Comments on: Dollar Cost Averaging vs Lump Sum Investing (What to Do With a Pile of Cash)

By: Joel

Joel — Fri, 12 Mar 2021 05:39:03 +0000

In reply to jen. Haha! Great to hear you know your feelings so well and play to your strengths. Self awareness is super important :). Have a great weekend!

By: jen

jen — Thu, 11 Mar 2021 17:08:36 +0000

In reply to Joel. Yes, home interest rates are super low. Honestly, would rather buy something cash that is cheap and not worry about owing anyone money. We saved 100k cash by 2017 without that money we would have never bought the house we did in 2017. We would have probably bought something already fixed up with a VA loan (paying a what 5% fee?). Instead we bought a house put 20% down so we didn't have to pay PMI put the other 50k into the house to fix it up and sold it in 2020 for double our investment. Without that cash I would have never took the risk on that house. So much of finance is mental we all have different thresholds and I lean pretty conservatively. I need to sleep at night. I am a planner and a worrier.

By: Joel

Joel — Wed, 10 Mar 2021 14:23:03 +0000

In reply to Bashy. Cheers and have an awesome week!

By: Bashy

Bashy — Wed, 10 Mar 2021 10:50:35 +0000

Wow! nice advice. Keep on sharing with us I like this blog.

By: Joel

Joel — Wed, 10 Mar 2021 02:16:08 +0000

In reply to Jen.

Cash is king in real estate. (but it’s also a great time to borrow money with low interest rates).

Good luck Jen, and I can definitely relate that it’s not an easy decision!

By: Jen

Jen — Wed, 10 Mar 2021 01:49:52 +0000

I’m in this boat with $200k plus cash most of it in 2.23% cds. Its not easy dumping that kind of money in the stock market. I’m hoping our next move will be a place we can afford to buy a house with cash.

By: Joel

Joel — Tue, 09 Mar 2021 14:24:26 +0000

In reply to David @ Filled With Money.

Cheers David! Well it’s important to note that lump sum investing is only applicable if you actually have a lump sum. Inheritance, stimulus check you don’t need, big commission check, windfall of some sort, etc… (or in my friend’s case, hoarding). But if you don’t have a lump sum, there is no comparison and dollar cost averaging is the way to go :)

By: Joel

Joel — Tue, 09 Mar 2021 14:19:02 +0000

In reply to Martinus. Well thanks Martinus! But I can only count it as a success if my friend actually invests her money soon. :)

By: Martinus

Martinus — Tue, 09 Mar 2021 14:10:27 +0000

This was a terrific article. Perhaps your best to date. Well done.

By: David @ Filled With Money

David @ Filled With Money — Tue, 09 Mar 2021 03:11:00 +0000

This was one of the most data driven and interesting articles that breaks down dollar cost averaging vs lump sum investing. When I read personal finance articles that relate to investing, I read so much about how important it is to dollar cost average and how it can make you rich.

They never actually dive into a statistical analysis of what percentage of the time when you actually do win. At a 72% win rate, I’ll take it!

Like many others though, I wish I had $200,000 in cash just laying around of which I can invest with :)