The age-old argument in the investing world is about which type of mutual fund is a better investment: Are index funds, which are “passively managed” according to computer models better than all other mutual funds, which are “actively managed” by humans?

If you ask five experts, you may end up with six opinions. So, when the so-called experts can’t agree, where does that leave you? If you want to start investing, it leaves you with having to choose one or the other anyway. Here’s help: You can essentially separate your comparison into three main categories: philosophical, practical, and gut feeling. (Don’t expect to see this type of analysis anywhere else; but to me, there’s no better way to decide.)

The philosophical approach: Human vs. machine

Where do you stand, philosophically, in the social discussion of a world in which computer-driven machines continue to replace the work of humans?

If you root for humans over machines, you should probably favor “actively managed” funds where real humans use their experience, smarts, and savvy to try making money. Sometimes, these money managers will make brilliant decisions, and sometimes they’ll wish they could crawl into a hole and hide. But, hey, that’s being human.

If you’re psyched for a time when the world runs on techno, you’ll probably favor computer-driven index funds. An index is a collection of specific stocks or bonds that the industry uses as a benchmark for investors (like mutual funds) to measure how their performance stacks up against the “overall market segment” performance. Quick example: managers of actively managed funds investing in international stocks will use the EAFE index as their measuring stick and try to beat it.

The people running an EAFE index fund, however, only want to mirror the performance of the EAFE index, not beat it. Their job is less labor intensive; they buy and sell every day based strictly on the results of their computer model.

Me? I’m a humanist who’d love to see people running our world instead of machines, most of the time. So at this point, I’m checking the “human” box on my ledger.

Practical approach: Cost vs. benefit

First, let’s compare the costs of investing in one type of fund or the other, because there’s a clear winner. Index funds cost less than actively managed funds, hands-down. Actively managed funds, run by one or more humans, charge, on average, 1.5 percent of the value of your money in the fund. Index funds, relying on computer models (that don’t need salaries) charge, on average, about 0.2 percent of the value of your money in the fund.

In investing, cost plays a critical role in performance results (how much you make) that can’t be taken lightly.

Consider this:

Costs are like digging holes. Paying fees to a mutual fund to invest your money is like digging holes you need to fill before you can get back up to ground level and start growing your money. Check out this comparative illustration of the impact fees have on how much you can earn over the course of 15 years:

If you invest for this every year for many years at this cost, at this annual return you’ll have this much:

Amount invested each year