The Cost of Waiting Index
Everyone knows starting early matters. We wanted to know by how much, in dollars — so we measured it. Using real S&P 500 monthly closes from 1995 to 2025, we invested $500 a month for 20 years, then ran the same plan with a 5-year and a 10-year delayed start, ending on the same day. Here is what the delay cost, in every window the data supports.
Run your own window
Balance over the 20 years
The full results: every 20-year window
Twelve start years have a complete 20-year window inside the 1995–2025 data. In every single one, starting on time won — and the 10-year wait cost six figures in eleven of the twelve.
| Start | Window | On time put in $120,000 | Waited 5 yrs put in $90,000 | Cost of waiting 5 yrs | Waited 10 yrs put in $60,000 | Cost of waiting 10 yrs |
|---|---|---|---|---|---|---|
| 1995 | Jan 1995 – Dec 2014 | $226,690 | $150,667 | −$76,023 | $95,067 | −$131,623 |
| 1996 | Jan 1996 – Dec 2015 | $208,445 | $146,900 | −$61,546 | $90,198 | −$118,247 |
| 1997 | Jan 1997 – Dec 2016 | $214,745 | $155,909 | −$58,836 | $94,986 | −$119,759 |
| 1998 | Jan 1998 – Dec 2017 | $244,522 | $176,285 | −$68,237 | $109,091 | −$135,430 |
| 1999 | Jan 1999 – Dec 2018 | $220,881 | $155,132 | −$65,749 | $95,090 | −$125,791 |
| 2000 | Jan 2000 – Dec 2019 | $276,686 | $189,440 | −$87,246 | $108,393 | −$168,293 |
| 2001 | Jan 2001 – Dec 2020 | $312,844 | $208,645 | −$104,198 | $113,095 | −$199,749 |
| 2002 | Jan 2002 – Dec 2021 | $379,449 | $249,752 | −$129,697 | $127,846 | −$251,603 |
| 2003 | Jan 2003 – Dec 2022 | $287,766 | $191,271 | −$96,495 | $92,036 | −$195,730 |
| 2004 | Jan 2004 – Dec 2023 | $334,339 | $220,095 | −$114,243 | $103,588 | −$230,750 |
| 2005 | Jan 2005 – Dec 2024 | $387,617 | $240,071 | −$147,546 | $116,042 | −$271,576 |
| 2006 | Jan 2006 – Dec 2025 | $423,692 | $249,550 | −$174,142 | $121,604 | −$302,088 |
Why the cost is so much bigger than the skipped contributions
Waiting 5 years means skipping $30,000 of contributions — but the median cost was $91,871, three times that. The reason is which dollars get skipped. The first contributions a plan ever makes are the ones that compound the longest; in the median window, those first five years of $500 payments ended up worth $3.06 for every $1 contributed. A late start doesn't just remove the money — it removes the money's best twenty years. Put differently: the median 5-year waiter gave up $61,871 of pure growth on top of the $30,000 they never put in, and the median 10-year waiter gave up $122,012 of growth.
The most dramatic window: 2006
An investor who started in January 2006 and kept going through the financial crisis ended with $423,692. One who waited out the crash and started in 2016 "when it felt safe" ended with $121,604 — a $302,088 gap. Waiting felt prudent; the early investor's crisis-era purchases, made at depressed prices, turned out to be the most valuable of the whole plan. That is the pattern the averages hide: the years people most want to skip are often the years that pay the most.
Methodology
- Data: S&P 500 monthly closing prices, January 1995 – December 2025 (372 months), via Yahoo Finance. This is the price index — it excludes dividends. (The same dataset powers our homepage market-timing game.)
- Investing rule: a fixed $500 contribution buys fractional shares of the index at each month-end close. No fees, no taxes, no timing decisions.
- Cohorts: for each start year, "on time" buys in months 1–240; "waited 5 years" buys in months 61–240; "waited 10 years" buys in months 121–240. All three are valued at the same final month-end close. The dataset ends in December 2025, so 2006 is the last start year with a complete 20-year window — twelve cohorts in total.
- Cost of waiting = on-time final balance minus the delayed plan's final balance. Because the delayed plans contribute less, part of the gap is simply money never invested; the rest is growth forgone, and the text above separates the two.
Honest caveats
- Past performance is not a prediction. These are twelve specific historical windows. A future 20-year period could reward patience differently — though notably, waiting lost in all twelve windows studied, including ones containing the dot-com crash and the 2008 crisis.
- No dividends. Using the price index understates every outcome — and understates the on-time outcome most, since early money collects the most dividends. With dividends reinvested, the true cost of waiting would be larger than shown here.
- Overlapping windows. The twelve cohorts share most of their months, so they are not twelve independent experiments. Treat the medians as a summary of one long stretch of US market history, not a statistical guarantee.
- Nominal dollars, no inflation adjustment, no fees or taxes. Real-world results would be lower for all three plans; the comparison between them is what this study is about.
- One index, one country. Results describe the US large-cap market. Other markets and asset mixes would differ.
Data: S&P 500 monthly closes, Yahoo Finance (verified against documented historical month-end closes). Study computed October 2026; figures are reproducible from the interactive tool above, which uses the identical dataset and method.
Questions
What is the Cost of Waiting Index?
The Cost of Waiting Index is a study of real S&P 500 history (monthly closes, January 1995 – December 2025). For every start year with a complete 20-year window, it invests $500 a month for 20 years and compares starting immediately against waiting 5 years and waiting 10 years, with all three ending on the same date. The gap between the outcomes is the measured cost of waiting.
How much does waiting 5 years to start investing cost?
Across the twelve 20-year windows studied, the median cost of waiting 5 years was $91,871 on a $500-a-month plan — roughly a third of the on-time investor's final balance. Waiting 10 years cost a median of $182,012, or about 62% of the on-time outcome.
Why is the cost of waiting so much bigger than the money you didn't invest?
Because the earliest contributions compound the longest. In the median window, the first five years of $500 payments ($30,000 contributed) were worth $91,871 by the end — about $3.06 for every $1. Skipping those years doesn't just remove the contributions; it removes two decades of growth on them.
Does the study include dividends?
No. It uses the S&P 500 price index only, so dividends are excluded. That understates every outcome — and it understates the on-time outcome the most, because early money collects the most dividends. With dividends reinvested, the real cost of waiting would be larger than the figures shown.
Is the Cost of Waiting Index a prediction?
No. It is a measurement of twelve specific historical windows in one index. Past performance does not predict future returns, and a future 20-year window could look very different — but in every one of the twelve windows studied, starting earlier beat waiting, by a wide margin.
Can I run the numbers for a different amount or start year?
Yes — the interactive tool on this page uses the same dataset and method. Pick any start year from 1995 to 2006 and any monthly amount from $100 to $2,000. Because the model buys fractional shares of the index, the cost of waiting scales in direct proportion to the monthly amount.