sueddeutsche.de
Long-Term ETF Investment vs. Smoking Costs: A €500,000 Potential
A Verivox model shows that substituting daily cigarette expenses (€8.70/pack) with an MSCI World ETF investment for 30 years could generate over €500,000, while smoking costs could exceed €169,000 over the same period, assuming a 3.7% annual cigarette price increase and a 7.5% annual ETF return.
- What are the immediate financial implications of replacing daily cigarette purchases with a long-term ETF investment, according to the Verivox model?
- A German study shows that foregoing daily cigarette purchases (approximately €8.70 per pack) and investing the savings in an MSCI World ETF for 30 years could yield over €500,000. This calculation assumes a 3.7% annual increase in cigarette prices and a 7.5% annual ETF return, with reinvested earnings.
- How does the Verivox model account for factors such as inflation and investment risk to assess the long-term financial impact of replacing smoking with ETF investment?
- The study highlights the significant long-term financial benefits of avoiding cigarette consumption and investing the savings. Over 30 years, the cumulative cost of daily smoking exceeds €169,000, while the potential ETF investment grows to over half a million euros due to compound interest. The model assumes consistent annual growth rates, however.
- What are the potential limitations or risks associated with relying solely on this model to predict long-term financial outcomes, and how might those be addressed by investors?
- This model underscores the power of compound interest and long-term investment strategies. While market fluctuations impact actual returns, the considerable difference between smoking costs and potential investment gains emphasizes the importance of financial planning and disciplined saving. Taxes on investment gains should be considered.
Cognitive Concepts
Framing Bias
The headline and introduction immediately highlight the substantial financial gain from investing instead of smoking. This framing emphasizes the financial aspect and potentially downplays the health risks associated with smoking. The article structures the narrative to showcase the impressive growth of the investment, potentially influencing readers to prioritize financial gains over health considerations.
Language Bias
While the article uses factual figures and data, the choice to focus on a large sum of money ("mehr als eine halbe Million Euro") at the outset could be considered a form of loaded language, potentially influencing readers to see quitting smoking primarily through a financial lens rather than a health one. The repeated emphasis on the large potential financial gains could also be viewed as a form of loaded language.
Bias by Omission
The article focuses heavily on the financial benefits of investing the money saved from not smoking, but omits discussion of the health benefits of quitting smoking. It also doesn't address alternative investment strategies or the risks associated with ETF investing, such as market volatility. While acknowledging that returns may vary, it doesn't delve into the potential for losses.
False Dichotomy
The article presents a false dichotomy by framing the choice as solely between smoking and investing in ETFs. It doesn't consider other uses for the money saved from not smoking, or other investment options.
Sustainable Development Goals
The article highlights the significant health and financial benefits of quitting smoking. By ceasing tobacco consumption and investing the saved money, individuals improve their health outcomes and accumulate wealth, contributing to improved overall well-being. This directly aligns with SDG 3, which aims to ensure healthy lives and promote well-being for all at all ages.