DCA simulator.

Dollar-Cost Averaging (DCA) means investing fixed amounts at regular intervals regardless of market price. 500/month into S&P 500 over 30 years = 180k contributed, ~610k final value at 7% average return. Forces buying more shares when prices fall (great), fewer when prices rise. Removes timing decisions and emotion.

Example: 500/month for 20 years at 7% return. Total contributed 120k. Final value 255k. Total gain 135k - 113% of contributions. Equivalent lump sum (120k upfront) at 7% over 20 years: 464k - significantly more. Lump sum wins mathematically because money compounds longer.

DCA vs lump sum: lump sum wins mathematically 2/3 of the time (Vanguard study) because markets rise more than fall. But DCA wins behaviourally - reduces regret risk if market crashes after lump sum. For most people without large lump sums, DCA via salary deduction is the only realistic option. Best of both worlds: lump sum what you have, DCA new income.

A worked example

Try the defaults: monthly investment of 500, expected annual return of 7%, years of 20 years, annual volatility of 15%. The tool returns 260,463.33. You can adjust any input and the result updates as you type — no submit button, no reload. That's the real power here: seeing how sensitive the output is to one or two assumptions.

What moves the number most

The result responds to Monthly Investment, Expected Annual Return %, Years, and Annual Volatility %. Frequency and unit price pull the total in different directions. The biggest surprise for most people is how small recurring amounts compound into large annual figures — that's where this calculation earns its keep.

The formula behind this

Future value of monthly annuity at compound interest rate. Everything the calculator does is shown in the formula box below, so you can check the math against your own spreadsheet if you want.

Using this well

Treat the output as one point on a wider map. Run it three times — a pessimistic case, a central case, and a stretch case — and plan against the pessimistic one. That habit alone separates people who stick with an investment plan from those who bail at the first wobble.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.