Quit Smoking and Start Investing: How to Make Money on Your Former Habit

smoking cigarettes

Smoking cigarettes is a particularly awful habit that 36.5 million Americans partake in on a regular basis. As a former smoker, keeping up the habit was pretty expensive, as were a couple of avoidable trips to the doctor. That’s why I decided to quit for good in 2013.

Looking back, however, I’m quite amazed at how much money I actually spent on cigarettes. In my home of New York City — the most expensive place to smoke in the country — cigarettes cost an average of $13 a pack due to high state and city taxes. Since I smoked roughly half a pack a day, I shelled out about $2372.50 each year just to pay for my habit. In perspective, that’s a few months of rent, nearly two years of subway rides, or half of a Hamilton ticket.

It was a waste of good money.

But what if I invested that money instead of smoking? For starters, I wouldn’t have been out $2372.50 a year. In fact, I would have ended up with more money in the end, thanks to gains made over time.

How much? Let’s take a look.

If a person living in NYC hypothetically quit smoking a pack a day on January 1st, 2016, they would save $4745 a year.

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If that person smokes half a pack a day, they would save half that amount, or $2372.50 a year. This assumes that buying a single pack of cigarettes costs $13 including all taxes and fees.

If that same person invested $4745 in SPY at the start of the year, they would have $5303.01 at the end of 2016.


SPY is one of the most popular exchange traded funds (or ETFs), as it follows the S&P 500 index. Last year, SPY increased by 11.76% from the beginning of January to the end of December. This means the original investment of $4745 grew by $558.01 over the span of a year. To use smoker’s math, this would pay for around 43 extra packs of cigarettes.

If you quit smoking, you could easily save for retirement.


Saving $4745 a year is nothing to scoff at. Having that money make money over a year is nice, but keeping it invested over the course of decades will theoretically net you much more than $558 a year. As long as you keep your investments in the market and don’t take from them over the years, you could retire earlier, wealthier, and healthier.

The cost per pack of cigarettes is different in your area, but the rate of return is the same.

If you quit smoking a pack a day on January 1, 2016 in a place where cigarettes cost $5 and invested your smoking money at the start of the year ($1825), you would end up with $2039.62 at the end of the year. This would not only save you from spending money on cigarettes, but would net you an extra $214.62.

There are a few things to remember: First, gains and returns on your investment are not guaranteed. The stock market goes up and down, and though the S&P (and SPY) historically increases over time, it can decrease, too.

Second, you don’t need to invest all that money at once. You can invest any time during the year and at any duration or amount, though SPY is currently valued at around $227.60 per share as of this writing.

Last but not least, if you’re having trouble quitting smoking, there are numerous free resources to help you overcome nicotine addiction. I personally quit cigarettes cold turkey, though the effectiveness of a method depends on the person. Know that you’re not alone, and once you’re able to stop smoking, you’ll be on track to a better financial future in no time!