DCA and Compounding
The mathematics of "Boring" wealth generation.
The Power of Compounding
What is DCA?
Dollar-Cost Averaging (DCA) is the practice of investing a fixed dollar amount on a regular schedule, regardless of the share price.
- Market High? You buy fewer tokens.
- Market Low? You buy more tokens.
- Result: You lower your average cost per token over time and remove emotion from investing.
The Compounding Effect
When you combine DCA with a steady yield (like our target 7-9%), the results over time are non-linear.
The Scenario
- Monthly Deposit: $1,000
- Target APY: 7%
- Duration: 20 Years
The Result
| Metric | Value |
|---|---|
| Total Deposited | $240,000 |
| Interest Earned | $283,965 |
| Total Value | $523,965 |
20-Year Growth Trajectory
$524k$262k$0
Year 1, $13k
Year 2, $26k
Year 3, $40k
Year 4, $56k
Year 5, $72k
5
Year 6, $90k
Year 7, $108k
Year 8, $129k
Year 9, $151k
Year 10, $174k
10
Year 11, $199k
Year 12, $226k
Year 13, $255k
Year 14, $286k
Year 15, $319k
15
Year 16, $354k
Year 17, $392k
Year 18, $433k
Year 19, $477k
Year 20, $524k
20
The Magic
After 20 years, you have earned more in interest ($284k) than you actually deposited ($240k). Your money is working harder than you are.
Why Consistency Wins
Most investors fail because they try to time the market. They buy when everyone is euphoric (high prices) and sell when everyone is panicked (low prices).
The Wise Owl Strategy:
- Set a monthly deposit.
- Put it in a steady yield vault.
- Go live your life.