The Power of Now: Investing Doesn't Have an Expiration Date
Prelude to investing
Life has to happen first before we have the money, the resources, and the time to make a plan. So, the best time for most of us to invest is now. Beginning your investment journey today could be one of the best actions you will ever take for your future self. It's a step towards financial independence and security, something to be proud of.Â
The other great thing about investing when you’re a bit older is that you can park the FOMO and angst and just get on with the job of building freedom.
The problem with investing too young
Investing is most certainly not only for the young. As an investor, I know what the younger me was like; she was full of enthusiasm, arrogance, and notions. Unfortunately, she compounded these with a distinct lack of skills, patience, or self-control. She lost me more money than she earned me in my early years.Â
Another great superpower about investing when you’re a bit older is that you can park the FOMO, angst of youth and just get on with the job of building freedom.Â
If you think it's too late, you're probably at the exact right age to invest thoughtfully, with discipline and patience. These are the qualities of the most successful long-term investors I know. It's not about timing the market, it's about time in the market.Â
Still not convinced?Â
Here are 3 reasons Why It's Never Too Late to Start Investing:
We are living longer.Â
The average Irish person lives to be over 82 years old, 17 years of retirement ahead of us. With better quality health care and high living standards, many of us could, in all probability, live to be centenarians. This means that your investing timeline might be substantially longer than you realise. Money invested at 40 may not be needed for another 40 years. Now, that's a respectable growth horizon in my book.Â
Compounding growth
Even if you start investing later in life, your money can grow through compounding. The earlier you start, the more time your investments have to grow, by starting where you are today can still yield solid returns over time, mainly if you invest consistently and with a plan. There's still plenty of potential for growth.
More resources to invest.
With a few years of living under our belts, we often find ourselves in a better financial position to save. Salaries tend to trend upward as we gain more experience in our careers. With fewer life expenses that come with starting our life, like high-interest loans, home deposits, and creche fees, they may have more income freed up to invest. This allows for more significant contributions to pensions or investment portfolios, helping to make up for lost time.
While there are many positive aspects to investing in mid- or later life, there are some things to take into account.
"The secret of getting ahead is getting started."Â - Mark Twain
Things to consider if starting your investing journey later in life.Â
Risk Management
As you age, the ability to recover from investment losses diminishes. Therefore, creating a plan to maintain a balanced portfolio with a mix of higher-risk and lower-risk investments is crucial to protect your capital while still allowing for growth.
Pro Tip:Â Never invest any money you are not willing to lose.
Get Educated and Understand what you are doing
Many potential investors feel intimidated by the complexities of investing. Levelling up, reading, researching, and skilling up your knowledge of investing is the best medicine for this particular hurdle. Investing is a skill that anyone can learn and one of the most valuable skills to have in your money toolbox.Â
Pro Tip: Even if you are not ready to invest this year, understanding the investing landscape and being comfortable with the process will help you make informed decisions when the time comes.
Final thoughts
Starting to invest early has advantages, the most pertinent being the long time horizon and the ability to make mistakes quickly and early and still recover well. However, it is certainly not too late to begin investing. Experience, more resources, and a practical attitude to life are just the tip of the iceberg when it comes to having the edge as a more seasoned adult. With the right approach and mindset, you can still build a solid financial foundation for your future.
And dare I say freedom?Â
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