All of us want to have fun when we get a job and money starts flowing. Saving and investing often don’t come to our mind. As time passes, we get worried about the future and look for avenues for investment. Sounds familiar?

The lost time cannot come back but you need to understand what are the side effects of starting late on your investment journey. Let us discuss the three most important side-effects of starting your investment journey late in your career.

Time Difference Can Create A Huge Deviation In Outcome

The rule of compounding is one of the main strengths of disciplined investing. If you start your investing at the age of 25 versus someone starting at the age of 35, there will be a huge difference in the corpus at retirement.

Let’s take an example, if you invest Rs 10,000 per month for 25 years earning 8 per cent annually, your corpus size after 25 years will be around Rs 96 lakh. However, if someone starts investing the same amount 10 years earlier (and hence can invest for 35 years), the final value, at the end of 35 years, will be a whopping Rs 2.31 crore!

Imagine the price you pay for starting the investment process late in your career.

May Not Have Enough Time To Build A Respectable Retirement Corpus

If you start late, you may not have a working life long enough to build a sufficiently large corpus for your retirement. As shown in the example, starting late hurts you immeasurably. At the same time, when you start late, your expenses limit your investment. Starting early is better because you do not have any liability at the initial stage of your career. As you grow older, your liability increases. Kids’ education, EMIs, lifestyle expanse, and medical expenses all go up.

Risk Appetite Goes Down As You Age

Risk means the possibility of losses. As you grow older, your risk appetite reduces. Since you are besotted with many responsibilities, you tend to invest in low-risk assets which deliver low returns as a result. Low returns do not create big assets.

Many investments, especially equities, tend to give high returns in the long run. When you start late, you may not have the luxury of the long run. Moreover, any large volatility can scare you because of which you may take bad decision in investment.

When you start early, you can afford to make mistakes in your investment. But you also learn the pitfalls of investing. This learning helps you take better decisions as you keep investing. So, if you want a comfortable retirement life, start investing early in your career. Your gadgets, your binge party, the new movie, and the new Apple iPhone can wait, Investing cannot.

The author is an Independent financial journalist