The standing order

You have decided to invest. One question is left, and nobody really settles it: when?

The standing order answers differently. The same amount, every month. One hundred and fifty euros.

Twelve times a year, on the same day, with nothing to decide.

Four months, four prices. One hundred euros, eighty, one hundred and twenty-five, one hundred.

Average quoted price over the period: one hundred and one euros twenty-five.

That is not what you paid. And the gap comes from no trick at all.

Each month, one hundred and fifty euros buy what they can. One and a half units, then almost two.

After four months: six units and seventy-five thousandths, for six hundred euros.

Ninety-eight euros seventy-seven, against the one hundred and one twenty-five quoted.

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Two euros forty-eight less per unit. Two point four five per cent.

The reason is dull: the same amount buys more units when the price is low, and fewer when it is high.

The quoted price is an average of prices. Yours is an average weighted by quantities.

It is not a technique. It is arithmetic, and it always leans the same way.

Now the other half of the subject. What is left at the end of the month is what was not spent.

The transfer goes out the day after payday. Before the groceries, before everything else.

Twelve decisions a year become none.

That is not discipline. It is the absence of any chance to get it wrong.

What is left is what the standing order does not do. A market that falls four months running.

One hundred, ninety, eighty, seventy.

You still paid in six hundred euros, one hundred and fifty a month.

Five hundred and two euros ninety-two. Sixteen per cent less.

Paid in all at once in month one, the same money was worth four hundred and twenty euros. Thirty per cent less.

The standing order cushions a fall. It does not protect you from one.

And one last thing, which is awkward. If you already hold the money, spreading it out costs a little on average.

Markets rise more often than they fall. Waiting outside has a price too.

The standing order is not a trick. It is simply the shape your salary already has.