Home Investing How I Started Investing in My Late 30s

How I Started Investing in My Late 30s


My journey to financial freedom was a very unlikely one, considering my childhood upbringing. I’m the daughter of teen parents and a first-generation college graduate. I achieved a bachelor’s, master’s, and doctorate degree.

But guess what? I never learned about personal investing until my late 30s, when I taught myself about the stock market.

I wasn’t introduced to the concept of financial independence until I was 37 years old.

After years of living what I thought was the American dream (family, degrees, job, house, car, etc.), and after my divorce in 2017, I found the strength to pursue financial freedom. I reconfigured my budget and doubled down on saving and investing. I had no excuses. I took complete control of my finances.

Read More: Next Moves for This Mom Who Reached $750K Net Worth in 4 Years

How I Reached Financial Freedom

Financial independence, retire early (FIRE) is the concept of changing your spending and investing habits in life to focus on investing so you can become financially free.

When you can pay your living expenses from gains and passive income, you are financially free.

I saved and invested in the stock market until my nest egg reached 25 times my necessary annual expenses. I now can withdraw 4% annually to live off and spend my days as I wish. To determine how much I needed to invest each month, I referred to my savings rate.

Savings rate is the percent of your income that you save and invest. The more you save and invest, the faster you’ll build your nest egg due to the compounding effect of investing. The time to reach financial independence is heavily dependent on your savings rate. Your savings rate is the percentage of your gross income you save and invest each year.

Depending on your savings rate and how much risk you are willing to take, you will reach your number faster or slower. It’s not hard, it just takes time. How much time? Remember, it depends on how much you invest each year. The important thing is to start today.

If you are spending 100% of your income, you won’t have any money saved for retirement. As soon as you start saving and investing, you can potentially start seeing your money earn its own money, that you can eventually live off in retirement. Let’s say you are starting at zero dollars in investments and will start investing with earnings around 6% a year. You can use the Personal Capital retirement planner to do the math for you to determine when you can retire comfortably.

When I started investing, a savings rate of 15% would have retired me in about 43 years, 35% savings a year would have retired me in about 20 years, and 60% in about 10 years. That’s at a 6% average growth rate. During my accumulation years, the United States was experiencing a bull market with annual returns much higher than 6%, so I retired in much less time than I had estimated.

Now I monitor my investments with Personal Capital’s free and secure online financial tools. With the Dashboard, I can see all of my financial accounts in one place. The planning tools allow me to analyze my investments and find hidden fees, and also prepare for spending in retirement.

Is It Possible for You?

I know this may sound scary if you’ve never invested before. You may be thinking, “I can’t afford to lose any money” or “I don’t know where to start.” With education and positive money affirmations, you can reach your goals! You just have to get started.

Is it even possible to become financially free? Is it possible to have all your expenses covered from capital gains (real estate, business, stock, bond, or equity investments)?

It’s possible if you live on less than you make and invest the rest.

Not everyone is able to do this, but many of us who make average salaries or more can do it.

How You Can Start

You won’t get there overnight. Start by doubling what you currently contribute to your workplace retirement accounts (e.g. 401k or 403b). That’s what I did. Then I found more ways to cut my spending so that I could eventually max out my tax deferred accounts and my Roth IRA.

It’s easy to cut expenses if you start by determining what you value and what you don’t. Do you value expensive bags, shoes, and clothes over saving half your income? How much do you value things that won’t pay you annual dividends?

Think about these things long term.

What are the things you can do to start to reduce your expenses and invest more? What are ways you can create more income so that you can invest more?

Don’t look down upon yourself if you don’t yet feel prepared for retirement. Many people begin investing in their 30s and 40s and retire comfortably. A 2021 Personal Capital survey revealed that 42.4% of first-time investors were between 31 and 45 years old. You can start today. Every dollar has a chance to grow compound interest so never think a small amount doesn’t count but it does. Just start!

Get Started with Personal Capital’s Free Financial Tools

Featured individual is a paid spokesperson and not a client of Personal Capital Advisors Corporation (“PCAC”) and does not make any endorsements or recommendations about securities offerings or investment strategy. The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

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