The NHS recommends that men do not drink more than three to four units of alcohol a day and that women should not exceed two to three units. A typical pint of medium-strength lager is approximately two units. Not exceeding NHS guidelines, a person can reasonably expect to drink one and a half pints a day or one and a half glasses of red wine.
The price of a pint of beer can vary greatly from one place to another but assuming the average cost of a pint is £2.50, then a regular drinker can expect to spend a whopping £6,843.75 on alcohol over five years.
If the drinker stayed sober, saved the £114.06 they would have spent over the month, then invested that amount in SABMiller - the company behind popular global beer brands Fosters, Grolsch, Coors and Peroni - they would now have £12,106.27.
Performance of stock vs index over 5-yrs
Source: FE Analytics
If they weren’t completely satisfied with their healthier lifestyle then they might be interested to learn that the £5,263 profit would enable them to drink for free for the next 3.8 years.
The study highlights the benefits of investing relatively small amounts regularly. However, it should also be noted that investing in just one stock is an inherently risky strategy.
If our hypothetical drinker had got their choice wrong and had instead invested in C&C Group – the company behind Magners, Bulmers and Tennent's – then they would only have seen a profit of £318.07 over five years.
The same investment in Marston’s and Punch Taverns would have lost money.
Drinks and pubs companies have suffered more than most in the last five years as the recession has forced consumers to cut expensive nights out. SABMiller has had success from its presence in emerging markets where growth has remained robust over five years.
A recent FE Trustnet study highlighted how the average smoker could’ve made £50,000 if they’d stubbed their cigarettes out and instead invested the money they spend on cigarettes in the FTSE 350 Tobacco index.