A couple of my acquaintance recently struck up a conversation in a store. They asked how real estate here in Eugene, Oregon was going. They expressed a wish to buy a home someday....when they could get a down payment together.
I'd heard this from my renter friends before. But at this moment I had just watched them buy a pack of Marlboros each. So, ever so gently, I suggested I knew where they could get a down payment. Of course, wide-eyed, they asked where.
My answer was given with a smile: "You could quit smoking." 
Their eyes showed shock.
That was understandable: It was an ambush of sorts.
But I went on to tell them that if they diverted the money they spend on cigarettes into a savings account, they could have a down payment within a year or two.
They thought about that suggestion for ....maybe ten seconds. Then they hurried off to continue their smoke-filled lives.
But that got me wondering:
a down payment?
So I did a little research at that Albertson's store:
The cheapest cigarettes (Pyramid brand) were $4.13 per pack. At a pack-a-day that's $1507 per year for one smoker.
The most expensive (American Spirits) were $6.99 per colorful box. That's $2551 per year for that big-spender.
The average of those two prices costs $2029 per year.
My friends' Marlboros cost them $5.45. That's $1989 X 2 people or $3978 per year.
In this area, the median home price has now slid below $200,000. Let's just use that nice round number. A minimum down payment for that median-priced home might be 3.5% or $7000.
That would take my nicotine-addicted friends one year and nine months to save up - if they stopped smoking tomorrow.
A single Marlboro man could knock out the down payment for a $100,000 home (say, a three & one REO) in that same one year and nine months.
Now there are lots of good reasons to quit smoking. This is just one. But despite numbers like these many smokers will go through life harming not only their health but their pocketbooks, content to
rent for life.
The dollar cost of smoking goes well beyond the lack of a down payment for a home.
If one person smokes a pack-a-day from age 18 to age 68, that fifty years of smoking will, at today's Marlboro prices,will cost $99,450 ....a Kool $100,000.
Two people X that $100,000? In my market, they could completely pay for that median-priced, $200,000 home.
Alternatively, my married friends with the matching habits could pay cash for
a new ($20,000) car every five years for the price of their addiction.
Let's face it. Smoking is a real drag.
These are good, hard-working (indeed, workaday) people. They deserve better than their habit gives.
Do you suppose the person who offered them their first cigarette (allowing the Camel into the tent) explained the long-term cost of sucking on that little stick?
Probably not.
You probably aren't living in Eugene, Oregon. But the concept is the same.
Most people don't buy their cigarettes by-the-carton anymore...too expensive. But I witnessed a gal buy two cartons of Marlboros the other day. She was here from Connecticut, where she said cigarettes cost $8.50 a pack. (That's $3103 per year, $155,125 per lifetime - assuming one starts when it's first legal and dies of lung cancer at 68 ....instead of smoking on into retirement.
Oh, speaking of retirement: Just think what a person who already owns a home and a car could salt away, if only.....
***********************
Jim Hale
Principal Broker / Owner
Graduate, REALTOR Institute e-PRO
2012 Member, Million Dollar Club of Lane County
2012 Member, Real Estate Brokers Million Dollar Club
actionagents.net
1715 Linnea Avenue
Eugene, OR 97401-1962
Office: 541-484-0219
Direct: 541-543-9991
Fax: 541-485-8068
Eugene Oregon Homes / Real Estate jim@actionagents.net
All statistical market data is based on information from the RMLS of Oregon for the dates indicated.
© 2012 All Rights Reserved / Licensed in the State of OREGON
I'm sure your idea went up in smoke with them. However, it's a good idea.
Jim - you could probably put your analysis to work with any bad habit --- if you really want something(a house in this particular example) there are ways to achieve it. Write a plan and work that plan everyday!
It's the little things in life that make a big difference.
Thanks Jim, blog is a nicely presented example to win.
cheers
Nor
www.envoycapitol.com
Hi, Jim! I like the way you think even if they didn't! I glanced at the locked case of cigarettes in the store the other day and there were actually some close to $9! Glad I quit almost 30 years ago! I'm suggesting this post but I really thing it should be public. Who knows, it might just be the motivation someone needs! :)
Larry -
Yes, up in smoke. Probably couldn't filter out the gem of truth.
Michael -
We often refuse to see the big picture...especially where our own pet habits are concerned.
Nor -
Thank you. Your pix shows love. The truth is most people hate their cigarettes.
Val -
Maybe I will make it public.
Jim, just small change in habits can bring in a big change - in lives of many people and in our economy, too.
Don't forget one pack a day people are hard to find. I have seen many that smoke 1 1/2 to 2 packs a day.
Praful -
Indeed, it was merely an increase of ill-considerd housing demand amounting to 5-10% of the total that sparked the boom-then-bust.
Todd -
I'm sure you are right. There are many who smoke more per day. But there are some who limit their smoking to maybe a half a pack now that smoking is prohibited in so many places. And some buy only the cheapest they can find....every day.....lest they run completely out - never feeling good about spending for a carton....or even for a second pack....often thinking they will quit - literally tomorrow.
Many spend a buck or more additionally every day just making that mandatory trip to the store for that single pack.
Hi Jim,
Some folks would rather stay where they are and complain then make a wise choice. An thanks for picking on Smoking rather than one of my vices. ; )
Dan -
I could have picked on beer and soda pop and potato chips and.....
Jim, To a non smoker this makes absolute sense! It amazes me how much money this habit costs not only in the price of cigarettes, but in the associated costs as well. It is mind boggling! Good post!
Tony -
It makes absolute sense to a smoker, too. But the addictive properties of these terrible products is so great that the users cannot see their way into a better future.
We rant about the drug cartels in other countries who make mayhem in many criminal ways as they seek to addict Americans to their terrible products. And some of those illegal products are more dangerous than tobacco. But few are any more addictive than the nicotine in cigarettes. In fact, the nicotine in cigarettes manufactured for sale here has recently increased as the tobacco giants seek to hang on their domestic customers. I'm not sure anyone knows how much of the addictive substance they put into the many cigarettes they export.
These tobacco cartels are shipping their lethal wares to other nations in a bigger and bigger way. Even though tobacco use is declining here, it has grown by leaps and bounds in many countries....where they still think it's the cool thing to consume. Tobacco advertising in electronic media in many of those countries is still legal.
We can't understand why some countries allow drugs to be produced there for shipment here. In many of those countries, those drug products are their main cash export....sometimes reaching 40-70% of their national GDP.
In this country, the tobacco companies are big business, especially in some regions, but they are small potatoes in the overall national economy. Yet, we seem unable to do the right thing - which would be to shut them down at the point of origin or manufacture.
The rest of the world sees our war on drugs as highly selective and completely hypocritical.
Even worse, so do many of our own youth - who say let's make everything legal.