The Target Date Fund
One boring, automatically-diversified fund picked by your retirement year
- Difficulty
- Starter
- Time to result
- ~ongoing to results
- Steps
- 3
- Confidence
- 93%
Sethi's simplest investing advice for anyone starting out: buy a single target date fund named for the year you'll retire (e.g. a 2065 fund). It's one fund that owns hundreds of stocks and bonds, automatically diversified, and it grows more conservative as you age. All you do is set money to flow in every month. No stock-picking, no genius required — investing should be as boring as watching paint dry.
Origin
It's the advice Sethi gives his own family, chosen for its radical simplicity over app-based trading that gamifies investing.
Core principles
- 01One fund, chosen by retirement year, is automatically diversified and self-adjusting.
- 02Traders lose money; investors treat investing like watching paint dry.
- 03Keep costs low — a 1% fee takes 28% of lifetime returns; 2% takes over 55%.
- 04Check it every 3-6 months on desktop, never tweak it — like a turkey in the oven.
How to run it
- 1
Open a low-cost brokerage account
Use a low-cost brokerage (Vanguard, Fidelity, Schwab, or a local equivalent).
Pro tip Avoid apps that gamify and push you to trade; ugly and inaccessible is better.
- 2
Buy the target date fund for your retirement year
Pick the single fund matching the year you'll turn ~65 and put your money into it.
- 3
Keep costs low and leave it alone
Prioritise low fees and let it compound; check only every 3-6 months on desktop.
Pro tip 1% in fees quietly removes 28% of your lifetime returns — the calculator proves it.
Watch out Don't fiddle — like a cooking turkey, opening the oven only messes it up.
In the wild
A seemingly trivial 1% advisor fee compounds to take 28% of lifetime returns; on a $1M gain that's $280,000.
→ Sethi's rule: money is counterintuitive — paying more gets you worse returns, not better.
Common mistakes
Trading instead of investing
Gamified apps turn people into traders who lose money; investing should be boring and automatic.
Is it for you?
Best for
Beginners who want to start investing without learning stock selection.
Not ideal for
Sophisticated investors deliberately building a custom, actively-managed portfolio.
From the transcript
“the simplest way that I advise my family is I say get a target date fund”
“investors treat investing like watching paint dry”
From the episode
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Ramit Sethi