{
  "slug": "dollar-cost-average",
  "title": "Dollar Cost Averaging Calculator",
  "heading": "Dollar Cost Averaging (DCA) Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/dollar-cost-average",
  "summary": "Compare investing all at once against spreading it over time.",
  "description": "Lump sum beats DCA about two-thirds of the time simply because markets rise more often than they fall. DCA is a behavioural tool for reducing regret, not a return optimizer.",
  "formula": "Balance = Σ contribution × (1 + monthly return)^(remaining months).",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=dollar-cost-average",
  "inputs": [
    {
      "id": "total",
      "label": "Total to invest",
      "kind": "number",
      "hint": null,
      "default": 60000,
      "unit": "$",
      "min": 0,
      "max": null
    },
    {
      "id": "months",
      "label": "Months to spread it over",
      "kind": "number",
      "hint": null,
      "default": 12,
      "unit": null,
      "min": 1,
      "max": 60
    },
    {
      "id": "returnRate",
      "label": "Expected annual return",
      "kind": "number",
      "hint": null,
      "default": 8,
      "unit": "%",
      "min": -20,
      "max": 30
    },
    {
      "id": "horizon",
      "label": "Total horizon (years)",
      "kind": "number",
      "hint": null,
      "default": 10,
      "unit": null,
      "min": 1,
      "max": 40
    }
  ],
  "outputs": [
    {
      "id": "dca",
      "label": "Balance with dollar cost averaging",
      "format": "currency",
      "hint": null,
      "primary": true
    },
    {
      "id": "lump",
      "label": "Balance investing it all at once",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "diff",
      "label": "Lump sum advantage",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "per",
      "label": "Amount invested per month",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "dcaGain",
      "label": "DCA gain",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "lumpGain",
      "label": "Lump sum gain",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Total to invest: 60000 $",
      "Months to spread it over: 12",
      "Expected annual return: 8 %",
      "Total horizon (years): 10"
    ],
    "outputs": [
      "Balance with dollar cost averaging: $128,433.05",
      "Balance investing it all at once: $133,178.41",
      "Lump sum advantage: $4,745.37",
      "Amount invested per month: $5,000.00",
      "DCA gain: $68,433.05",
      "Lump sum gain: $73,178.41"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter total to invest ($).",
      "Enter months to spread it over.",
      "Enter expected annual return (%).",
      "Enter total horizon (years).",
      "Read your balance with dollar cost averaging on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "total": 36000,
        "months": 7,
        "returnRate": 4.8,
        "horizon": 6
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "total": 60000,
        "months": 12,
        "returnRate": 8,
        "horizon": 10
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "total": 96000,
        "months": 19,
        "returnRate": 12.8,
        "horizon": 16
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "How does the dollar cost averaging (dca) calculator work?",
      "a": "Lump sum beats DCA about two-thirds of the time simply because markets rise more often than they fall. DCA is a behavioural tool for reducing regret, not a return optimizer. The underlying maths is: Balance = Σ contribution × (1 + monthly return)^(remaining months)."
    },
    {
      "q": "What do I need to enter?",
      "a": "4 values: total to invest, months to spread it over, expected annual return, and total horizon (years). Each field starts with a sensible default, so you can change one number at a time and watch the result move."
    },
    {
      "q": "What does the balance with dollar cost averaging result mean?",
      "a": "It is returned as a money amount in US dollars and updates live as you edit the inputs, so you can compare two or three versions of a scenario in a few seconds."
    },
    {
      "q": "Is this calculator free, and do I need an account?",
      "a": "Yes, it's free, and no account is required. Nothing you type is stored on our servers — the maths runs entirely in your browser."
    },
    {
      "q": "How accurate is the result?",
      "a": "It applies the standard formula exactly, so the arithmetic is precise. Results are estimates before tax, fees, and inflation unless an input explicitly covers them."
    },
    {
      "q": "Who is this tool for?",
      "a": "It's built for anyone comparing money scenarios before committing — budgeting a payment, sanity-checking a quote, or seeing what a change in rate or term actually costs."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/stock-return",
    "https://www.revenuelab.fyi/toolbox/dividend-reinvestment"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Dollar Cost Averaging Calculator (https://www.revenuelab.fyi/toolbox/dollar-cost-average)"
}