Why drip feeding (or dollar cost averaging) is often best
Example: Non-employees depositing $87 a month into KiwiSaver
- You don’t forget it!
- Easier to budget
- Probable better return in KiwiSaver than in bank
- Most importantly — spread your contributions out.
- Dollar cost averaging in other situations: employees in KiwiSaver, other savings, moving from one risk level to another, moving money between countries
- What about when you have a lump sum to deposit?
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Mary Holm, ONZM, is a freelance journalist, a seminar presenter and a bestselling author on personal finance. She is a director of Financial Services Complaints Ltd (FSCL) and a former director of the Financial Markets Authority. Her opinions are personal, and do not reflect the position of any organisation in which she holds office. Mary’s advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following it.