Part 3/7:
So, what can those who start investing later do to recover lost time? The answer lies in the amount contributed. Let’s re-evaluate our initial scenarios. If the investor who starts at 30 wants to reach £1 million by age 60, they would need to increase their monthly investment to £900. Those who begin at 40 would need to contribute £1,250 monthly to achieve the same goal.
This exemplifies an essential principle: the later you start investing, the more you need to contribute to realize similar returns to an earlier starter. If you invest early, a lower monthly payment can suffice due to a longer compounding period.
Advantages of Starting Late
While early investment provides unique advantages, starting later in life can also bring several benefits.