Investment timing: all at once, spread out or later?
Does it matter when your money goes in? Choose a comparison: a sum invested at once or spread over several months, or the same monthly amount started now or a few years later.
At once or spread: a worked example
€10,000 over 10 years at 6% a year and 0.14% ongoing costs ends at €17,942 when invested at once and at €17,385 when spread over 12 months: €557 less. Most of that gap appears in the first year (€329), while part of the money is still waiting; after that, it grows only with the return.
Start now or later: a worked example
€200 a month over 30 years ends at €195,607, with €72,000 put in. Starting 5 years later ends at €135,651, with €60,000 put in: €59,956 less at the end, for €12,000 less put in. The 6% is an illustrative assumption, not a forecast.
| After | Start now: put in | Start now: balance | Start later: put in | Start later: balance |
|---|---|---|---|---|
| 5 years | €12,000 | €13,904 | €0 | €0 |
| 10 years | €24,000 | €32,528 | €12,000 | €13,904 |
| 20 years | €48,000 | €90,891 | €36,000 | €57,475 |
| 30 years | €72,000 | €195,607 | €60,000 | €135,651 |
How it calculates. Both comparisons use the same net monthly return, (return − ongoing costs) ÷ 12, and deposits at the end of the month. In “at once or spread” the whole sum goes in at the start, or in equal parts over the months you choose; money still waiting earns nothing. In “start now or later” the same monthly amount runs from today or only after the years you choose.
How to read the result. With a constant positive return, investing earlier always ends higher, so the tool shows how big that head start is, not whether it will happen. The later starter ends exactly where the early starter stood five years before the end: the missing years are the last, largest ones. In real markets the order of returns decides which way ends higher.
What it is not. Not a forecast and not advice. The calculation assumes a constant return, while real markets rise and fall. Tax, transaction costs and inflation are not included, and money waiting to be invested earns no interest in the calculation.
Where it comes from. Only the formula of the ETF Calculator and your own input. The tool uses no external data and stores nothing.
The arithmetic, step by step
Each month the balance is multiplied by one plus the net monthly return, and the deposit for that month is added at the end. The net monthly return is the yearly return minus the ongoing costs, divided by 12. At 6% and 0.14% that is (6 − 0.14) ÷ 12 = 0.4883% a month, so €1,000 becomes €1,004.88 after one month. The tool repeats this step for every month of the period and rounds to whole cents each time. This is an illustration with an assumed constant return, not a forecast; real returns can be negative and past performance guarantees nothing.
A third situation: a larger sum, a slower spread, a long horizon
Take €25,000 and a horizon of 15 years, at 6% a year and 0.14% ongoing costs. Invested at once it ends at €60,084; spread evenly over 24 months it ends at €56,566. The gap is €3,517, of which €1,164 has appeared after the first year. A longer spread leaves more money waiting for longer, so the gap grows with the number of months, but it stays small compared with the whole sum because the waiting period is short next to 15 years.
Now the other comparison with different numbers: €150 a month for 25 years ends at €101,738 with €45,000 put in. The same monthly amount started 10 years later runs for 15 years and ends at €43,106 with €27,000 put in. The difference at the end is €58,632, while the later starter put in €18,000 less. These figures are an illustration at an assumed 6%, not a forecast; real returns can be negative and past performance guarantees nothing.
Common mistakes when reading the result
- Reading one example as proof that one way wins. The result depends on the path the market takes, which nobody knows beforehand.
- Ignoring the cost of waiting. Money held back for a later date does not earn the assumed return meanwhile.
- Comparing options with different total amounts. The tool is clearest when the same total is invested in both ways.
What the calculation leaves out
The tool uses one fixed return for every month. Real markets do not: if the sum is spread over months in which prices fall, the spread version can end higher than the lump sum, and in rising markets the other way round. Money that is waiting earns nothing here, although in practice it might earn some interest. Nothing is included for transaction costs, tax or inflation, and the tool says nothing about how you would feel during a drop or whether you could leave the money alone. Those things matter in real life and fall outside a calculation of this kind. Use the figures to see how time and timing interact, not to decide what to do.
Questions about timing
Is investing everything at once always better?
In this calculation, yes, because the return is constant and positive: money that goes in earlier has more time to grow, as the €557 gap in the first example shows. Real markets rise and fall, so the order of returns decides which way ends higher. The tool shows how big the head start is, not what will happen.
What happens to money that is waiting to be invested?
In the calculation it earns nothing. That is why spreading a sum over 12 months ends lower in the example: part of the money sits idle for a while. If you earn interest on the waiting money in real life, the gap would be smaller.
Why does starting five years later cost so much more than five years of deposits?
Because the missing years are the last and largest ones. In the second example you put in €12,000 less, but end €59,956 lower: the early deposits have the longest time to grow, and the later starter has none of that time for them.
Further reading: