Lump sum.
In plain English
A lump sum is money that arrives or goes in as one big payment instead of a stream of smaller ones. In investing, the lump-sum question is whether to put a windfall to work all at once or to spread it out over months, an approach called dollar-cost averaging. History says investing a lump sum right away usually beats spreading it out, because markets rise more often than they fall, but spreading it out can be easier to stomach. The word also shows up in pensions, where you may take a lump sum instead of monthly payments.
01Why it matters
How you deploy a lump sum, all at once or over time, changes both your expected return and how a bad first month would feel.
02The math, step by step
You inherit 30,000 dollars. Investing it as a lump sum means buying in today; dollar-cost averaging means investing, say, 5,000 dollars a month for six months instead.
03What this is NOT
A lump sum is NOT dollar-cost averaging. A lump sum goes in all at once; dollar-cost averaging deliberately spreads the same money across several purchases over time.