24: What Is Dollar Cost Averaging and How Does It Impact Your Wealth?

Girl on FIRE

English - June 13, 2021 20:00 - 26 minutes - 12.6 MB - ★★★★★ - 37 ratings
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Previous Episode: 23: How Much Money Do you Need for Retirement (Does the 4% Rule Really Work?)

Next Episode: 25: How to Get Rich While You Sleep (What You Need to Know About Dividends)

🎙 Dollar cost averaging is a common investing strategy that’s often considered to be good for beginner investors and those investing under a long term buy and hold strategy. But it may not be the best option for you. How does it work? And how does using a dollar cost averaging strategy impact your wealth? 🤔

This episode discusses topics like:

🌟 How dollar cost averaging works and how you can implement this strategy;

🌟 How dollar cost averaging can be beneficial for beginners and emotional investors; and

🌟 How dollar cost averaging can increase your wealth and when it’ll result in you leaving money on the table.

Links from this episode:

Episode transcript and show notes: https://www.papermoneyco.com/24-dollar-cost-averaging

Dollar Cost Averaging: Truth or Fiction study by Morningstar: https://www.morningstar.com.au/learn/article/the-dollar-cost-averaging-myth-why-lump-sum-i/197410

Investment frequency calculator: https://investcalc.github.io

Time codes:

00:00 Hello & Welcome!

02:11 What Is Dollar Cost Averaging and How Does It Work?

11:38 FIRE & Investment Calculator Spreadsheet

13:40 Advantages and Benefits of Dollar Cost Averaging

16:55 Disadvantages of Dollar Cost Averaging

21:30 How Priya Invests

24:32 Next Weeks’ Episode

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The advice shared on Girl on FIRE is general in nature and does not constitute financial advice. The information shared does not consider your individual circumstances. Girl on FIRE exists purely for educational purposes and should not be relied upon to make an investment or financial decision.