Been talking about this for awhile.. but the impact and the time factor are so amazingly huge, that it cannot be understated.
People talk about how hard it is to make money and how hard it is to find the right fund, etc..etc.. it really isn’t that hard at all… all you have to do is pick a good fund, and buy it every month no matter what price it is!
I have attached and created a spreadsheet which you can feel free to download and play with.
Take a look at the following.. by making monthly EQUAL payments of a stock which started, and ended.. at the exact same price… we’ve made just over 30% over the year.
These numbers are ficticious.. but they could very easily be real numbers… especially the way the markets are right now.
So we’ve made over 30% this year.. Wanna know what would happen if we did this every single year? Say.. we cashed out the money on January 1st and started over? Every year obtaining the same 30%? Hmm.. in 10 Years, that same 1200 we started with.. would be worth over $16,000! How about your retirement fund? Without adding ANY other money, if you were 30 right now.. by the time you’re 55.. you’d have $2.5 million dollars.. all from the $1200 you started with 25 years earlier.
Ok.. obviously a few problems with this scenario. A) 30% seems like a huge number to make year after year after year.. and it’s true, it is.. however does that scenario not seem very likely to you? Or perhaps some sort of variation? Hell.. what if those shares shot up to $20 at the end of the year? Well.. if you cashed them all in, and did something like that again..for 25 years.. well. You’d have to pay some serious taxes.. on $527,604,895,571,127.00! (Yes.. that’s what 25 years of 152% gains will do for ya 
. B) This does not include commissions.. which are generally anywhere from $5 to $30 a trade! (I pay $5). C) And this is a good thing, this doesn’t include dividends.. on our example even if our company paid $0.50 a year in dividends.. it would more than make up for the amount we paid in commissions over time.
Seriously, this isn’t rocket science.. dollar cost averaging and compounding interest are the two biggest financial assets on our side. And if used properly.. extreme wealth can be had. I’m just starting to realize this, and it makes me extremely excited about it. Especially when you watch the markets.. and you know you have a good company.. and you are cheering when the stock goes down because you get your stock cheaper!
The only thing you have to do is keep on top of the action as far as your companies go.. make sure they are still making money, paying dividends (which this chart also doesn’t include btw) and you should be just fine.
Feel free to download and play with the simple spreadsheet I created here; Yearly Dollar Cost Averaging Example. Or if you don’t have Excel.. feel free to play around with the online version here at Google Docs.