Explainer
Opportunity Cost of Waiting to Invest (Explained Simply)
Opportunity cost is what you give up by choosing one option over another. Here, it’s the growth you might miss by starting later with the same assumptions.
Published: December 22, 2025 · Updated: December 22, 2025 · By FinToolSuite Editorial
Model it in the calculator
Compare “start now” vs “start later” in a few clicks.
Quick answer
Opportunity cost is the value of the next best alternative you forego. When waiting to invest, it’s the growth you might miss under the same assumptions.
See examplesWhat opportunity cost means
Opportunity cost is what you give up by choosing one path over another. It can be money, time, or flexibility. In compounding terms, it’s the potential growth forgone by starting later with the same inputs.
More on the math that makes timing matter: what is compound interest?.
Disclaimer
Educational purposes only; not financial advice. Examples are illustrative; real returns vary and investments can go down as well as up. Fees, taxes, inflation, and provider rules vary by country and account type.
Real-life examples
- Waiting 12 months to start saving £100/month: the missed year reduces how long those deposits can grow. Model it in the Cost of Delay Calculator.
- Holding a lump sum in cash (£5,000) vs starting now at an illustrative rate: the delay shortens the compounding window. Test it in the calculator.
- Delaying retirement contributions by a few years: fewer years for growth can widen the gap later. Compare start-now vs start-later in the calculator.
- Pausing contributions during a busy period: stopping for a year may lower the projected balance. Run a “pause” scenario side-by-side in the calculator.
When opportunity cost is biggest
- Longer delays (more time out of the market/account).
- Longer horizons afterward (more compounding time lost).
- Higher return assumptions (bigger sensitivity to waiting).
- Larger amounts (lump sum or regular deposits).
- Fees, taxes, and inflation can change net outcomes.
Opportunity cost vs uncertainty
The calculator uses assumptions, not guarantees. Returns can be higher or lower (or negative). Run low/base/high assumptions to see the range of possible gaps.
How the Cost of Delay Calculator helps
Compare “start now” vs “start later” with the same inputs to see an illustrative opportunity cost. Save scenarios and view them side-by-side.
Open the tool: Cost of Delay Calculator · Ready-made scenarios: cost of delay examples.
FAQ
What is opportunity cost?
It’s the value of the next best alternative you give up when choosing one option over another.
Is opportunity cost always financial?
No. It can include time, flexibility, or other benefits—not just money.
Does waiting always have a cost?
There’s often a trade-off. Waiting can reduce compounding time, but outcomes depend on assumptions and circumstances.
How do I estimate opportunity cost of waiting to invest?
Run “start now” vs “start later” with the same inputs in the Cost of Delay Calculator.
What return should I assume?
Use illustrative ranges and compare. See more in the Cost of Delay guide.
Does inflation affect opportunity cost?
Yes. Higher inflation can reduce real purchasing power, so net outcomes may differ from nominal projections.
Do fees and taxes matter?
They can lower net results. Adjust assumptions if you want to see different net projections.
Is the calculator result guaranteed?
No. It’s an estimate based on your inputs; real outcomes vary.
What if I’m saving monthly, not investing a lump sum?
You can still compare timing by modeling start-now vs start-later with the same monthly amount in the calculator.
How do I compare two start dates fairly?
Keep the amount, rate, frequency, and horizon the same. Change only the start date and compare side-by-side.
Next steps
Save three scenarios: start now, start in 6 months, and start in 12 months. Compare the estimated opportunity cost side-by-side.