Is It Too Late To Start Investing? Find out! (2023)

It is never too late to start investing, whether you’re wanting to invest in the stock market, property, crypto or any other market. Your goals may change as you progress through your 30’s, 40’s, 50’s, and 60’s however you can still benefit from potential investment gains at any age and maximise your wealth.

“Is it too late to start investing?” is a common question people ask in the realm of personal finance. One of the main things to consider will be your tolerance to risk. As you get older, you’ve got less time to recover from any potential losses so the level of risk you may want to take on will most likely reduce. However doing nothing is also an investing decision.

In this post I’ll run through some other factors you should consider if you think it is too late to start investing to help make a more informed decision.

Should I Be Worried If I Haven’t Started Investing?

The whole purpose of investing is to maximise your wealth so you can afford to spend money on things and experiences later in life. This could be anything from funding your retirement to making sure you can help support your children through life events like university and getting married.

If you have managed to achieve any of these things just through saving alone and not investing, then that’s brilliant. Really the only down side is opportunity cost, that is the money you could have made had you started investing earlier.

Don’t Have the Knowledge to Invest?

One obstacle that often stops people from investing is that they don’t have the right level of knowledge. This can be knowledge of any type of investment including stocks, bonds or even property.

If this is holding you back, just know that everyone starts somewhere and even researching the type of investment that you’re wanting to start investing in is very useful. You’re also reading this post to find out if you’re too late to start investing so you’re already on the right track.

There are tons of free resources and groups online that you can use to help increase your knowledge. If it’s the stock market you’re looking to invest in, I’ve created this post on how to get started investing in the stock market as a beginner that you may find useful.

Compound Interest – 8th Wonder of the World

Holding your money in a bank account or long term savings account might get you a 1% return on your money if you’re lucky. Many bank accounts are even at zero interest or only offer a return for the first £2,000 held within the account.

Getting a higher percentage return, however small, can have a huge impact over a long time frame. This is due to compound interest, which is effectively where your money makes money, and then that additional return once reinvested makes more money, which becomes and endless upward cycle.

In the table below you can see the difference a few percent can make to your total investment pot over a long period of time.

Compounded Return on £10,000	5 Years	10 Years	30 Years
0% return	10,000	10,000	10,000
1% return	10,510	11,046	13,478
2% return	11,041	12,190	18,114
3% return	11,593	13,439	24,273
5% return	12,763	16,289	43,219
7% return	14,026	19,672	76,123
10% return	16,105	25,937	174,494

Here you can see that if you have £10,000 and put it in a bank account that has zero interest, unsurprisingly after 30 years, you’ll still be at £10,000.

If you were to invest that same £10,000 and get a 5% return over the 30 years, that £10,000 would become, £76,123, quite the dramatic difference. Even after only 5 years that £10,000 would have increased by over 27%.

Hopefully this helps to demonstrate why investing is a critical aspect of saving and you can still benefit from compound interest at any age. It is often said that the best time to start investing was 10 years ago and the second best time is now.

Is it Safe to Invest?

Each investment comes with its own level of risk that can vary quite dramatically based on a variety of factors from everything from your level of experience to the underlying asset class.

Some investments are inherently more volatile and risky than others. I’m sure you’ve all heard or may have even been impacted by the huge stock market drops in 2007 and 2008 or possibly even heard of some guru that bought a stock which increased in value 10 times in a week. What you probably didn’t hear was how much risk each person was taking within their investment portfolio.

One of the biggest hedges to increase your level of safety when investing is to try and gain as much knowledge about what you’re wanting to invest in as you can.

No investment is 100% guaranteed and all those that claim to be guaranteed should be investigated thoroughly before you make any commitments. The more you can learn about what you want to invest in, the better equipped you’ll be to avoid any potential pitfalls.

If you ever do need any specific advice about investing, make sure to contact a financial advisor that can give you specific advice.

Investing to Help Save For Retirement

One of the biggest reasons many people start investing is to save for retirement. Saving money in a bank account can only get you so far, especially with the low interest rates currently being offered by some banks. Some interest rates are even at zero!

If you’ve read the point on compound interest in this post above, you can see how small increases in percentage return can have huge impacts on the size of your investments over time.

A lot of people also have a pension that is invested in a mix of stocks, bonds, property and possibly even cash. This is usually set up by employers and is contributed to each month as a percentage of salary.

Some employers have very generous pension schemes, whereas others don’t and the more knowledge you can get about investing, the better you’ll be able to tell the difference and possibly even change it.

For example, knowing how fees impact the overall investment performance and how different types of investments perform over long periods of time can help you make more informed decisions about how your pension is invested.

Also knowing how much you need to save for retirement will also have an impact on what you invest into and how much risk you’re willing to accept. This post I’ve written about what size pension pot you need to save for retirement should help.

Youngest Age You Can Start Investing?

Most countries, including the UK, have a minimum age restriction of 18 before you can start investing investing in your own right. There are products available like Junior ISA’s that allow parents to invest on behalf of their children that can be accessed on their 18th birthday.

Very few people at 18 are thinking about investing, although 18 is definitely a great time to start as any money that is invested has a very long period to grow with compound interest, even starting with small amounts of money. So if you have anyone in your family around this age, if you think you’re too late to start investing, giving them the knowledge you’re learning can be life changing.

Should I Ever Stop Investing?

The decision of whether to stop investing will depend on your personal circumstances. The reason behind why people may want to stop investing will be to lower the amount of risk they have in their portfolio.

There may be other reasons to temporarily stop investing, such as if you have any high interest debt. Having credit card debt, which can be upwards of 25% to 30% interest can add up fast and putting money towards paying off this instead of investing in effect is like making a return aligned to what interest you’re being charged.

Unless you’re stopping for a specific reason like paying off debt, building up an emergency fund or paying more a major life event, just remember that inflation is an invisible tax on your money.

Each year inflation is around 2%, and recently that figure has become 5%+ or possibly even considerably higher depending on how it is measured. This means that the same amount of money each year can buy fewer and fewer products and services.

Summary – Is It Too Late to Start Investing?

Overall, I hope you can see that is never too late to start investing. The question of whether you should start investing and what you should invest in will all depend on your investing goals.

This post is just intended as guidance to help answer some common questions and get you thinking about what other questions you could ask and where you should keep researching. If you do have any specific questions about investing, make sure to contact a financial advisor that can work with you to understand your current situation and provide specific advice to suit your needs.