Timothy B. Lee -- Writer with Ars Technica and the Cato Institute
Farhad Manjoo gives Slate readers advice on "how to stop investing your money like an idiot." He lucidly explains the principles of good investing, but then says that "for people who have extra money but not a lot of time or facility with investing, there has never been a simple way to invest in the rigorous, disciplined way that experts advise." Manjoo is far from the first writer to make this claim (and I'm kind of a broken record on the subject), but this isn't true. Vanguard has had funds that do exactly that since 2003, and they're significantly cheaper than the options Manjoo discusses in his article.
Manjoo reviews three options, and the one option Manjoo ultimately recommends, called Betterment, is pretty good. You tell Betterment how you want to allocate your money between relatively risky assets (like stocks) and relatively safe ones (like Treasury bonds). Betterment then automatically buys a mix of assets that fit your criteria and automatically adjusts them over time.
It's a great service, with one major weakness: the cost. Betterment itself charges between 0.15 percent and 0.35 percent of your money to help you decide which funds to buy, and the underlying funds Betterment buys, called ETFs, cost another 0.19 percent, on average. For example, if you invest $50,000 with Betterment, the annual costs will be around 0.44 percent, or about $220. That's pretty good. Many mutual funds have "expense ratios" around 1 percent, so you can save hundreds of dollars each year in fees--and end up with thousands of dollars more at retirement--by transferring your money from a higher-cost fund to Betterment.