DCA Calculator

Investing a fixed amount of money at fixed intervals, regardless of price. Because the amount is fixed rather than the number of units, a low price buys more units and a high price buys fewer, so the average price you pay comes out below the simple average of the prices along the way. Every payroll-deducted retirement contribution is dollar-cost averaging, whether or not anyone calls it that.

Divide the total amount you have invested by the total number of units you own. If you put in $200 a month for three months and bought at $50, $40 and $62.50, you spent $600 and own 4 + 5 + 3.2 = 12.2 units, so your dollar-cost average is $49.18. Note that it is below $50.83, the plain average of the three prices — that difference is the averaging effect, and it appears whenever the price moves at all.

Whatever you can sustain through a bad year without stopping, which is a budgeting question rather than a market one. The calculator is more useful run backwards: put in the figure you are considering, look at the ending value, and adjust until the result is worth the sacrifice. A smaller amount you keep paying for twenty years beats a larger one you abandon in year three, and consistency is the only part of this you control.

Automatic, on a fixed date, into something broad and cheap, and left alone. The interesting finding from running the numbers is how little the choices people agonize over actually matter: frequency changes the ten-year result by a fraction of a percent, and the timing within the month by less. What matters is the amount, the length of time, and not interrupting it.

You cannot use the simple start-to-end CAGR formula, because the money did not all arrive at the start. Each contribution was invested for a different length of time, so the correct figure is the internal rate of return — the single rate that makes all the cash flows balance. The compound interest calculator on this site computes exactly that and reports it as an effective annual rate; the link under the table carries this plan into it.

Barely distinguishable. Switching the default plan from monthly to weekly changes the ten-year result by about $186 on $85,526, and daily would move it less still. More frequent buying does slightly smooth the price you pay, but the effect is swamped by the return assumption and by whether you keep contributing at all. Pick the frequency that matches when you get paid.

Something you would defend out loud. For a broad developed-market equity index, long-run nominal returns have historically been in the high single digits before inflation, which is where the 7% default comes from — it is a convention, not a forecast. The honest use of this field is to run it twice: once at the figure you hope for and once several points lower, and see how much of your plan depended on the optimistic guess.

Not to the money. Halve it and you buy twice as many units at half the price, and the value is identical to the cent — there is a test asserting exactly that. It exists so the average cost per unit and the unit count are meaningful figures rather than abstractions, since the average price is what the phrase dollar-cost averaging is actually referring to.

Money already invested on day one, before the recurring contributions begin. It compounds for the full period rather than being fed in gradually. Leave it at zero if you are starting from nothing; set it if you are adding a monthly plan on top of an existing holding.

Yes, with the caveat that it projects forward from an assumption rather than replaying what those funds actually did. Enter the index level or the ETF share price as the starting unit price and the long-run return you want to assume. If what you want is the historical record — what monthly investing in VOO since 2015 would really have produced — that is a backtest against real price data, which this calculator deliberately does not do.

Yes, and fractional units make it a better fit there than for individual shares — fund purchases are not rounded to whole units, which is what the calculator assumes. For an individual stock bought in whole shares the results will be slightly optimistic, because a real broker leaves a small cash remainder each time that this model puts to work immediately.

If you hold the money today and markets rise more often than they fall, then usually yes — and the reason is unglamorous: money invested earlier is invested longer. The size of the edge depends almost entirely on how long you would have taken to deploy and what the cash earns meanwhile. Over a twelve-month window at current cash rates it is worth a couple of percent, not a fortune. Spreading it out is not irrational; you are buying a smaller worst case, and paying a known price for it.

Vanguard's study Cost averaging: invest now or temporarily hold your cash?, which compared immediate investment against twelve-month averaging across historical US, UK and Australian data and found immediate investment ahead in roughly two-thirds of periods. It is quoted constantly and rarely explained. The mechanism is the one modeled here: markets rose in most periods, so the money held back missed the rise while earning a cash return instead.

Because a single constant expected return contains no falling market for averaging to exploit. This is worth being blunt about: any calculator that compares DCA against lump sum from one return input has already decided the answer, and several of the popular ones present that as a result. The two things that make it a real question are the return on the cash you are holding — set it equal to the expected return and the gap vanishes — and the break-even price below, which tells you how far the market would have to fall for the other answer to be right.

It is the single most important input in the lower half of the page and the one no competing calculator offers. Money you have not deployed is not sitting in a drawer; it is earning something. At a 0% cash rate the default plan's gap is $32,503. At 4% it falls to $17,037. At 7%, matching the expected return, it is exactly zero. The decision is essentially a bet on the gap between the two rates.

The average purchase price at which spreading the money out would have drawn exactly level with investing it today. It is solved in closed form rather than by inventing a crash, so it does not depend on any scenario. Compare it with the average price your plan actually pays: the gap between them is how far the market would have to fall while you were still buying. An earlier version of this page instead reported a break-even crash depth, and that was removed — bending the price path into a V does not merely lower prices, it also defers the growth to the second half, and that artifact drove almost the entire answer.

No, and this is the most common way the comparison is misread. It assumes you are holding the whole amount today and choosing how to release it. If the money arrives with your salary there is no lump sum to invest — investing each paycheck as it lands is simply investing at the first opportunity, which is the same principle that makes lump sum win. Read the projection at the top; the comparison below is context, not a verdict on what you are doing.

The math does not care what the asset is — set the starting unit price to the current Bitcoin price and enter an expected annual return. The difficulty is not the calculator, it is the input: any single expected return for an asset that has repeatedly halved and repeatedly tripled is a much weaker claim than the same figure for a broad equity index. Volatility is both the reason averaging into crypto appeals and the reason a single-rate projection tells you least there. If you want the historical record of Bitcoin DCA, you want a backtest against real price history, which this is not.

No. This site holds no market data and fetches none, on purpose — a calculator quietly serving a stale price snapshot is worse than one that says what it does not know. Everything here projects forward from assumptions you can see and change. For actual historical series, use a source that maintains them.

Not on this page. Commissions are assumed to be zero, and no tax is deducted on the way in or out. For an ongoing plan those two are not small over decades, which is why the compound interest calculator carries an explicit fee drag and tax rate. The link under the year-by-year table hands this plan straight to it with your figures already filled in.

No — every figure here is nominal. A $85,526 balance in ten years does not buy what $85,526 buys today, and at 3% inflation it is worth about $63,600 in today's money. Rather than duplicate the machinery, this page keeps to nominal and the compound interest calculator reports both nominal and real.

No. The entire calculation runs in your browser. There is no account, no server call when you change a figure, and nothing you enter leaves the page — the Copy link button encodes your inputs into the URL so you can share or bookmark a scenario, and that link is the only place they ever go.