Passive investing.
In plain English
Passive investing is a strategy of owning the whole market through an index fund or ETF and leaving it alone, rather than trading in and out or paying someone to pick stocks. The idea rests on a stubborn fact: most active managers fail to beat a simple index after their fees, so matching the market cheaply tends to win over decades. Passive investors accept the market's return, no more and no less, and keep costs and taxes low by trading rarely. It is the default approach behind target-date funds and most workplace retirement menus.
01Why it matters
Low costs and staying invested are two of the few things you actually control, and passive investing is built around both.
02The math, step by step
Instead of buying ten individual stocks, you buy one total-market index fund that holds thousands of companies for a fee of about 0.03 percent a year, and you add to it every payday.
03What this is NOT
Passive investing is NOT the same as being careless. You still choose your funds, your savings rate, and your mix of stocks and bonds; you just stop trying to beat the market.