When I first started teaching my daughter about investing, she was in Primary 3 (around 9 years old). It took me three years to finally convince her to put her own money into the market. Fast forward to today, she’s in Primary 6 (12 years old), and proudly owns her first investment — a low-cost S&P 500 index fund called SPLG.

What’s remarkable is that with just US$156, she bought 3 shares at about US$47 each — giving her ownership in 500 of the largest companies in the U.S. Imagine that: a 12-year-old owning a slice of some of the most powerful businesses in the world.

Here’s the kicker: this simple, low-cost index fund has historically delivered about a 10%+ annualised return, including dividends reinvested. That performance beats over 90% of actively managed funds run by professional fund managers and analysts who spend their days trying to pick winning stocks.

How is that possible? Because:

• The market rewards patience and long-term growth
• The fund spreads risk by owning hundreds of companies, reducing volatility
• Low fees means more money stays invested and compounds

Even during bear markets — which historically last less than 2 years — patient investors are rewarded when the market rebounds with a bull run that typically lasts 3 to 4 times longer.

My daughter’s investment also pays dividends: about US$0.20 per share per quarter. That’s about US$2.40 per year from her three shares — enough for a bubble tea or even a McDonald’s breakfast as she grows!

I help her “top up” her investment every six months using simple strategies like dollar-cost averaging or value investing principles. By the time she’s 20, she will have benefited from nearly a decade of compounding returns.

The real value isn’t in the money itself but in planting the seed of investing early. Teaching kids (and ourselves) to understand that money works best when it grows over time by investing in solid businesses — not by working tirelessly for every dollar.

Many adults hesitate to start investing because they believe it requires lots of money or is too risky. Banks prefer this mindset: they want us to save money with them, paying minimal interest, so they can lend out our deposits and make huge profits.

But investing smartly and simply — avoiding speculation — is the path to building wealth and financial independence.

To help you begin, I’m giving Limited Time Access to a Done-For-You Company Analysis of a fast-growth U.S. company, worth $307 — free for 14 days. Plus, get our Mental Model of Super Investors online course and a guide to using the Interactive Brokers platform.

Click below to start learning how to invest smartly — just like my daughter!