Regular investing projection.
Final balance
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Total invested
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Investment growth
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The strategy of buying the same dollar amount every month
Dollar-cost averaging means putting a fixed sum into the market on a regular schedule no matter what prices are doing. When markets dip your fixed amount buys more units, when they climb it buys fewer, and over time your average entry price smooths out. It is how most Australians actually invest, whether they realise it or not, because money lands from each pay and gets put to work straight away. The discipline removes the urge to wait for the perfect moment, which is the urge that keeps most people in cash for years.
This calculator projects where that habit leads. It compounds an optional starting lump sum and then adds your monthly contribution at the end of each month, growing the balance at your expected return. The key output is the split between what you put in and what growth added on top. It is for anyone setting up an automatic investment from their salary into shares, ETFs, or a managed fund and wanting to see the long arc.
How the monthly compounding runs
The tool steps through one month at a time. Each month the existing balance grows by one twelfth of your annual return, then your contribution is added. Doing it monthly rather than as a single annual figure matters, because money invested in January has eleven more months to compound than money invested in December, and over fifteen years those extra months stack into real dollars.
$1,000 a month for fifteen years
Take the defaults: a $10,000 starting lump sum, $1,000 invested every month, an 8 percent expected return, over fifteen years. Here is how it resolves.
| Item | Amount |
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You contribute $190,000 of your own money and end with $379,107. Growth of $189,107 means compounding roughly matched everything you put in. The longer the horizon, the more lopsided this becomes in favour of growth, which is why starting early beats trying to invest larger amounts later.
Tax and timing in the real world
This projection shows growth before tax. In a taxable Australian brokerage account, the distributions you receive along the way are assessable each year, and when you eventually sell, any gain on units held longer than twelve months qualifies for the 50 percent capital gains tax discount. A neat side effect of dollar-cost averaging is that each monthly parcel has its own purchase date, so over time more of your holding crosses that twelve-month line and becomes eligible for the discount.
One honest caveat: the calculator assumes a steady 8 percent every year, but real returns arrive in lumpy bursts with crashes in between. The final figure is a smoothed expectation, not a promise. The practical tip that survives every market cycle is automation. Set the monthly transfer to fire the day after payday, and you remove the single biggest threat to the plan, which is your own hesitation when headlines turn grim.
Should I wait for a market dip before I start?
Trying to time the start usually costs more than it saves, because the days you sit in cash are days your money is not compounding, and dips are obvious only in hindsight. The whole point of dollar-cost averaging is that you buy through the dips automatically. Starting now and staying consistent beats waiting for a signal that may never clearly arrive.
How much difference does the return assumption make?
A lot, over long horizons. Nudging the expected return from 8 to 9 percent on a fifteen-year plan adds tens of thousands to the final balance, because the extra percent compounds on a growing base every year. It is worth running the tool at a couple of return levels to see a realistic range rather than fixating on a single number.