Investment is something people have all sorts of feelings about. Because most people understand that an early start is one of the key ingredients in the healthy investment recipe, those who did not have the opportunity or forethought to start investing at a young age may find themselves discouraged as time goes on. This discouragement may convince this sort of person that investing isn’t worth it, at this age. This, however, is usually not the case. Even though it’s true that many decades give investments many opportunities to succeed and grow, people can still achieve significant returns during shorter periods of time.
A recent survey by Lottosend indicates at what age most people feel that an investment portfolio should be initiated. The results are as follows: 20’s 59.7%; 30’s 22.4%; 40’s 8.7%; 50’s 9.2% (18-24: 20’s 49.3%; 25-34: 20’s 52.6%; 35-44: 20’s 59.8%; 45-54: 20’s 64.5%; 55-64: 20’s 67%; 65+: 20’s 71.1%). The latter set of numbers indicates the percentage of certain age groups that said that people in their 20’s should start investing, more so than later ages. This demonstrates that this notion becomes more clear as people age. Older people often express regret at not having invested sooner. But again, this is no reason not to invest at all. There are still many advantages to investing later in life. Here are three.
- Older People May Have More Income to Invest. Though young people have the advantage of time when they start investing, they often don’t have other key element: disposable income. Investment allocations should only be made with income that can be set aside. Older people tend to have more money in savings than their younger counterparts. This isn’t always the case, but when it is, it allows older people to initiate investments which pay off much earlier than younger people with their comparatively smaller contribution capabilities.
- Older People May Have Workplace Support. As people get older and progress in careers, they are more likely to be presented with options like a 401(k). These workplace sponsored tax protected investment accounts often feature employer matched contributions. This phenomenon doubles every bit of money squirreled away by the account holder.
- Older People Have Had More Time to Manage Debt. Young people have a lot of reasons to carry debt. They may have had to pay for school with loans, they may have children, they may have a new mortgage. The interest associated with loans and debt sometimes negates the efficacy of investment dividends. If a young person has credit card debt, there is almost no way to invest efficiently, since more money will be lost through credit card debt interest than can reasonably be earned through normal investment means. If older people have their financial houses in order, they may invest very efficiently, even if they are just beginning.
For all of these reasons, older people who have not yet begun the investment process should not become discouraged. Investing can begin at any age, with real benefits making it worth it for nearly anybody.