Overview
Investing consistently over time - also known as dollar-cost averaging - is a strategy where regular contributions are made regardless of price (for instance into investment assets like shares or ETFs).
What you’ll need to enter
Initial Investment – Year 1
Specify how much you plan to invest in the first year of the investing (At the moment we require this to be an annual figure so if you're thinking of investing say $833 a month, you'll need to put in $10,000).
Ongoing Investment
Yearly Contribution: Enter the amount you plan to invest annually (e.g., $10,000 per year).
Number of Years in Effect: Choose how many years the recurring contribution should continue.
Asset Details
Nickname: Give your investment a name (e.g., “Shares” or “ETFs”).
Owner: Select who owns the investment.
Growth Rate: The expected annual return (capital growth) on your investment. For example:
🇦🇺 Australian shares ~9% p.a.
🇺🇸 US shares ~11% p.a.
Dividend (Yield) Rate: If your asset pays dividends, enter the percentage yield here. This will be treated as taxable income.
💡 Note: Past performance is not a guarantee of future returns. Investing always carries risk.
Adjust for Inflation
At the bottom of the event form, you can optionally toggle on "Adjust for inflation". This:
Adjusts all projected investment amounts using a 2.5% per annum inflation rate.
Planning Intent: Growth Targets First, Specific Instruments Second
The intent of this event is to support planning for the future growth of your investments - less about choosing specific investment products, and more about setting a target return that reflects your overall strategy.
Rather than saying “I’m investing in VAS, A200 or CBA,” you're typically modeling something like:
“I’m aiming for the kind of long-term returns I’d expect from Australian shares say, around 9% p.a. or 5% pa growth and 4% dividends”
That means you're thinking more like a portfolio manager: setting an expected growth rate based on asset class (e.g. Aussie shares, global equities) and using that to see how regular contributions compound over time.
That said, its YOUR plan - and you can absolutely use this event to represent a specific ETF or stock if you want to. You might name the asset "VAS", "A200", or "CBA", and tailor the growth and yield rates to match your expectations for that instrument (we're not recommending any particular investment here - these are just examples to help you build and track your plan). Just keep in mind those are implementation tools - the vehicle you’re using to aim for your target return - not the focus of the plan itself.
Whenever you come back to review your plan and how you're tracking, you'll be able to compare actual progress against your original assumptions. If performance has fallen short of your target return it might prompt you to review.
But keep in mind some wise words from the Long Game Legends - Warren Buffett and Charlie Munger.
“If you’re not willing to own a stock for ten years, don’t even think about owning it for ten minutes.”
- Warren Buffett
“The big money is not in the buying or the selling, but in the waiting.”
- Charlie Munger
“The first rule of compounding is to never interrupt it unnecessarily.”
- Charlie Munger
⚠️ Disclaimer:
This information is factual in nature and provided to support your use of the modelling tool. It is not financial advice and does not consider your personal circumstances. You should speak to a licensed financial adviser before making any financial decisions.