All at once, or spread over time?
Put the same money in on day one or drip it in over months. See the gap the arithmetic actually produces.
A windfall, a bonus, a maturing deposit.
How many equal monthly instalments the second option uses.
Applied to whatever is invested at the time. Uninvested cash earns nothing.
More options(3)
Investing $50,000 at once, versus over 12 months
$6,927
After 20 years at 7% a year, going in all at once ends at $193,484 and spreading it over 12 months ends at $186,557 — a difference of $6,927, or 3.7%. The gap exists for one dull reason: money waiting to be invested is not earning anything, and this model assumes a steady return with no falls. In a year that actually dropped, spreading would come out ahead.
- All at once
- $193,484
- Over 12 months
- $186,557
- Difference
- $6,927
If returns average…
Nobody knows which of these happens
| Assumption | Difference | All at once |
|---|---|---|
| 4% a year — cautious | $2,296 | $109,556 |
| 7% a year — middle | $6,927 | $193,484 |
| 10% a year — optimistic | $16,805 | $336,375 |
Markets do not return the same amount every year. The band shows the same plan under three different assumptions, so you can see how much the answer depends on a number nobody knows.
What this model cannot capture
A steady return is exactly the assumption that decides this comparison, and it is the one assumption guaranteed to be wrong. Under a smooth upward line, being invested sooner always wins — the result above is close to arithmetic rather than insight. Spreading the money in only pays off when prices fall while you are still buying, which a smooth curve never does.
The other half of the question is not arithmetic at all. Putting a large sum in on one day and watching it fall 20% the following month is a different experience from having done it in twelve pieces, and the plan you actually stick to beats the plan that wins on a spreadsheet. This tool cannot weigh that for you, and it will not try.
Read the result carefully
This is one of the few calculators on the internet where the honest thing to say is that the output is nearly a tautology. Under a steady positive return, money invested earlier compounds for longer, so the lump sum wins. It cannot do anything else. The number above is telling you the size of that effect, not settling the question.
What decides the comparison in real life is the one thing the model does not contain: whether prices fall while you are still buying. Spreading money in only pays off in that case, and a smooth curve never produces it.
What the model assumes
- Uninvested money earns nothing. If your cash is sitting somewhere paying interest, the gap narrows. That is a simplification, stated here rather than buried.
- Both routes end up fully invested in the same thing, with the same charges, for the same total period.
- The return arrives evenly. The decisive assumption, and the one that is certainly false. Why that matters.
- No tax and no dealing costs. Twelve purchases may cost more in commission than one, depending on the platform.
The part that is not arithmetic
Putting a large sum in on a single day and watching it drop 20% the following month is a materially different experience from having done it in twelve pieces. People who have that experience early sometimes sell, and selling after a fall is far more expensive than any gap this calculator will show you.
Spreading the money in is often described as buying insurance against regret. That framing is fair: like most insurance it has a measurable expected cost — which is precisely the number above — and it may still be worth paying. This site cannot tell you whether it is worth it for you, because that depends on how you would actually behave, and you know that better than a web page does.
A note on the phrase
Investing a fixed amount at regular intervals is often called dollar-cost or pound-cost averaging. It is worth separating two situations that get the same name: having a lump sum and choosing to feed it in slowly, which is what this page models, and simply investing out of each month's income as it arrives, which is not a strategy choice at all — it is just what happens when you have a salary and a standing order. Most of the argument about averaging conflates the two.
For the second case, the growth calculator is the right tool.
Common questions
So is investing a lump sum better?
What if the market falls right after I invest?
How long a spread should I compare?
Not advice. This tool applies arithmetic to assumptions you entered. It does not know your circumstances, your tax position or your goals, and it is not a recommendation to buy, sell or hold anything. Past returns do not predict future ones, and no figure here is a forecast.