Set it and forget it investing should actually be simple enough to forget. Our normal Simple Finance Bytes portfolio uses just two investments—90% VTI and 10% VBIL—but even that requires some basic portfolio management. If you want the absolute simplest setup we would recommend, there is another option: one low-cost target-date fund for your long-term investments and a competitive high-yield savings account for your safe, liquid money.
Simple: VTI + VBIL.
Simplest: target-date fund + HYSA.
The point is not that one is universally better. The point is choosing how much management you actually want in your financial life.
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Our Normal Simple Investing Setup Is Already Simple
Our preferred investing system remains 90% VTI and 10% VBIL for someone comfortable maintaining a basic two-fund portfolio.
That gives you broad stock-market exposure, a short-duration Treasury sleeve, and a straightforward allocation you can understand and rebalance occasionally. For most people, that is already simple.
But some people want even less to manage.
They do not want to think about rebalancing. They do not want to decide whether their stock and bond percentages are still correct. They do not want investing to become another hobby.
That is where the ultra-simple version comes in.
The Simplest Set It and Forget It Investing Setup
One Target-Date Fund for Long-Term Investing
A low-cost target-date fund can handle most of the investment work for you.
You choose a fund built around roughly when you expect to retire. The fund owns a diversified mix of investments, rebalances internally, and gradually becomes more conservative as that date approaches.
That means your 401(k), Roth IRA, or other long-term investment account can potentially contain one fund instead of a collection of ETFs.
Then automate your contributions and leave it alone.
We have covered target-date funds in more detail before, so there is no need to turn this into another target-date-fund tutorial. The important point is that they exist for investors who want a diversified portfolio without managing all the pieces themselves.
Some of our favorite target-date fund families are Vanguard Target Retirement Funds, Fidelity Freedom Index Funds, Schwab Target Index Funds, and BlackRock LifePath Index Funds. We like these because they are broadly diversified, automatically rebalance, and are built specifically for investors who want one fund to handle the portfolio for them. Vanguard and Schwab are especially attractive for their very low costs—both currently run around 0.08% for their index target-date families—while Fidelity’s Freedom Index series is also inexpensive at about 0.12%. The specific fund year should match roughly when you expect to retire, but the bigger point is to choose a low-cost, diversified target-date fund and then leave it alone.
Keep About 10% in a Good HYSA
For the safe and liquid side of this ultra-simple system, we would target a competitive HYSA at roughly 10% of the value of your long-term investment portfolio.
If you have $100,000 invested, that would mean roughly $10,000 in the HYSA.
At $500,000 invested, roughly $50,000.
At $1 million invested, roughly $100,000.
This is a Simple Finance guideline, not an industry rule. The goal is to give the hands-off investor an easy reserve target without adding another investment product to manage.
The HYSA stays easy to understand, easy to access, and eligible deposits at an FDIC-insured bank receive federal deposit insurance within applicable limits.
What You Give Up for Simplicity
This setup is not perfectly optimized, and that is the point.
A target-date fund gives you less control over the exact allocation than managing VTI and VBIL yourself. It will also typically become more conservative over time.
A HYSA may pay somewhat less than another short-term cash or Treasury option at different points in the rate cycle. Bank interest can also be less tax-efficient than qualifying Treasury interest for someone living in a state with income tax.
You are accepting some potential return and tax-efficiency tradeoffs.
That does not automatically make the decision wrong.
Not every dollar needs to be perfectly optimized.
If a small amount of inefficiency buys you a financial system you can automate, understand, and leave alone for decades, that can be money well spent.
Why the HYSA Can Be Worth the Tradeoff
The HYSA has one major advantage in this version of the system: simplicity.
You know what it is. You know where the money is. You can move it when you need it. There is no ETF to buy, no money-market fund to understand, and no bond allocation to rebalance yourself.
There is also the FDIC protection.
The standard FDIC insurance amount is $250,000 per depositor, per insured bank, per ownership category. As your HYSA balance approaches the applicable limit for your situation, stop and reassess rather than blindly continuing to pile cash into the same account.
At a 10% target, most households would need a very substantial investment portfolio before that becomes an immediate problem.
Where Should You Keep Everything?
The simplest investing system does not mean putting every dollar at one company.
Preferred: Two Clean Institutions
Our preferred setup uses one institution for long-term investing and another for banking and your HYSA.
Fidelity, Schwab, Vanguard, Robinhood, or your workplace 401(k) provider can handle the investment side. A bank such as Capital One, Ally, SoFi, or another strong online bank can handle checking, everyday banking, and the HYSA.
That keeps the system simple while avoiding a single point of failure.
Mixed: Banking and Investing Together, HYSA Elsewhere
You can also keep banking and investing together at one institution while placing the HYSA somewhere else.
For example, someone could use Chase for checking and a Roth IRA while keeping reserve cash at a separate HYSA provider such as American Express.
That separate cash relationship gives you another place to access money if your primary banking relationship becomes temporarily unavailable.
All-in-One: Possible, but Not Our Preference
Some institutions like Robinhood can handle nearly everything under one login. That is convenient, but it also concentrates your financial access in one place.
We prefer redundancy over maximum consolidation.
Simple vs. Simplest
If managing two funds does not bother you, our preferred system remains 90% VTI and 10% VBIL.
If you want as little investment management as possible, use a low-cost target-date fund for long-term investing and keep roughly 10% in a competitive HYSA.
Neither approach requires stock picking, market timing, or constantly reacting to financial news.
That is the larger point.
Money does not need to become your hobby.
Choose the level of simplicity you can maintain, automate it, keep contributing, and stop tinkering.
Have a question about setting up your own version? Send us a DM, leave a comment on one of our social posts, or email [email protected]. Good questions may become future articles or podcast episodes.
And if you want to see how investing fits with the rest of your finances, the free Simple Finance System Blueprint shows how budgeting, banking, debt, emergency savings, and investing work together in one system.
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