Lump sum vs. spreading it in calculator
In short
The arithmetic and the honest caveat.
Interactive: lump sum vs. spreading it inEasy
The question every inheritance, bonus and house sale raises: invest it all now, or feed it in monthly?
- Lump sum ends at
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- Spread in ends at
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- Difference
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- Reading
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Assumes a constant return, so lump sum mathematically wins whenever expected returns are positive — the historical evidence agrees about two thirds of the time. What spreading in actually buys is a smaller worst case and a much smaller chance of regret, which is a real benefit the arithmetic can't price.
The idea behind it
This calculator belongs to Cash Equities, where the mechanism it computes is explained step by step, with the formula, what each input means and where the simple model stops being right. Everything is computed in your browser; nothing you type is sent anywhere.
Instruments it applies to
- Preferred Stock — A hybrid between a bond and a share: fixed dividends, priority over common stock, usually no vote.
- ADR / GDR — A foreign share repackaged to trade on your home exchange, in your currency.
- REIT — Own a slice of office towers, warehouses or data centres through a share that pays out most of its rent.
- Mutual Fund — The original pooled investment: professional management, one price per day, bought at NAV.
- Closed-End Fund — A fund with a fixed share count — so the fund itself trades above or below what it owns, and the gap is the whole game.
- Exchange-Traded Note — Tracks an index like an ETF, but it is a bank's promise rather than a pot of assets — and the difference only shows up on the day the bank fails.
- Leveraged & Inverse ETP — A wrapper that delivers a multiple of an index — for one day. Over any longer period it delivers something else entirely, and the gap is arithmetic rather than error.
More calculators from Cash Equities
- Fair-value calculator (dividend discount model) — Gordon growth, on one screen.
- Compound growth & savings plan — the most consequential calculator here.
- Drawdown & recovery math — what a loss actually costs to undo.
- Valuation quick check — P/E, PEG, implied return vs. the bond.