Dollar-Cost Averaging Calculator
Dollar-cost averaging means investing a fixed amount on a set schedule — through ups and downs — instead of trying to time the market. Enter your monthly amount and horizon to project where steady investing could take you.
▸ Show year-by-year breakdown
| Period | Invested | Growth | Value |
|---|
Estimates are for illustration and education only — not financial advice. Returns are assumed constant and are not guaranteed; real markets fluctuate.
How dollar-cost averaging works
Dollar-cost averaging (DCA) is the habit of investing the same amount at regular intervals, regardless of price. When markets dip, your fixed amount buys more shares; when they rise, it buys fewer. Over time this smooths out your average purchase price and removes the pressure of trying to pick the perfect moment.
It's about behaviour, not magic
DCA doesn't guarantee higher returns than investing a lump sum — historically a lump sum often wins because it's in the market longer. What DCA does is make investing automatic and emotionally survivable, so you keep going through downturns instead of freezing or selling.
Consistency compounds
The projection here assumes a steady return, but the real engine is simply showing up every month for years. Small, boring, repeated contributions are how most long-term wealth is actually built.
Curious how fees change the picture? Try the ETF return calculator, or model a one-time investment with the compound interest calculator.
How dollar-cost averaging compounds
Each contribution becomes its own tiny investment that compounds from the day it lands. Add them all up and you get the future value of a regular savings stream.
Dollar-cost averaging vs lump sum
Both are valid. The right one depends on whether you have money to invest now, and on how you actually behave when markets wobble.
Dollar-cost averaging steady
- Ideal when you invest from each paycheck
- Removes the pressure of timing the market
- Emotionally easier to keep going through downturns
- Automatically buys more shares when prices are low
Lump sum all-in
- Best when you already hold the cash today
- Historically ahead more often — more time in the market
- Fewer decisions and no leftover cash sitting idle
- Higher short-term regret risk if markets drop right after
The honest trade-off. Studies repeatedly find that investing a lump sum immediately beats spreading it out roughly two-thirds of the time, simply because markets rise more often than they fall. But those studies assume you actually invest — and stay invested. For most people building wealth from income, DCA isn't a compromise; it's the only realistic option, and a very good one.
What $500 a month can become
The same $500 monthly contribution at a 7% average return, by how long you keep it up. Notice how the growth portion overtakes what you put in.
| Years investing | You contribute | Est. growth | Est. balance |
|---|---|---|---|
| 10 years | $60,000 | ~$26,000 | ~$86,000 |
| 20 years | $120,000 | ~$140,000 | ~$260,000 |
| 30 years | $180,000 | ~$430,000 | ~$610,000 |
| 40 years | $240,000 | ~$1,070,000 | ~$1,310,000 |
Illustrative figures at a constant 7% annual return, compounded monthly and rounded. Real returns vary year to year; the point is the shape — the longer you stay invested, the more the balance is growth rather than contributions.