Is It Too Late to Start Investing?
Investing is a great way to get your money working for you. With a solid investment strategy, you have the potential to increase the money you originally put into your investment, possibly making it easier to cover the cost of retirement, college, and more. However, many people worry that it might be too late to start investing, especially if they're aiming for retirement savings. Even if you're nearing retirement age, you can still take advantage of many types of investments that may improve your savings.
The Investment Time Horizon
An investment time horizon is the amount of time you expect to hold an investment before you cash it out. Your time horizon may be different depending on your specific goals and the length of time until you meet them. For example, if you'll be sending a child off to college in ten years, you may have more time to invest than if you're planning to send your child to college in just three or four short years. Likewise, you have a longer time horizon for retirement investments if you start investing in your twenties and thirties than if you're playing catch-up in your forties and fifties.
Risk Versus Return in Investing
Risk and return often directly correlate when you're choosing an investment strategy. High-risk investments may have the potential for a higher yield, especially in the short term. But they also have a much higher potential to decrease in value. Sometimes, that decrease can be substantial.
Many investment professionals recommend decreasing your overall risk level as you get closer to the time when you will need to take advantage of those funds. For example, if you're within five years of your retirement, you may want to decrease portfolio risk levels to help ensure that your investment remains stable until you're ready to retire.
Start as Early as Possible
Ideally, when you're launching an investment strategy, you want to start as early as possible. The longer your money remains invested, the more potential it has to gain for you. Compounding interest means that after several decades of investment, your money may be much greater than your initial investment. An early start also helps ensure that you have more to set back over time. When you prioritize investing early, you're often in a better position to keep investing.
It's Never Too Late to Get Started
Even if you started your investment strategy later than you intended, it's not too late to get started! There are several investment strategies designed to help increase income for your existing funds. Furthermore, even though you may not be able to take care of the compounding interest you could have otherwise earned, getting started now may mean higher interest than if you put off getting started with an investment strategy.
What to Expect If You Start Investing in Your 50s or 60s
If you start investing in your 50s or 60s, you will have a shorter time horizon to hold onto those investments and allow them to generate income for you than if you had started investing in your 20s, 30s, or 40s. However, you still have the potential to make substantial money through your investments, including funding your retirement account.
Some things to consider:
- You may want to make fewer high-risk investments since you have less time for your portfolio to balance.
- You likely have a better understanding of your personal risk tolerance and your overall financial portfolio.
- Also, you may have better starting investment amounts since you have had more time to accumulate wealth throughout your lifetime.
- You may want to consider the benefits of short-term investments.
By working with CrossleyShear Wealth Management, you can get the help you need to improve your investment strategy and create a plan designed to help you maximize your earnings. CrossleyShear Wealth Management can help you develop the right financial plan regardless of when you begin. Reach out today to discuss your financial planning options and learn more about investment strategies that will fit your needs, regardless of your age.
