When Should I Start Investing?

By Chris Murray · Published Oct 3, 2026 · 3 min read

The most common answer is "as early as you reasonably can." This article covers why that advice exists, the steps most beginner guides suggest first, and what starting at different times looked like in real S&P 500 results. All examples use an S&P 500 fund bought in January and valued at the end of 2025, with dividends reinvested. It is general information, not personal advice.

What most guides suggest first

• An emergency fund. Savings set aside for unexpected costs, so a car repair or a lost paycheck doesn't force you to sell investments or borrow. The Consumer Financial Protection Bureau has a guide to building one.
• Pay off high-interest debt. Investor.gov, run by the US Securities and Exchange Commission, notes that no investment reliably earns more than high-interest credit card debt costs.
• Use tax-advantaged accounts where available. Retirement and savings accounts with tax benefits, such as a 401(k) or IRA in the US, or a TFSA or RRSP in Canada, let more of the growth stay invested.
• Start with what you have. Many brokerages have no account minimum and sell fractional shares, so even small amounts can be invested. FINRA's tips for new investors cover the basics.

Why starting early matters

Investment growth compounds: gains earn further gains. The longer money stays invested, the more of its final value comes from growth rather than from the money put in.

$10,000 invested in an S&P 500 fund in January 1996 was worth $184,732 at the end of 2025, 30 years later. The same $10,000 invested ten years later, in January 2006, was worth $77,966.

The chart shows what $10,000 put into an S&P 500 fund in January of each year was worth at the end of 2025. Earlier starts had more years to grow. The dips at 2000 and 2008 are starts made just before a crash.

What if you start at a bad time?

Every starting year from 1994 to 2025 ended with a gain. The weakest start was January 2000, just before the dot-com crash, at 8.0% a year. That $10,000 was still worth $74,432 at the end of 2025.

The table shows the average yearly return for starting years five years apart, which makes short and long periods comparable. Starts from 2023 to 2025 show the highest yearly averages, but they cover one to three years, and short periods vary much more than long ones.

$10,000 in an S&P 500 fund (SPY) on the first trading day of January, valued December 31, 2025, dividends reinvested.

Small, regular amounts

Many people invest a fixed amount on a regular schedule, such as every payday or every month, instead of one large sum. This is called dollar-cost averaging (DCA). Because the amount stays the same, it buys more shares when prices are low and fewer when they are high, and it removes the need to pick the right moment.

Most brokerages let you set this up as a recurring investment that runs automatically from your bank account, so it happens without having to remember.

Someone who invested $1,000 every January from 1996 through 2025 put in $30,000 in total. By the end of 2025, it was worth $199,090. The table compares that with starting the same habit ten and twenty years later.

$1,000 invested in an S&P 500 fund (SPY) on the first trading day of each January through 2025, valued December 31, 2025, dividends reinvested.

Starting in 1996 instead of 2006 meant putting in $10,000 more, but ending with $107,845 more. That extra value came from compounding: the earliest contributions had the most years to grow.

Summary

• Most guides suggest an emergency fund and paying off high-interest debt before investing.
• After that, the usual advice is to start early, even with a small amount, and keep adding.
• In S&P 500 history since 1994, the starting year changed the result, but every starting year ended with a gain. Past results do not guarantee future returns.

Wondering about a different start year? Try SPY with any date in the calculator.