie and say it was easy, but it was more of a mental issue than a physical issue. As luck would have it, on the same day that I ran out of cigarettes, my beautiful niece Lara was born, so I suppose it’s fair to say that I had something to distract me from the intense cravings in those early days. I’ve never been a gum chewer, but I went through lots of gum for a couple of months, and I’m pretty sure I’ve never chewed a stick of gum since. I’m certain that I never relapsed on the cigarettes. I know some people who have quit for years and then in a rare social situation, they can smoke one or two cigarettes and then not smoke again for another year until the next slip-up. I’m actually envious of those people. They get to have that enjoyment every now and again without doing irreparable harm. If I were to pick up a pack of cigarettes today and start smoking, the first two or three cigarettes would taste terrible, but from prior experience, I know after those initial two or three, I would go right back to wanting to smoke a pack a day, so there’s no reason in the world for me to ever pick up a cigarette again, and I’m okay with that. I’m happier, I’m healthier, my skin isn’t covered in smoker’s wrinkles, I don’t smell like stale cigarette smoke, I’m much more productive, and I’m not spending $200 per month on cigarettes. Life is good!

If that scared you enough to quit smoking, but you think you need some help, check out Oklahoma Smokes. Try a pack of their cigarettes, which are designed to aid in quitting smoking. It will be the only time in your life that buying a pack of cigarettes is a good thing!

All of that was to illustrate a point (and hopefully to encourage all of you smokers to quit) and tie it in to the amazing power of compound interest and what it can do for you. For those of you who don’t know what compound interest is or how it works, I’ll give a brief overview here, but you can reach out to me directly for a more comprehensive explanation. Quite simply, compound interest is interest paid on both the principal amount of money and the accrued interest on the original money. Sounds simple, right?

Let’s start with a modest investing amount of $20 per month. Using an average rate of return of 7%, your $240 per year investment will be worth $9,838.32 in twenty years. While that may not sound like a tremendous amount of money, take into account that your actual cash investment was a total of $4,800. You made $5,038.32 just in compound interest. Now double that investment to $40.00 per month and do the math. In twenty years, you would have of $19,677.84 from a total cash investment of $9,600. For clarification, I can’t guarantee a 7% rate of return, but it’s a very reasonable likelihood. Use the compounding calculator link below to adjust the numbers so they reflect what you would be comfortable setting aside for investment purposes. You can edit the dollar amount, the length of time you are willing to keep the money invested to continue the growth, and you can adjust the estimated interest rate. I just used sample numbers to explain how compound interest really works.

I’m using small numbers to illustrate the point that anyone can start saving now in a compound interest account, whether it be a savings account, mutual funds, etc. Have you ever wondered how life insurance companies can afford to pay large death benefits when an insured dies? You guessed it. They invest the money you pay in the form of premiums in the stock market, where it’s earning compound interest, which grows the money exponentially. The longer the money sits, the more it grows.

I would venture to say that everyone needs to have an investment account, and that it should be opened as early as possible. Acorns is a simple platform to use and you can open an account in minutes and fund it with as little as $5. Don't put this off for another day. Once you start an investment account, you'll want to watch it grow!

Here's an example of how this works. The earlier you take out a whole life insurance policy, the cheaper the rate will be…for life. Using this knowledge, I’m going to go with actual numbers for a whole life policy on a baby less than a year old.

Baby Jordan is born in January of 2022, and her parents decide to take out a whole life insurance policy on her in February because they know that the sooner they buy the policy, the cheaper the monthly payment will be. In this particular scenario, a whole life policy for Baby Jordan with a $40,000 death benefit is going to cost $15.43 per month, or $185.16 per year. It would take a person 216 years to save $40,000 by simply saving that amount in a non-interest-bearing account. Buying a life insurance policy is one of the smartest ways you can protect yourself and your family. Obviously, we would expect Baby Jordan to live to a ripe old age, but the reality of the situation is everybody is going to die someday, whether through tragedy at a young age, or peacefully in their sleep at 110 years old. To quote Benjamin Franklin, “But in this world, nothing can be said to be certain, except death and taxes”. There’s truth in that statement whether we want to think about it or not. You purchase auto insurance and homeowner's insurance, hoping that you will never have to file a claim, but knowing that you need the insurance “just in case”. Theoretically, you could pay those premiums month in and month out for your entire adult life and never see a return on it. Life insurance, on the other hand, will pay the claim with 100% certainty on a whole life policy. Why would you buy auto insurance and homeowners insurance that might get used, but not buy life insurance that will certainly get used? Another important element to mention about the whole life insurance policy is that it builds cash value that you can borrow against, typically at low interest rates. Let’s say for example that you borrow $10,000 from your policy to pay off high interest credit card debt. Carrying 10,000 of credit card debt is costing you $2200 per year in interest payments alone, and you aren’t even touching the principal. You spent $2200 during the year and you still owe the original $10,000. Now borrow that $10,000 from your life insurance policy, pay off the $10,000 in credit card debt, eliminating $2,200 of payments during the year and eliminating your credit card debt. Repaying the loan at an estimated 5% rate will cost you $500 in interest fees, but in some cases, you don’t even have to pay the loan back. You want to though, so the borrowing capability is there when you need it again.

Remember when I said there was a tie-in between smoking cigarettes and compound interest? Imagine if you take the $159.68 per month that you are saving by giving up smoking and using that money to protect your financial future.

I’m going to use a healthy twenty-year old male (non-smoker) for this example.

$159.68 Total monthly budget for your financial protection

$ 50.28 per month $40,000 Whole life insurance policy that builds cash value which

can be borrowed against with low interest rates

$35.69 per month $250,000 Term life policy with a 30 year level term (payments

won’t increase)

$73.71 per month Money invested in mutual funds that will grow through the use of


It should be crystal clear at this point that the smart move is to quit smoking, save the $159.68 that you were spending on cigarettes, and use the money wisely to protect the future of you and your family.

The illustrations used in this article are strictly for the purpose of understanding how to use money to make money, even when you don’t have a lot to get started. There are multiple ways to structure your insurance policies and your investing strategy. Every situation is going to be different due to a person’s age, health, and reasons for financial protection. You may have a spouse and/or children that need to be protected in the event of your death, you may just want to have a burial policy on yourself, you may need to create a stream of income for retirement years, or any number of factors that are specific to you and your situation. Reach out to me today and let’s talk about what’s important to you, and how to achieve the end-goal. Oh, and by the way….if you aren’t a smoker, that’s okay too! You can give up that daily latte to fund your financial protection plan!

Go to our home page now and Subscribe to our newsletter so you will be notified of future posts. Please make sure to go like and follow our Facebook page as well.


Be the first to know!

Thanks for subscribing!

bottom of page