While some people might consider age to be a significant factor in when or how they should invest, there are no limits to when you can start. Some people think investing is a young person’s game. Others decide to put it off until they’ve reached a certain age.
The reality is that your investment strategy should depend on your financial goals as much as your age. Of course, personal circumstances do vary, and this should inform your strategy, too. And while, in general, the amount of financial risk you take decreases as your age increases, everybody is different.
First, consider what you want to do with your money. You might want to save for a comfortable retirement abroad, or you may want to look at buying property nearby. Whatever your goals, there are several different investment options to consider, and some of them may well be suitable.
At What Age Should You Start Investing?
There is no fixed age at which you should start or stop investing. Except for custodial accounts, junior ISA products, and things like premium bonds, you can begin investing at 18. Beyond that, there is no real limit on when or where you can invest.
While people generally assume more risk in their investments earlier on in life – in their 20s and 30s, for instance – this does not have to be the case. In later life, you may feel that safety and preservation of capital are more important than exciting returns, but if you’re comfortable with higher-risk investments, they may suit your plans.
Remember, there is no one-size-fits-all strategy when it comes to investing. Different people are comfortable with different levels of risk. While some people are happy to trust funds with their money, others may want more direct control.
Ask yourself these questions before you make any decisions:
- What do you want to do with your money?
- How involved do you want to be when it comes to your investments?
- What’s your tolerance for risk?
While it’s important to consider your goals, you should also remember that it’s important to enjoy yourself in your retirement. You’ve worked all through your life to earn the money you have.
The bottom line is simple: it’s never too late to start investing, and it can often be a good idea if you have more time on your hands or something like a pension to support you day-to-day. You just have to consider where and how it’s most important to invest.
How Do I Start Investing in Later Life?
Firstly, you need to put together a strategy that’s going to work for you. If you don’t know too much about investing, speak to an advisor or spend some time using services such as Investopedia to do an appropriate amount of research.
For some people, higher-risk options such as venture capital, hedge funds or foreign exchange may be suitable. These can pay significant returns in a reasonably short space of time. However, you need to consider how willing you are to risk a chunk of your capital – and how much of it you’re willing to risk.
You can also scope out other funds which have varying levels of risk. Investment platforms such as Hargreaves Lansdown, AJ Bell, and Vanguard often have a search function for particular funds so you can find one that suits you.
At the same time, you can also consider other options. If you’re comfortable with technology, investment apps such as Wealthify, Nutmeg, Moneyfarm, and Wealthsimple provide you with the ability to manage your money from the palm of your hand.
Beyond that, there are plenty of other options. You might consider investing in property – either directly or through a property investment company – commodities, or even startups. It all depends on what you’re comfortable with.
Is Now A Good Time to Start Investing?
In short: yes. While not everybody invests throughout their life, there are so many products out there with all manner of risk profiles and potential return levels. There is bound to be something that suits you, even if it’s just a matter of putting your money in a savings account.
Markets do fluctuate, but the general trend is that time in the market improves the value of your investments as markets develop. However, no matter what you do, remember that past performance is not a guarantee of future returns. There is always a risk you could get back less than you put in.
No matter what you decide, you will have to consider your circumstances and your goals, of course – including your age – but there is almost definitely an investment strategy that works for you. Even if you feel very averse to risk, savings accounts and other safe, low-return investments can still pay dividends.
You shouldn’t view the decision to invest as an attempt to time the market, but rather as a move to take greater control of your finances and your long-term future as a result. The right investment moves could improve your quality of life dramatically, whether that’s by supplementing your income for the next few years, or enabling you to make that move abroad.
And while it might seem like a daunting world, especially for first-time investors, there is an abundance of information out there to help you make the right decisions and get started.