DCA vs Lump Sum Calculator
You have a sum of money. Invest it all today, or spread it out? Same budget, same time, side by side — see the exact difference.
Your budget
$
%
10 years
DCA spread: $500/month over the full period.
After 10 years
Dollar-cost averaging
$86,542
Invested $60,000 · Growth $26,542
Lump sum
All upfront
$120,580
Invested $60,000 · Growth $60,580
DCALump Sum
Show yearly breakdown
| Year | Contributions | DCA | Lump Sum |
|---|
How this comparison works
The model
Both paths invest the same total over the same period at the same annual return. Lump Sum invests everything on day one. DCA invests an equal amount each month:
Lump Sum: FV = T · (1+i)N
DCA: FV = M · ( ((1+i)N − 1) / i ), M = T / N
DCA: FV = M · ( ((1+i)N − 1) / i ), M = T / N
T = total to invest · M = monthly amount · i = monthly rate · N = number of months.
Important limits of this model
- Assumes a constant annual return — no volatility, no crashes, no sequence-of-returns risk.
- Does not include taxes, inflation, fees or dividend timing.
- With any positive constant return, Lump Sum mathematically always wins, because every dollar is invested longer.
- In real markets DCA's value is risk reduction, not higher expected return. This tool shows the pure math, not a recommendation.
Educational purposes only. Not financial advice. See the full methodology and disclaimer.
Lump sum vs DCA, explained
Why does lump sum usually win?
In this model every dollar is invested from day one and compounds for the whole period, while DCA dollars enter the market gradually. With a constant positive return, money invested sooner always ends up with more.
So should I always invest a lump sum?
Not necessarily. The calculator assumes no volatility. In real markets lump sum has historically won on average, but it carries more risk — if the market drops right after you invest, DCA would have bought at lower prices. The right choice depends on your risk tolerance.
Does this calculator include market volatility?
No. It's a constant-return model that isolates the pure math. It ignores volatility, dividend timing and sequence-of-returns risk, so real outcomes will differ.