The Cost of Waiting 20 Years to Start Investing

When people think about investing, they often focus on finding the "right" investment. The best stock. The best fund. The perfect time to invest.

But for most Canadians, long-term financial success doesn't come from making perfect investment decisions. It comes from starting early and giving their money time to grow.

The Advantage Most People Overlook

Many people delay investing because they feel they don't have enough money to make a difference. They tell themselves they'll start once they earn more, pay off debt, or feel more financially secure.

Unfortunately, waiting can be costly.

According to Fidelity Investments Canada, someone who starts investing earlier can end up with more money than someone who contributes significantly more later in life because their investments have had more time to benefit from compound growth.

What Is Compound Growth?

Compound growth is often called one of the most powerful forces in investing.

Simply put, your money earns returns, and then those returns begin earning returns of their own. Over time, the growth can accelerate dramatically. Canada Life compares it to planting a tree: what starts as a small seed can eventually grow into an entire forest. 

The longer your money remains invested, the more opportunity it has to compound.

A Simple Example

Imagine two investors:

Investor A

• Starts investing at age 25
• Contributes $500 per month
• Earns an average annual return of 6%

Investor B

• Waits until age 45
• Contributes $1,000 per month
• Earns the same average annual return

Despite investing twice as much each month, Investor B could still end up with less money at retirement because Investor A's investments had an extra 20 years to grow. Canada Life uses a similar example showing that starting early can lead to substantially larger savings, even when the total contributions are similar. 

The lesson isn't that you need a lot of money.

The lesson is that time is one of the most valuable assets an investor has.

Why Waiting Feels Easier Than Starting

Investing can feel intimidating.

Markets move up and down. Headlines constantly predict the next crisis. It's easy to convince yourself that you'll begin when conditions feel more certain.

The problem is that there is always a reason to wait.

For decades, investors have faced recessions, market crashes, geopolitical events, rising interest rates, and economic uncertainty. Yet long-term investors who remained disciplined have historically been rewarded for staying invested and focused on their long-term goals. 

Small Amounts Can Make a Big Difference

One of the biggest misconceptions about investing is that you need a large sum of money to get started.

In reality, consistency often matters more than the size of any single contribution.

Regular monthly contributions, even modest ones, can build momentum over time. As your investments grow and compound, the growth may eventually contribute more to your portfolio than your original deposits. 

That's why many successful investors focus less on timing the market and more on maintaining a consistent investment habit.

What This Means for Canadians Today

Whether you're saving through a TFSA, RRSP, RESP, or non-registered account, the principle remains the same:

Start as early as you reasonably can. You don't need to invest perfectly. You don't need to predict the market. And you don't need a large portfolio to begin.

What matters most is putting your money to work and allowing time to do what it does best: compound.

The Bottom Line

If there is one lesson investors can learn from decades of market history, it's this:

Starting early is often more important than starting big.

The best time to begin investing may have been years ago. The second-best time is today.

Every year you give your investments to grow is another year compound growth can work in your favour. And over the course of a lifetime, that can make an extraordinary difference.

Sources: https://www.fidelity.ca/en/investor-education/invest-early/

https://www.canadalife.com/how-to-take-advantage-of-compound-growth