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Are You Ever Too Old To Start Investing?

FYI: Lindsay’s eyes narrowed. I was delivering a presentation on investing, and she had a burning question. It was something many people think…but few have the courage to ask.

“I can see the benefit of compound interest,” she said. “I can also see why investing in a portfolio of index funds makes so much sense. But is it too late for me to start investing? I’m already fifty-eight.”

I’ve met plenty of people like Lindsay. In fact, my parents were a lot like her. They worked hard all their lives. They raised their children. But after the cost of living and their regular mortgage payments, they didn’t have money to invest.

By the time they hit their mid-50s, however, they lived in an empty nest.

That was when they asked if they were too late to start investing. Like Lindsay, they worried what would happen if the markets fell. After all, they wanted to retire within ten years, and they didn’t want to lose their hard-earned money.

You might relate. After all, you probably remember the market crash of 2000-2002. U.S. stocks dropped about 40 percent. Stocks crashed again in 2008: U.S. stocks cratered 37 percent and global stocks fell even further. But I’m going to make a bold prediction. If you don’t have any investments today, and if you start to invest regular monthly sums, you will make a profit over the next 10 years. No, I don’t have a working crystal ball. But history paints a profitable picture, even though the canvas has lumps.

There are just two rules: The portfolio should include broad diversification of stocks and bonds. I suggest about 60 percent in stocks and 40 percent in bonds. It should also charge low fees. A low-cost balanced index fund should do the trick.
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