Disclaimer: This post is tagged in “humor “category.

Business today (Feb 11) had one article about “why you to stop pulling your wallet for everything”. That includes movies, food, cigarettes etc. To make the article more attractive some statistics were there too. They were highly optimistic calculations, for example if you don’t eat pizza for a year how much you’ll end up saving after 30 years. Article was completely high hopes for me and my friends. Majorly because of the reason we are surviving this phase life solely on “strict” junk food.

Let’s not analyze all of them. Take their case study on cigarette.

If you are smoking a packet of cigarette, say classic milds

Cost per day ————————————— 80

Cost per year – ———————————29200

If you invest the same

liqid fund (say interest rate of 5% pa) —- 19, 40,014

Provident fund (interest rate of 8% pa) — 33, 07,870

BSE sensex (assume 18% pa) – ——– 2, 30, 95,681

Stock portfolio (with 20% pa) — ——-3, 45, 10,941

Let’s go a patriot ways.

In that the vendor of cigarette gets a commission of 10 % of total cost. You would not buy it with the same vendor for thirty years. Still for calculation lets assume you do. Also you are the only one who pull wallet for everything, not him. He is a human as you, and wish to gain lot of money through BSE sensex. He invests his (say) 30% of this particular income, and gains 1,385,741. (Same calculation as above, I dint invent math…!). Rest 70 % of his income goes for his wife’s kitty parties, school donation for his son, make up kit for his daughter etc. That would add up to 3,333,395. See, you are the reason for making four dreams coming true at least partially.

Next comes the ITC. Indian Tobacco Company is said to be one of the greatest enterprise ever established in India. One of my friends says, they used to halt their road trip and salute whenever an ITC comes on the road. 70 % of your investment (that would be purchase of cigarette here) will go to ITC. It employs thousands of workers for production, spends millions of rupees on tobacco, paper, advertisement etc. So imagine hoe may jobs will be created, just by you. So they get 20440 of your 30 years purchase. They too have intelligent directors and them to will invest, say 30 % of what you gave them. BSE sensex shall give them 48, 50,093 by end of 30 years. Continue reading “A patriots calculation” →