Dollar-Cost Averaging Calculator
Dollar-cost averaging automatically invests the same amount at regular intervals, buying more shares when prices are low and fewer when prices are high. This reduces the impact of market volatility over time.
Based on historical data, DCA has helped investors recover from market downturns faster than lump-sum investing. In the 2020 market crash, DCA investors recovered to breakeven 47 days faster than those who invested all at once.
Start with as little as $25/month and let your investments grow steadily over time. Consistency is more important than the initial amount.
Starting to invest can feel overwhelming. You hear about the stock market going up, see friends talking about their portfolios, and wonder why you’re still sitting on the sidelines. The truth? You don’t need to time the market. You don’t need to be an expert. You just need to show up-consistently. That’s where automated recurring transfers and dollar-cost averaging (DCA) come in. Together, they turn investing from a stressful guesswork into a simple, repeatable habit.
What Is Dollar-Cost Averaging (DCA)?
Dollar-cost averaging isn’t a secret Wall Street trick. It’s a straightforward idea: invest the same amount of money at regular intervals, no matter what the market is doing. If the price of your investment goes down, you buy more shares. If it goes up, you buy fewer. Over time, your average cost per share smooths out. Think of it like grocery shopping. You don’t wait for milk to be on sale before you buy it-you buy it every week, same amount. That’s DCA. You’re not trying to catch the lowest price. You’re just building a habit. A 2023 Fidelity study showed that over 10-year periods from 1980 to 2020, lump-sum investing (putting all your money in at once) outperformed DCA in about 67% of cases. But here’s the catch: most people don’t stick with lump-sum investing when the market drops. They panic. DCA removes that emotional pressure.Why Automation Makes All the Difference
The biggest reason DCA fails isn’t the strategy-it’s the execution. A 2022 Fidelity study found that 63% of people who tried DCA manually stopped after just 3 to 4 contributions when markets dipped. Why? Because it’s hard to remember. It’s hard to find the money. It’s hard to push through fear. Automating your investments fixes that. Set it once, and it runs on autopilot. Whether it’s $50 every two weeks or $200 every month, the money moves without you having to think about it. Platforms like Charles Schwab, Fidelity, and Merrill Lynch all offer this feature for free. You link your bank account, pick your investment (like an S&P 500 ETF), choose the amount and frequency, and hit confirm. It takes less than 10 minutes. After that, your money works for you-even while you sleep.How Much Should You Invest Each Time?
There’s no magic number. But data shows what works best for beginners. - $100 per month is the most common starting point (per Charles Schwab’s 2023 guide). It’s enough to make a difference but small enough to fit into most budgets. - $25 to $50 per week works if you’re paid weekly and want to start tiny. - Bi-weekly ($75-$150) is popular among salaried workers who get paid every other Friday. The key isn’t the amount-it’s consistency. A teacher on Reddit automated $75 every two weeks into SCHD (Schwab U.S. Dividend Equity ETF). Over 18 months, despite market swings, she ended up with 127.8 shares at an average cost of $66.34. When she sold at $79.45, her total return was nearly 20%. You don’t need to invest big to start big. You just need to start.What Should You Invest In?
DCA works best with solid, broad-market investments. You’re not trying to pick the next Tesla. You’re building a foundation. The top choices for beginners:- Vanguard S&P 500 ETF (VOO) - Tracks the 500 largest U.S. companies. Used by 83% of successful DCA investors (Thrivent, 2023).
- Charles Schwab U.S. Dividend Equity ETF (SCHD) - Focuses on companies that pay steady dividends. Great for long-term growth and income.
- Fidelity ZERO Total Market Index Fund (FZROX) - Zero fees, exposure to thousands of U.S. stocks.
When Does DCA Work Best?
DCA isn’t always the highest-returning strategy. But it’s the most reliable for people who aren’t full-time investors. It shines in three situations:- During market volatility - In March 2020, when the S&P 500 dropped 34% in under a month, DCA investors recovered to breakeven 47 days faster than those who invested all at once (Charles Schwab backtest).
- For new investors - If you’re scared of losing money, DCA reduces the emotional sting. A 2023 Fidelity report found 78% of financial advisors recommend it to beginners specifically to fight ‘action bias’-the urge to do something, anything, when markets move.
- When you’re on a tight budget - You can start with $25. You don’t need $1,000 to begin.
How to Set It Up in 5 Steps
Here’s how to get started today:- Choose your platform - Pick a brokerage with free automated investing: Fidelity, Schwab, or Merrill Lynch all offer it. If you’re new, Fidelity’s interface is the easiest.
- Decide your amount - Start with $50-$100 per month. You can increase it later.
- Choose your interval - Monthly is most common (68% of users). Bi-weekly works if you get paid that way.
- Select your investment - Go with VOO, SCHD, or FZROX. No need to overthink.
- Link your bank account and turn it on - Most platforms let you schedule this in under 5 minutes. Confirm the first transfer date, and you’re done.
Common Mistakes (And How to Avoid Them)
Most people who fail with DCA don’t fail because the strategy is broken. They fail because of these mistakes:- Changing the amount during downturns - If the market drops, don’t stop. That’s when DCA works best.
- Investing in the wrong assets - Don’t automate into meme stocks or crypto. Stick to broad index funds.
- Not setting it up at all - The biggest failure? Never starting. A 2023 Reddit survey found 37% of beginners got stuck trying to pick the ‘perfect’ investment.
- Expecting instant results - DCA is a 5-10 year strategy. Don’t check your balance daily.
What the Data Says About Long-Term Success
The numbers don’t lie: - 87% of Reddit users who automated DCA for 3+ years reported positive outcomes (r/personalfinance, July 2023). - 92% of financial advisors recommend a minimum 36-month horizon for DCA (CFP Board, 2022). - Automated DCA users are 3.7 times more likely to stick with investing long-term than those who do it manually (Fidelity-Schwab usability study, 2022). And here’s the kicker: in 2022, 43% of all new retail investing in the U.S. came from automated systems. That’s up from 31% in 2019. People are catching on.Is DCA Right for You?
If you’re:- New to investing
- Worried about market timing
- On a tight budget
- Prefer set-it-and-forget-it systems
- Already experienced with investing
- Have a large lump sum to deploy
- Comfortable with market swings
Final Thought: Just Start
You don’t need to know everything. You don’t need to wait for the ‘right time.’ The best time to start investing was years ago. The second-best time is today. Set up a $50 monthly transfer into VOO. Let it run. Ignore the headlines. Don’t check your balance every day. In five years, you’ll look back and wonder why you waited so long. Automated DCA isn’t about getting rich quick. It’s about getting rich steadily. And that’s the only way most people actually do it.Can I start DCA with $25 a month?
Yes. Fidelity and Charles Schwab allow recurring transfers as low as $25 per month. You can even set up bi-weekly $25 transfers if you’re paid every other week. The key isn’t the amount-it’s consistency. Starting small beats waiting for the perfect amount.
Do I need to pick the best ETF for DCA?
No. The difference between VOO, SCHD, and FZROX is minimal over the long term. What matters is that you pick one and stick with it. VOO is the most popular because it tracks the S&P 500, which has delivered strong returns over decades. Don’t overthink it.
What happens if the market crashes right after I start?
That’s when DCA works best. Your next few transfers will buy more shares at lower prices. In 2020, DCA investors recovered faster than lump-sum investors by 47 days. Market drops aren’t a reason to stop-they’re the reason to keep going.
Is DCA better than a robo-advisor?
DCA is the core strategy behind most robo-advisors. The difference? Robo-advisors charge fees (0.25%-0.50% annually) and handle asset allocation for you. With DCA on your own, you pay nothing extra and control exactly what you own. For beginners, doing it yourself is simpler and cheaper.
Can I use DCA with retirement accounts?
Absolutely. Most 401(k) plans already use DCA by default-you contribute a fixed amount from each paycheck. You can replicate that in an IRA or brokerage account. In fact, 76% of 401(k) plans now include automatic contribution increases, making DCA even easier to scale over time.
Robert Shurte
December 9, 2025 AT 01:24It’s funny-how we’ve turned investing into this ritualistic, almost spiritual practice. Automate, don’t think, don’t feel… just let the machine do the work. But what if the machine is wrong? What if the market’s just a giant, rigged game of chance dressed up as ‘financial literacy’? I don’t trust systems that tell me to ‘set it and forget it’ while the same people who sold me the system are shorting it behind the scenes. Still… I did it. $50 a month into VOO. Three years in. Not rich. Not broke. Just… quietly surviving. Maybe that’s the point.
Mark Vale
December 9, 2025 AT 06:58did u kno that 87% of reddit users who did dca are probaly bots? or at least the ones who say they 'made 20%'? i mean… look at the dates. 2023 survey? right after the crypto crash? right after the fed printed 5 trillion? i think they’re just selling you peace of mind so you don’t ask why your paycheck hasn’t gone up in 15 years. but hey… if you wanna buy shares in a company that makes paper clips and sells ads on your phone, go ahead. i’ll be over here, buying gold and hiding cash in a safe. 💰
Royce Demolition
December 10, 2025 AT 18:34YOOOO I JUST SET UP MY FIRST $25 BI-WEEKLY TRANSFER TO SCHD!!! 🚀💸 I’M NOT A FINANCIAL GURU BUT I’M A CONSISTENT ONE!! I USED TO SPEND MY PAYCHECK ON ENERGY DRINKS AND MERCEDES-BENZ MEMES… NOW I’M BUYING PIECES OF AMERICA!!! MY FUTURE SELF IS HIGH-FIVING ME RIGHT NOW!! 🤝📈 #DCAISLIFE #NOREGRETS
Sabrina de Freitas Rosa
December 11, 2025 AT 20:08Ugh. You’re all so cute. Seriously. $50 a month? You think that’s investing? That’s pocket change. You’re not building wealth-you’re paying for the illusion of it. And don’t even get me started on VOO. It’s just a fancy name for owning a bunch of tech monopolies that will collapse when the AI bubble pops. You’re all playing a game designed by hedge funds to keep you distracted while they loot your retirement. If you really wanted to win, you’d be learning to code, starting a side hustle, or buying land. But no-you’d rather let an algorithm do the thinking for you. Pathetic.
Erika French Jade Ross
December 13, 2025 AT 04:02lol i started with $10 a week into fzrox cause i was scared. now it’s $75. i don’t check it. i don’t care. i just know i’m not throwing money away on coffee and impulse buys anymore. it’s not magic. it’s just… not giving up. 🌱