A frought question…
We say “Time in the market beats timing the market.” Is there ever a time when dividend investing is not “worth it”?
We are all familiar with graphs that show how investing money can grow over time. But when happens if we start near the end of the chart? What would you say to an elderly person who might want to start dividend investing?
Like all good questions, my best reply would be “it depends”.
Dividend reinvestment functions at its best over time. If time is assumed to be short, is there something to gain? And at what age do we say that time is too short?
While everyone has a limited life span, each person’s life span is unpredictable and unknown. So while each of us may have some “definite” views of how old is old, those are just personal opinions, and not particularly relevant to anyone else.
A quick peek at the list of verified oldest people show many who lived, or are still living, well in excess of 100 years old. The oldest person on that list, Jeanne Calment, lived to 122 years old.
In addition, as our assets do not vaporize upon our demise, as we have the ability to bequeath our financial assets to our beneficiaries when our time is up, so to start investing at advanced ages need not be a futile endeavor.
Lifespan
One of the expectations of dividend investing is to be able to enjoy the benefits of the dividends generated. As such, one could consider what expectations the investor has regarding dividends if investing starts at an advanced age. Certainly this is not to diminish any motivation to invest or appreciate any dividends received.
Therefore, while I might consider a certain age to be old, that opinion probably does not apply to anyone else. If, say, a 90 year old person starts investing, it is not my place to judge or scold. Investing is as personal as any other activity. A 90 year old could live theoretically another 32 years to match Jeanne Calment’s age. 32 years is more than enough to benefit substantially from dividend reinvestment.
What are your thoughts? Let me know here.
“Skeletons walking in the hills” is one of several skeleton drawing made by Ikkyū (一休宗純, Ikkyū Sōjun, 1394-1481) was an eccentric, iconoclastic Japanese Zen Buddhist monk and poet. Courtesy Wikimedia Commons.
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