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George! It's time, Jade. For our long-running segment, talk nerdy to me.

Hit me with that jingle. Here is the nerd topic of the day that I'm going to break down

in less than two minutes to help people out there understand it. These $10 words out there that

bother me when they're thrown out like jargon, but they're important. Today's word or phrase, dollar cost averaging.

You'll DCA, as they call it in the biz. No one calls it that but nerds. I just want you to know that.

Yeah, Instagram nerds. This is dollar cost averaging is an investment strategy to save for retirement.

It's this simple. It means you're making regular investments over time, regardless of what the stock market is doing. Yeah. I don't feel like it even needs a term. Why do we need a fancy name for that? It's focused on the consistent dollar amount you invest. As opposed to dropping a lump sum every once in a while. Yeah, a regular amounts or a lump sum once a year. So we recommend dollar cost averaging for your long-term investing because the longer your money stays in one place, the more it's going to grow. And investing consistently over time in one place, that's how you beat the market fluctuations. So if you're scared of the roller coaster, this one's for you. I also think it helps build a nice habit, right? You're building the habit of investing when you say, okay, every month, this is automatically coming out. I know what the amount is. I mean, we say 15%. And then you live,

you live on less. When you know 500 bucks is going out of your account, you just tend to live

knowing. After a while, you don't think about it. Yeah, exactly. That's side out of mind. So if you put, let's say, $500 a month into your 401k or an IRA every month, you're

essentially buying shares of the mutual funds.

That's what you're doing with that $500.

But remember, the value of those funds could go up or down each month.

So sometimes, some months, that $500 goes a long way.

It goes farther because the prices are down.

Stock goes down. That means you're buying it on sale. Think of it that way. Price goes up.

You're buying it at a more expensive rate. But again, your dollar cost averaging. So think of it like your gas tank.

Some months, your 200 bucks, you budget it for fuel, gets you 60 gallons. But the price per gallon drops.

The same 200 stretches further.

You get an extra 10 gallons.

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