Teaching Children About Investing
What is another important point to teach children so they may begin to understand some basic principles of investing?
Bogle suggests teaching and showing a child the value that is created simply by compounding interest. He uses the example of a $10 investment, earning only 7% interest, that will double in ten years. He also suggests opening an investment account with your child’s saved money, and purchasing an index fund. This index fund and its performance can teach your child how an investment may grow (or not) over time.