Is it Too Late to Start Investing?

Here’s an interesting question I was asked recently. “Is it too late for me to start investing?” The query came from a friend of mine who’s in his mid-40s and wants to purchase his first investment property, but obviously has some concerns about getting what he feels is a later start.

To be fair, it’s a valid concern. The earlier you start investing, the better off you’ll be. The sooner you begin, the more time you have with your investments, resulting in more opportunity to expand your wealth. Younger investors (i.e., those in their 20s) also typically have less financial responsibilities, so they’re able to divert more funds into their investments, which can also result in faster wealth-building. And, finally, we all know that time is your friend when it comes to real estate. Loan amortization and real estate appreciation both require time, not to mention the knowledge and wisdom developed over the years that allows you to make smarter investment decisions.

Now, I’m not telling you all this to discourage you. I’m simply laying some out the facts. Notice I said “some,” because here’s another fun fact for you: in spite of all the arguments that can be made on why investing at a younger age is a good thing, it’s NEVER too late to start. In fact, there are actually quite a few benefits that can be found by starting your investment journey later in life.

Before we get into those, however, I want to point out a couple of things that aren’t dependent on time or years in the game or anything like that:

• Cash flow. This is one of the immediate benefits that comes with investing in rental property, regardless of your age. It’s advantageous whether you’re 25 or 60. Cashflow is the income you receive off your property each month, and it’s money in your pocket that you can do whatever you want with.
• Tax advantages. Another benefit is the tax breaks you’ll find as a real estate investor. As an investor, you can take advantage of a number of unique tax benefits that can save you a substantial amount of money. Again, you get these breaks regardless of age, so it’s an immediate gain for you.

It’s also good to remember that even just a few years of playing the investment game can lead to significant growth in your income and assets. If you make the right decisions, you have the potential to realize amazing growth, even early on. That’s one of the best things about real estate - there’s no rule book saying you have to do things a certain way. You are in charge of your own destiny.

One last thing I want to discuss are some of the reasons why getting a later start can actually be a good thing. Bear in mind that these are generalizations, and they’re not going to be true for everyone. However, in my experience, this is often what I see:

• More financially secure - Older people are generally more financially secure than their younger counterparts. They’ve paid down their debt, they have a larger income, and they have more money to work with overall.
• Less responsibility - Remember when I said younger people usually have less responsibility? They do, but then again, so do many older people. I’m talking about the empty nesters who have raised their kids and no longer are under the financial strain that accompanies children. Again, this results in more money to work with, but also more time to spend focusing on investing.
• More wisdom - Impulsiveness is the downfall of many investors, and unfortunately, I see a lot of younger investors with this characteristic. It does tend to wear off as we age, though, and especially as we learn and grow as investors. Patience and wisdom are two of the most important qualities an investor can possess, and these generally come about with age.

Here’s the deal. It’s never too late to start investing in real estate. There are incredible opportunities out there for both younger and older investors. And remember - you’re never going to be as young as you are today, so why wait any longer?