What’s should be your strategy for primary market in FY25?

Are you a smoker? Do you smoke a pack of cigarettes — often considered moderate — a day? If you are, you are actually wasting your chance to build a sizeable corpus – not to speak of health benefits — over the years that is possible simply by staying away from the death sticks.

If that sounds all-too-familiar and avoidable nuggets of gyan that you have heard from parents, doctors or partners, spare a few minutes for the financial planner too.

A packet of 10 cigarettes of a “standard” brand costs Rs 170. Smoking a pack a day burns Rs 5,100 a month, or a nominal value of Rs 61,200 a year.

Now let’s see what this money is worth over time.

Let’s take a conservative investor who puts his money only in Public Provident Fund, considered the safest of guaranteed-income schemes. It now carries an interest rate of 7.1% and the entire corpus —principal, interest and maturity value — is tax-free.

If one invests Rs 5,100 a month, or Rs 61,200 a year, the result is a sum of Rs 16.59 lakh over 15 years, the minimum period maturity period of the scheme.

If one has the patience to continue the nominal investment for 25 years, the amount jumps to Rs 42.05 lakh. Stretch by another 5 five years and the maturity value jumps to Rs 63.03 lakh.

Remember, we are at the highest safety rung. If you trade it off a bit and invest in mutual funds, the returns are higher.

Consider an SIP of Rs 5,100 in mutual funds.

If you can stop smoking and invest that amount every month for 25 years, the total value of the investment stands at Rs 68.23 lakh, even assuming a 10% return. Stretch it for 30 years, and the value rises to Rs 1.16 crore.

But experts describe 10% as very moderate and conservative, suggesting 12% is a realistic rate for diversified funds.

At that rate, the value balloons to Rs 96.77 lakh in 25 years and Rs 1.80 crore in 30 years.

“Diversified funds can definitely give 12% return. A return of 10% is conservative and highly achievable,” says Prasunjit Mukherjee, chief ideator myplexus.com

“It is difficult for a smoker to quit the instant gratification that a smoke provides. But if one can actually do it, one can actually build a large corpus, something that one can sustain a decent lifestyle after retirement, almost entirely from savings done in this way,” said Nilanjan Dey, director, Wishlist Capital Services.

“If one can invest in a disciplined way for 25-30 years, one can take at least three market cycles,” added De.

And, of course, we are not counting “health is wealth” in the above calculation.