Lump sum vs DRIP.

Lump sum vs DRIP (drip feed / dollar-cost average) investing comparison. Vanguard study: lump sum outperforms DRIP ~67% of the time over 10 years. Why? Markets rise more than fall, so getting money in earlier captures more growth. 100k lump sum at 7% over 1 year: 7,000 gain. 100k drip-fed monthly over 12 months at 7%: ~3,800 gain (half the time invested).

Example: 100k to invest, 7% annual return. Lump sum at start: 107,000 after 1 year. DRIP 8,333/month over 12 months at 7% annualised: 103,829 after 12 months. Lump sum advantage: 3,171 (3.2% of total). Same math holds across longer DRIP periods - longer DRIP = bigger lump sum advantage.

When DRIP wins: market crashes during DRIP period (you buy more shares cheaper). When lump sum wins: rising market (most of time). Decision factors beyond pure math: regret risk (lump-sum then 30% crash hurts emotionally even if probabilistically optimal), behavioural commitment (DRIP harder to abandon), available cash (most don't have lump sums - DRIP is the only option). Best of both: lump sum what you have now, DRIP new income as it arrives.

Run it with sensible defaults

Using total amount to invest of 100,000, expected annual return of 7%, drip period of 12, the calculation works out to 3,957.46. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Total Amount to Invest, Expected Annual Return %, and DRIP Period (months) — do not pull with equal force. The rate and the time horizon usually dominate — compounding means a small change in either reshapes the final figure more than a similar shift in contribution size. Test this by doubling one input at a time.

How the math works

Lump sum compounded for full period vs equal monthly investments compounded. The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".

Why investors run this

Most people's intuition for compounding is wrong — not because the math is hard, but because linear thinking doesn't account for curves. Running numbers through a calculator like this one is the cheapest way to recalibrate that intuition before making an irreversible decision about contribution rate, asset mix, or retirement age.

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.