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Lump sum vs phased investing calculator

Compare two ways to invest the same sum: put it all in at once, or spread it evenly over several months. Both run at the same assumed return over the same period. One thing matters up front: with a constant return the outcome is fixed by the maths — the calculator shows the numbers but gives no recommendation about which suits you. Real markets move, and timing and the way each approach feels are left out. Everything runs in your browser; nothing is stored or sent.

Compare two ways to invest the same total: put it all in at once, or spread it over several months. With a constant assumed return the outcome is fixed by the maths and not a recommendation. The assumed return is an example assumption. The calculation runs in your browser; nothing is stored.

What your result means

The cards give the two end values and the difference in money and per cent, plus the monthly instalment the phased approach implies. A positive difference means the lump sum ends higher; a negative one means the phased approach does. At a constant positive return the lump sum always ends ahead — not a market edge, just more time invested. The table traces both paths year by year. None of it says which approach is right for you.

How this calculator works

Both scenarios invest the same total and earn the nominal monthly return (the yearly rate divided by twelve) across the whole period. The lump sum invests everything at the start. The phased approach splits the total into equal monthly amounts over the phasing period; after the last one, everything stays invested to the end of the horizon.

The two end values give the difference in money and — against the phased value — in per cent. With a positive assumed return the lump sum is necessarily ahead, because its money is invested for longer; at 0% they are level; with a negative assumption the phased approach is ahead. That relationship is purely mathematical and says nothing about reality.

The calculator deliberately models no price swings (so there is no cost-averaging gain or loss from a moving price) and makes no assumption about the 'right' moment. Internally the calculation is unrounded and only rounded for display.

Formula and variables

Lump sum=Total · (1 + g)^H
Phased=Instalment · Σ (1 + g)^(H − k + 1) for k = 1..V
Difference=Lump sum − Phased
g
monthly return = Return / 12 / 100
H
horizon in months (years × 12)
V
phasing period of the phased variant, in months
Instalment
monthly amount = Total / V

Worked examples

Example 1: a positive assumed return

Example inputs
Total amount€30,000.00
Phasing period18 months
Assumed return7% p.a.
Horizon12 years
Example results
End value, lump sum€69,321.62
End value, phased€66,007.80
Difference€3,313.83
Difference (%)5.02%

At an assumed 7% a year, over 12 years the lump sum ends at €69,321.62 — €3,313.83 (5.02%) ahead of spreading the same €30,000.00 over 18 months, simply because its money is invested for longer. That follows from the assumption; it is not a recommendation. All figures are example assumptions.

Example 2: a negative assumed return

Example inputs
Total amount€30,000.00
Phasing period18 months
Assumed return−3% p.a.
Horizon12 years
Example results
End value, lump sum€20,920.86
End value, phased€21,372.55
Difference-€451.70
Difference (%)−2.11%

Assume a negative −3% instead and it flips: the phased approach ends at €21,372.55, €451.70 (2.11%) ahead, because less money is exposed to the early fall. This too is only a consequence of the assumption — real markets move differently. All figures are example assumptions.

Assumptions

  • Both variants invest the same total over the same period.
  • The return is constant and a freely chosen example assumption, not a forecast.
  • Price swings and timing effects are deliberately not modelled.

Limitations of this calculator

  • No volatility: real prices rise and fall, which changes the real outcome.
  • No timing risk and no behavioural factors are included.
  • No guarantee and no statement about which approach is better in reality.
  • No tax or charges (for charges, see the fund fees calculator).
  • No storage of your inputs (privacy by design).

Common misconceptions

  • Reading it as advice: The result follows from a constant assumed return; it is not a recommendation on which approach to take, and it ignores how each feels in a falling market.
  • Expecting a cost-averaging edge: With no price swings there is no averaging gain or loss here; that effect needs a moving price, which this model leaves out.
  • Forgetting real markets move: A single constant rate hides the ups and downs that make phasing feel safer or riskier in practice.

Frequently asked questions

Which approach is better?

The calculator deliberately does not say. With a constant positive assumed return the lump sum always ends ahead on the maths, because its money works for longer. But real prices move, and phasing in can feel more comfortable or make the risk easier to handle. Which suits you depends on your situation and how you would react to a fall.

Why does the lump sum always win at a positive return?

Because the whole amount is invested from the start and so has longer to compound at the assumed rate. With phasing, part of the money is not yet invested for a while. That is a necessary consequence of the constant return — not a market advantage and not a forecast.

Does it include the cost-averaging effect?

Not in the sense of a moving price. The calculator uses a constant return, so there is no gain or loss from buying at different prices. The cost-averaging effect people talk about needs price swings, which this model deliberately leaves out.

Are tax and charges included?

No. The comparison runs without tax or charges so the pure time effect stands out. To see how ongoing charges bite, use the fund fees calculator.

Sources and further reading

Official and independent sources on this topic. The links open each website in a new tab; no content is loaded from them into this page.

  • Dollar Cost AveragingU.S. Securities and Exchange Commission (Investor.gov)Defines the phased approach of investing equal amounts at regular intervals, regardless of market ups and downs.

Spotted an error in the calculation or the text?

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Last reviewed: 28/07/2026 · All calculations run in your browser – inputs are not stored. ·How we check our calculators