Cost of Delay in Investments

Cost of Delay in Investments zoom-icon

Mutual Funds Sahi Hai?

Suppose you have a malfunctioning air conditioner (AC) during the winter season. You assume that you won't require it at the moment and put off repairing it. But when summer arrives and the heat becomes unbearable, you must repair the AC. Unfortunately, it is the peak demand time, and finding a repair technician becomes challenging. When a technician finally arrives, they inform you that the repair will take an additional week and will be more expensive due to the increased cost of obtaining the necessary motherboard, which is in high demand.

Delaying your AC repair to later months, just when you need it, ended up becoming a costly affair. 

The cost of delay in investments works in a similar manner. By delaying your investment, you may effectively delay your ability to generate income from your money. It may hamper your ability to meet investment goals, such as starting a business or saving for retirement, which may result in missed opportunities and lose potential profits.

The Cost of Delayed Investments in Real Terms 

Whether or not you have a financial goal, you should start working towards your savings and investments immediately. The cost of delay can be substantial. If you know the power of compounding, you know that time can add a lot of money to your investments. Let’s understand this better with an example. 

You know retirement planning is crucial, and you should start saving for it as soon as possible. You are 27 years old and think you have enough time to work on your retirement. You promise to start at 30 with a monthly SIP of Rs 5,000. However, when you turn 30, new responsibilities may crop up. Let us assume, you get married. So, you put off retirement planning for a few years. At 35, you decide enough is enough and start investing Rs 7,500 a month in a mutual fund. This is how your corpus would look in each circumstance: 


Start at 25

Start at 30

Start at 35

Time to retirement (assuming you retire at 60) (a)




Amount invested per month (b)

Rs 5,000

Rs 5,000

Rs 7,500

Assumed Return on Investment*




Invested amount

Rs 21,00,000

Rs 18,00,000

Rs 22,50,000

Total corpus accumulated with returns (subject to risks)

Rs 1,89,83,190


Rs 1,13,96,627

Rs 99,51,251


Cost of delayed investment


Rs 41,78,748

Rs 90,31,940


* The above calculations are for illustration purposes only. Invested amount was calculate using the formula: a*b*12. The total corpus accumulated with returns was calculated using the Cost of delay calculator. The cost of delaying investment was determined by subtracting the total corpus accumulated at a specific age from the total corpus built since the age of 25.

As you can see, the cost of delayed investment is huge, even if you increase your monthly SIP. To match the end amount with a SIP at 25 with Rs 5,000, you would have to invest Rs 14,300 every month if you start at 35. Isn’t this a huge cost for delaying your investment by a few years? 

Using a cost of delay calculator, you can estimate how much money you stand to lose if you delay your investments. 

Why Start Investing Early?

1.  Time Is On Your Side
Investing early gives you the advantage of time. The longer your investments are held, the more time they have to grow and accumulate returns. This means that even small investments made early on have the potential to result in significant wealth over time.

2.  Compound Interest
Investing early allows you to take advantage of the power of compounding. Compound interest is when your investment earnings are reinvested and generate returns themselves. Over time, the power of compounding can lead to exponential growth in your investments. 

3.  More Investment Options
Investing early gives you more time to explore different investment options and strategies. If one option doesn’t work, you can always change your strategy. 

4.  Accomplish Long-Term Goals
Investing early helps you work towards long-term goals such as retirement, buying a house, or funding a child's education. The earlier you start investing, the more time you have to build up the resources to achieve these goals.

The cost of delayed investments can be substantial and even hinder your long-term financial goals. Whether you invest through a SIP or a lump sum amount in mutual funds, starting as soon as possible can help you meet your goals. You can consult a mutual fund expert to find out if the product/scheme is suitable for you.


The information disseminated on AMFI website about various categories of mutual fund schemes is for informational purposes for creating awareness about mutual funds as a financial product category and not for sales promotion nor solicitation of business.

The content herein has been prepared by AMFI on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, AMFI cannot guarantee the accuracy of such information, assure its completeness, or warrant that such information will not be changed.

The content herein does not take into account individual investor’s objectives, risk appetite or financial needs or circumstances or the suitability of the mutual fund products described herein. Hence, investors are advised to consult their professional investment adviser/ consultant/ tax advisor for investment advice in this regard. 

A mutual fund scheme is NOT a DEPOSIT product and is not an obligation of, or guaranteed, or insured by the mutual fund or its AMC. Due to the nature of the underlying investments, the returns or the potential returns of a mutual fund product cannot be guaranteed. Historical performance, when presented, is purely for reference purposes and is not a guarantee of future results.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.


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