Harness dollar-cost averaging (DCA). Calculate how investing a set dollar amount every month builds long-term wealth, beats market timing, and accumulates compound returns.
Enter your values, then select Calculate Now
Calculates Future Value with monthly deposits and monthly compounding: r_m = Return / 12, n = Years * 12. FV = Initial * (1 + r_m)^n + Monthly * [((1 + r_m)^n - 1) / r_m]. Total Out-of-Pocket = Initial + (Monthly * n). Total Capital Gain = FV - Total Out-of-Pocket.
Your monthly habit generates more wealth in pure market growth ($151k) than the entire sum of cash you invested ($140k).
Enter the monthly sum you intend to deposit into index funds, ETFs, or stocks.
Input any starting capital you currently have invested.
Choose your holding period in years.
Enter your estimated annual return (typically 7% to 10% for stock index funds).
Review total principal invested, compound interest generated, and growth milestones.
Dollar-cost averaging is the strategy of investing a fixed dollar amount at regular intervals, regardless of share price. You automatically buy more shares when prices are low and fewer shares when prices are high.
While lump-sum investing mathematically outperforms about 66% of the time because markets rise long-term, DCA provides psychological comfort and prevents the fear of investing right before a correction.
Aim for 15% to 20% of your take-home pay, or start with whatever you can afford ($100 to $250/month) and increase it with every raise.
1. Capture employer 401(k) match; 2. Maximize a Roth IRA; 3. Return to max out the 401(k); 4. Invest remaining surplus in a taxable brokerage account.
Market drops are actually beneficial for monthly investors because your fixed monthly deposit buys shares at a discount, boosting long-term returns when markets recover.
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