What is dollar-cost averaging?

Dollar-cost averaging is investing a fixed amount at regular intervals, regardless of the price. It smooths out the price you pay, buying more units when prices are low and fewer when high, and removes the stress of trying to time the market.

Does dollar-cost averaging work?

It is a simple, disciplined approach that suits most everyday investors. It does not guarantee a profit, but it keeps you investing consistently through ups and downs, which is often better than waiting for the perfect moment.

How much should I invest regularly?

Choose an amount you can sustain through both good and bad markets, since consistency is the point. This calculator shows how different regular amounts build over time.

Dollar-Cost Averaging Calculator

This New Zealand calculator models the outcome of investing a fixed amount regularly over time, the dollar-cost averaging approach that suits most everyday investors. You enter your regular contribution, frequency, and an expected return, and the tool projects how the investment builds, smoothing the effect of market ups and downs by buying consistently rather than trying to time the market. The breakdown shows your total contributions, the growth earned, and the combined balance over time, helping investors see the value of steady, disciplined investing and plan a regular contribution they can sustain through both good markets and bad.

Regular contribution

Frequency

Expected return

Years

projected balance from regular investing

Total contributed$0

Growth earned$0

Returns are assumed steady for the projection, while real markets rise and fall, which is exactly why regular investing helps. Figures are before tax and not guaranteed. Choose a contribution you can keep up through downturns. Estimate only, not financial advice.

How it works

The calculator adds your contribution at each interval and grows the balance at your expected return, compounding over the years. It then splits the final balance into the money you put in and the growth earned on top. In real life, investing the same amount regularly means you buy more units when prices are low and fewer when high, which smooths your average price and removes the temptation to time the market.

Worked example

Investing $500 a month for 20 years at a 7% return builds to around $260,000, of which $120,000 is your contributions and roughly $140,000 is growth. The longer you keep going, the more growth outweighs contributions, thanks to compounding.

Related calculators

Investment Calculator: project investments.
Compound Interest Calculator: compounding.
Dividend Reinvestment Calculator: reinvesting dividends.
KiwiSaver Calculator: project KiwiSaver.

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