When it comes to our personal financial situations, unfortunately, things are not always rosy. For every financial independence story, there is a story about starting over. There are a number of reasons why we might experience a great reset in our lives, and few of them are positive. As the Financial Geek, I’m here to provide you with information for both good and bad situations. So how difficult is starting over at 45 with nothing? I can tell you it’s not easy.

The truth is, at 45 you will want to have much of your financial situation under control. With retirement on the horizon, it is important to have a growing nest egg to cover your costs and ensure your quality of life. If you are starting over at 45, it isn’t impossible, but it can be difficult to get your finances to where they need to be in preparation for retirement. 

If you are starting over at 45, there are a few things you should know. I have done some research and compiled some of the most important things to consider if you find yourself in this situation. 

Starting Over at 45 With Nothing

It is such a gloomy statement but you always have to look for the silver lining. Starting over at any age can be difficult. Of course, when it comes to financials, the older you are the less time you have to build your wealth. The benefit of being invested for decades is that time is the great compounder. If you are starting over at 45 with nothing, it doesn’t leave much time for your money to grow. 

Chances are if you are in this scenario, you have just come out of a life-altering event. It could be finding new employment, a divorce, or some other unforeseen circumstance. The good news? You are on the other side of it now and you are ready to reclaim your life. Just because you are starting over, it does not mean there is no chance for success. 

Since this is the Financial Geek, I will be focusing on what your financial situation will be like. Some of these things will certainly apply to other aspects of your life as well. The overall message is going to be about embracing positivity and using this newfound change to better your life. 

Is it Possible to Start Over at 45?

You know what they say: anything is possible. When going through these situations it is so important to have a glass-half-full mentality. Sure, you might be starting over at 45 with nothing, but you still have some of the best years of your life ahead of you. Plus, you already have 45 years of experience to guide you. 

They say that major life events make you wiser. Whatever yours may have been, just know that you gained some wisdom and knowledge. This will be instrumental in setting the course for the rest of your life. In the big picture, 45 is not even considered old these days. The average life expectancy in the US is 79 years old, but remember that is an average.

If you take care of your health and focus on bettering your life with positivity, you can far outlive the average life expectancy. So what about your finances? Even if you work until 65, that is 20 years of compounding to grow your money. There is still plenty of time to improve your finances and work on your nest egg at 45. 

How do I Start All Over Again Financially?

Were you investing before? If you were, then it is not too late to start again. You already have the knowledge and experience, why not put that to work again? Building a diversified portfolio over 20 years is much better than not having one at all. Take baby steps and create a financial plan that works with your new life. 

If you did not invest before, you still have plenty of time to learn. There are many financial assets that allow you to invest passively. This means you do not even really need any knowledge of the stock market or individual companies. It is the easiest way to get started and a very realistic way of growing your wealth over time. 

Learn more about Index Funds here: Do Index Funds Pay Dividends to Shareholders?

Nobody is saying you need to have a million-dollar stock portfolio. Just invest what you can in your current situation. Anything helps! How do you determine how much you can invest? This will be different for everyone depending on your income. My suggestion at 45 years old: invest as much as you can because your time horizon is shorter than someone in their 20s. 

How Can I Build Wealth in My Late 40s?

Again, do what you can to invest as much as you can from the age of 45. The easiest way to do this is to take advantage of tax-free and tax-deferred investment accounts. Retirement options like the ROTH IRA in the US or the TFSA in Canada are great for investing without worrying about being taxed on your capital gains. 

If you feel you do not have the time to research different investments, then consider a robo-advisor or automated investment plan. Most brokerages have these and for a slightly higher fee, fund managers will automatically build your portfolio based on your preferences and financial goals. I recommend checking both of these options out to learn how to start building your wealth after 45.

Older than 45? Check out this related Financial Geek Article: Starting Over at Age 60

The Bottom Line: Starting Over at 45 With Nothing

It is a daunting headline but you need to stay positive. There are plenty of ways to rebuild your wealth in your 40s. The only difference is the urgency and time frame you have before you retire. You do not have the luxury of decades of compounding anymore. That’s okay! Take the time to establish which financial plan works best for you in your current situation. Stay committed to investing and you will find that rebuilding your finances at 45 is entirely possible. 

Thanks for reading today and I hope this helped you out!

Geek, out.