Devoted to understanding the basics and fundamentals of investing

Jason wrote this comment.  I liked it so much I wanted to share it with everyone.

When my father helped me open my Roth IRA at the age of 16, I purchased two large cap mutual funds. Even though I had no idea what IRAs and mutual funds where, my dad kept telling me that "compounding is your best friend". Because of his wisdom, I have contributed to my IRAs every year since. (and boy have the results been nice!)

Throughout college, I was also fortunate enough to have an job with a 401K. Again, with the guidance from my dad, he explained what exactly a 401K was, how company matching was "free money", and why it was stupid not to take full advantage. (After graduation, I rolled-over 4 years of 401K contributions and earnings into a traditional IRA.)

This past year, I graduated from college, and my take on investing has changed from "something you are just supposed to do" to something I absolutely love and can't learn enough about. At the age of 23, my current portfolio is comprised of (low expense, no load!) mutual funds - approx. 90% stock/10% bonds.

The most important piece of advice I can give parents who are trying to teach their children about investing, is to lead by example. Make it fun for your kids. Even something as simple as paying them interest on their saved allowance will instill values.

Unfortunately, most young people my age (early twenties, fresh out of college) have absolutely no grasp on the importance of saving money, let alone investing. But, in the world of compounding, nothing beats time.