Too OLD To Start Investing? Not If You Do This!

Added: 2026-05-28

[00:00:00]We all know that when it comes to investing your money, the earlier you start, the better. But before you beat yourself up for not sacrificing your morning coffee to invest in index funds, it's worth taking a step back because there is a bit more to this argument. So in this video, we'll explore the difference between starting to invest early versus starting later and the potential cost of delaying your investments. But we'll also look at the issue with this comparison and why investing later in life can actually come with its own advantages. And finally, we'll cover how to catch up if you got a late start. Looking at the differences between starting in your 20s or 30s compared to starting in your 40s or 50s.

[00:00:42]Imagine two people who take very different approaches to investing.

[00:00:46]First, we have James. He starts investing at age 20 and puts away 10,000 pounds per year until he turns 30. After that, he stops investing completely and simply leaves his investments alone until age 60, allowing compounding to do all the work. So overall, James invests a total of 100,000 pounds across those 10 years. Then we have Janice who doesn't begin investing until she's 30 years old. But unlike James, she consistently invests 10,000 pounds every year right up until age 60, which means that over those 30 years, Janice contributes a total of 30,000 pounds. So despite investing three times as much money as James, who do you think ends up with more wealth by age 60? As this chart shows, James comes out ahead. And the really crazy part is that everything his portfolio earns after age 30 comes purely from compounding, not from adding more money. This is why people talk so much about the importance of starting early because mathematically, time can matter more than the amount you invest.

[00:01:51]But this is also true from a behavioral perspective. James only needed 10 years of disciplined investing habits, while Janice had to stay consistent for 30 years straight, all because she started later. Now, if you're in your 20s, you might be watching this thinking you're in a pretty good position. Or maybe you're realizing that you should probably start taking investing more seriously. But if you're older than James or even older than Janice, examples like this can feel pretty discouraging. Because instead of motivating you, they can sometimes make you feel as though you've already missed your chance. And when retirement suddenly starts feeling much closer, it's easy to fall into the mindset of wondering whether there is even any point investing at all. But that's exactly where this comparison starts to become a bit misleading. So, let's look at it from a different angle.

[00:02:43]Now, let's say you decide to follow Janice's approach. You want to enjoy your first decade of your career, focus on other priorities, and not worry too much about investing just yet. And to be fair, that's completely reasonable. But the question is, what does delaying actually cost you in the long run? As this chart shows, if your original plan was to invest 5,000 pounds per year for 40 years in order to reach your financial goal, delaying by 10 years has a huge impact. Instead of investing 5,000 a year for 40 years, you would now need to invest roughly 10,000 pounds a year for the remaining 30 years just to end up in the same position. And if you delay by 20 years, the numbers become even more extreme. At that point, you need to invest around 25,000 pounds per year for the final 20 years to reach the exact same goal. So, even though the delay is only 10 or 20 years, the amount you need to save later increases dramatically. And this principle has very little to do with the exact amount itself. It's really about timing. That's why this chart can be so useful. Once you have a rough idea of how much you need to invest to reach your financial goals, you can also estimate the financial cost of delaying those investments into the future, assuming a 7% annual return. And it also helps explain why people who start later often feel as though they need to work much harder to catch up because the cost of delaying investments isn't linear. It compounds against you over time.

[00:04:18]Now, it's important to recognize that there are some very real-world reasons why not everyone starts investing at 21.

[00:04:25]Most young people simply aren't wired to think that far into the future. Things like long-term planning, impulse control, and delayed gratification are still developing in your 20s. So, naturally, most people are focused on what's happening right now, not retirement decades away. And that's completely normal. That's why so many people spend their 20s prioritizing experiences, travel, social life, or simply enjoying life instead of investing. So, if you didn't start early, don't beat yourself up. You're not alone.

[00:04:59]So, if you're older and only just starting to invest, you might be wondering, "What do I do now? And is it still possible to catch up?" The first thing to do is let go of the past and focus on what you can do from this point forward. Almost every investor carries some level of regret. People who started at 30 wish they'd started at 25. And people who started at 25 wish they'd started at 20, and so on. There's always someone who started earlier. The problem is that a lot of people let that regret stop them from starting altogether. They assume it's too late when in most cases it really isn't. Because while starting early is ideal, older investors often have some important advantages that get overlooked. For one, many people are in their peak earning years later in life.

[00:05:45]Incomes are typically higher than in their 20s, and financial pressures can also be lower, meaning there's often more disposable income available to invest. That matters because while younger investors benefit from time in the market, older investors can often invest much larger amounts, and those higher contributions can go a long way in closing the gap. So, yes, starting earlier would have been better, but if you can invest significantly more now than you could have in your 20s, you can still make real progress towards your financial goals. And this is exactly why simple examples like James and Janice can be slightly misleading. In reality, very few people in their early 20s are able to consistently invest 10,000 pounds a year for a decade. Most simply, they don't have that level of income at that stage of life. So, let's look at a more realistic example. Let's say James invests 3,000 pounds per year starting at age 20, but unlike the earlier example, he doesn't stop at 30. Instead, he continues investing all the way until age 60. On top of that, he increases his contributions by 2.5% each year. Now, compare that to Janice who doesn't begin investing until age 40, but because she's further along in her career and in a stronger financial position, she's able to invest 10,000 pounds per year until age 60, also increasing her contributions annually by 2.5%. So, assuming they both earn an average return of 7% per year, who ends up with more wealth by age 60? Well, by retirement, Janice's portfolio would have grown to around 547,000, and personally, I would say that's a very solid retirement portfolio. But thanks to extra time in the market and the power of compounding, James still comes out ahead and ends up in a much stronger financial position overall.

[00:07:35]Now, if you're watching this and relate more to Janice, it can be easy to look at this example and feel as though you're behind. But, realistically, Janice is doing completely fine. She's still on track to retire with a substantial amount of money invested.

[00:07:49]Sure, it probably would have been better if she had started earlier, but better compared to what? Because that doesn't automatically mean she's behind. In fact, if we never compared Janice to James in the first place, most people would look at the $547,000 portfolio and say she's done pretty well for herself. So, there are two key points here. First of all, there's no doubt that starting to invest early is better. But, the reality is that when you compare yourself to other people, you'll almost always feel behind in some way. What's easy to forget is that simply taking the time to learn about saving and investing already put you ahead of a large number of people your age who aren't doing that at all. And it's also worth remembering that personal finance is personal. Everyone's situation is different and everyone's enough number looks different, too.

[00:08:38]While £500,000 might sound better than £200,000, the more important question is how much you actually need to live comfortably. Because in many cases, you don't need to aim for the absolute maximum to still be financially secure.

[00:08:53]Secondly, even if you do start investing later in life, as we saw earlier, you can still build a substantial portfolio.

[00:09:00]The advantage at that stage is often the ability to invest more each month thanks to higher earnings and fewer financial pressures. And even if you can't invest large amounts like in the earlier examples, your money doesn't stop working at retirement. For example, someone in their 50s starting from scratch and investing £300 per month into a global index fund targeting an average return of around 8% per year would end up with roughly £54,000 after 10 years. That might not sound like life-changing, but it's still £54,000 that wouldn't have existed otherwise.

[00:09:34]And importantly, that money doesn't stop growing at retirement. It can stay invested and continue compounding while you gradually draw from it. Of course, none of this is guaranteed, but it does show the broader point. Starting now and staying consistent can still make a meaningful difference, even if you feel late. So, if you're in your 40s or 50s and just getting started, your investment horizon isn't just 10 or 20 years. In reality, it's often much longer. And that's really the key takeaway. Run your own race. Starting later is far better than not starting at all.

[00:10:10]Now, in case you're wondering how investing in your 20s or 30s compares to doing it in your 40s or 50s, honestly, there isn't as much difference as you might think. In my view, the actual investments you end up holding don't look dramatically different whether you're 25 or 55. As long as your goal is still long-term investing. First things first, you need to make sure you're using the right investment account.

[00:10:34]Because at any age, investing is really about being as tax efficient as possible. Before we even get into the different options, it's worth saying that your workplace pension should usually be your first priority. It's one of the easiest ways to start investing and often includes employer contributions, which is essentially free money. So, if you can, try to at least match whatever your employer is offering. Otherwise, you could be leaving part of your compensation on the table. Once that's taken care of and you still have money left to invest, there are two main accounts to focus on. A stocks and shares ISA and a self-invested personal pension or SIPP.

[00:11:10]Both of these accounts allow your investments to grow in a tax-efficient way. The stocks and shares ISA is a tax-free investment account available through many different providers. You can invest up to £20,000 per year and [snorts] any growth inside the account is completely tax-free. Then there is the SIPP, which is a type of pension that gives you even more control over your investments. You can contribute up to £60,000 per year and again your money benefits from tax advantages while it grows. Now, when it comes to what you actually invest in, in my opinion, the stock market is still the strongest option for most people over the long term. It has a strong track record historically and very few other asset classes have matched its long-term performance. This is where index funds come in. Instead of trying to pick individual winners, index funds let you invest in a large group of companies all at once through a single investment.

[00:12:04]Some index funds include thousands of companies globally, while others are more focused and contain fewer holdings.

[00:12:11]But as a general rule, if you stick with a global index fund, you're putting yourself in a very solid starting position. Now, if you've enjoyed this video, check out this one next where I talk about an internal Vanguard paper that could completely change the way you invest forever.