Invest a fixed amount, on schedule, and watch it grow.
Set a starting balance, a recurring contribution, how often you invest and an expected return. See the projected value, how much of it is your own money, how much is gain, and how the same total would fare as one lump sum on day one.
Your plan
Contributions are added at the end of each period and start growing right away. Weekly uses 52 periods a year, monthly 12, quarterly 4.
What your numbers mean
How the value grows
Where the final value comes from
Initial vs contributions vs gain
The scorecard
Dollar-cost averaging vs one lump sum
Same money, two ways in. Lump sum puts the entire total to work on day one, dollar-cost averaging feeds it in over time. Lump sum usually wins on paper because the money is invested longer, but averaging in spreads out your entry price and is far easier to actually do.
Year-by-year projection
Each row shows the value at the end of that year, everything you have invested so far, and how much of the value is pure gain.
| Year | Invested this year | Total invested | Gain | Value |
|---|
Dollar-cost averaging, explained
What Dollar-Cost Averaging Is
Dollar-cost averaging is the practice of investing a fixed amount of money at regular intervals, weekly, monthly, or quarterly, regardless of what the market is doing. Because you invest the same dollar amount every time, you automatically buy more shares when prices are low and fewer shares when prices are high, which smooths out your average purchase price over time. This calculator projects the future value of that habit using the formula FV = initial times (1 + r)^n plus contribution times (((1 + r)^n - 1) / r), where r is the periodic return and n is the total number of periods. The approach removes the pressure of trying to time the market and turns investing into a simple, repeatable routine that is easy to keep up for years.
How Your Contributions Compound
Each contribution you make starts earning returns the moment it lands, and those returns then earn returns of their own. The result is that money invested early does far more work than money invested near the end, because it has more time to compound. A $500 monthly contribution at an 8% expected return grows to roughly $91,000 over 10 years and about $296,000 over 20 years, and the second decade adds far more than the first even though you invest the same amount each month. This is why the size of your final balance is driven as much by how long you stay invested as by how much you put in, and why an automated contribution you never have to think about is one of the most reliable ways to build wealth.
Dollar-Cost Averaging Versus Lump-Sum Investing
If you already have a large sum in hand, investing it all at once usually beats spreading it out, because the full amount is exposed to market growth for the entire period rather than trickling in. Studies of historical returns find that lump-sum investing outperforms dollar-cost averaging roughly two thirds of the time, simply because markets rise more often than they fall. The catch is that most people do not have a large lump sum sitting idle, they invest from each paycheck, so dollar-cost averaging is not really a choice against lump sum, it is just how the money arrives. It also protects you from the worst-case regret of investing everything the day before a downturn, which makes it far easier to stick with through rough patches.
Setting Realistic Return Expectations
Setting realistic return expectations keeps your plan honest and avoids disappointment later. The U.S. stock market has historically returned about 10% annually before inflation and roughly 7% after inflation, as measured by the S&P 500 over the past century. Bonds have averaged 5% to 6% before inflation, while savings accounts and CDs currently pay 4% to 5%. A diversified mix of stocks and bonds might reasonably target 6% to 8% after inflation, and using a conservative figure in this calculator builds in a margin of safety. Remember that real returns arrive unevenly, some years are strongly positive and others negative, so treat the smooth projection here as a long-run average rather than a promise for any single year.
Common questions
What is dollar-cost averaging?
Dollar-cost averaging is investing a fixed amount at set intervals, such as $500 every month, no matter what the market is doing. You end up buying more shares when prices are low and fewer when prices are high, which smooths out your average cost and removes the need to time the market.
How does this calculator project my future value?
It uses the formula FV = initial times (1 + r)^n plus contribution times (((1 + r)^n - 1) / r), where r is your expected annual return divided by the number of periods per year and n is the number of years times the periods per year. Weekly uses 52 periods, monthly 12, and quarterly 4.
Is dollar-cost averaging better than investing a lump sum?
On paper a lump sum usually wins, because the full amount is invested for the entire period and markets rise more often than they fall. But if you are investing from each paycheck rather than sitting on a large sum, dollar-cost averaging is simply how the money arrives, and it keeps you invested through every market mood.
What rate of return should I assume?
Use about 7% for a conservative, inflation-adjusted stock market return, or 10% for a nominal figure before inflation. For bonds use 4% to 6%, and for savings accounts 4% to 5% currently. Your actual result depends on your mix of investments, so pick a conservative number.
Why does starting early matter so much?
Because returns compound, the dollars you invest earliest have the most time to grow and contribute the most to your final balance. Investing $500 a month at 8% for 30 years reaches roughly $745,000, while starting 10 years later reaches only about $296,000, even though you contributed just $60,000 less.
Can I set the initial investment to zero?
Yes. If you are starting from scratch, set the initial investment to 0 and the projection will be built entirely from your recurring contributions. The math still works, the initial term simply drops out and the whole future value comes from the annuity of your regular deposits.
Estimates for planning only. A fixed return never repeats in the real world, markets swing year to year, and taxes, fees and inflation all take a bite. Use conservative numbers and treat this as a guide, not a promise.