Is It Ever To Late To Start Investing?

As humans, we tend to overestimate how motivated we’ll feel in the future. You’ve probably said it before: “Diet starts Monday.” “I’ll hit the gym tomorrow.” And of course, “I’ll get my finances together once I make more money.”

We imagine that at some point, maybe next week, next year, or once life calms down, we’ll suddenly have the time, energy, and discipline to do all the things we’ve been putting off.

But here’s the thing: that magical moment rarely shows up on its own. You have to create it. 

So let’s talk money.

When I graduated college and got my first job, retirement felt like a lifetime away. But even then, I knew I should probably start saving something. It wasn’t much, but I put away what I could. Meanwhile, I’d hear coworkers say things like, “I’ll start investing once I get a raise” or “I’ll figure it out later.”

That got me thinking, how hard is it to catch up later? And is it ever too late to start investing?

Let’s look at an example:

Meet Johnny.

Johnny is 22, fresh out of college, and just starting his career. He’s not making a ton, but he still manages to invest $500 a month in his 401(k) and brokerage account.

Now meet Jerry.

Same age, same start, but Jerry decides to wait until he’s earning more. He doesn’t start investing until age 32. By then, he’s making more money and can invest $1,000 a month. 

Pop quiz:

They both invest until age 62. That’s 40 years for Johnny and 30 years for Jerry. Who ends up with more?

Answer:

When Johnny turns 62, he’ll have $1,242,758. Jerry, despite investing twice as much each month, ends up with $1,176,064.

Even though Jerry contributed more each month, starting later cost him over $67,000.

Why? Because time is the most powerful force in investing (but don't get it confused, how much you contribute is also very important). The earlier you start, the more time compound growth has to do its thing.

What Would Alan Do?

A lot of people focus on the dollar amount; $500 a month, $1,000 a month, etc. That’s fine, but personally, I like to think in terms of a percentage of my income.

Why? Because (hopefully) your income will go up over time.

Let’s say you’re making $80,000 a year, and your goal is to save and invest 20% of that across your 401(k), a taxable brokerage account, and maybe a high-yield savings account. That’s $16,000 a year. Now fast forward a few years, you’re making $100,000. If you’re still following that 20% rule, you’d be saving and investing $20,000 a year. Your contributions should grow as your income grows.

But if you just stick with a fixed amount, say $1,000 a month, you might be saving less, proportionally, than you should be. That’s how lifestyle creep can sneak in.

Hot Take: Lifestyle creep isn’t always bad. We only get one shot at this life, you should enjoy it! But if lifestyle creep crowds out your ability to save and invest, then yeah, it becomes a problem. 

That’s why I focus on percentages instead of fixed dollar amounts. Because here’s the truth: If you can’t save $10 when you make $100, you’re not magically going to save $10,000 when you make $100,000. 

So… is it ever too late to start investing?

No. But the longer you wait, the more you miss out on the most powerful tool your money has: compound interest.

Start now. Start small. Just start.

Note: This is purely educational and is not investing or tax advice.