How My Dad Taught Me the Compounding Returns of Fatherhood

David Booth and his dad show off their catch after a day of fishing.

(Image credit: Courtesy of David Booth)

published 12 June 2025

Parents intuitively understand the concept of compounding, even if they've never heard the term. Every bedtime story, every patient explanation, every small act of love — they can all add up over decades to contribute to who our children become.

My dad taught me this without ever saying it directly. When I was heading to graduate school at the University of Chicago, he surprised me with a fire-engine red Plymouth Valiant convertible. I was thrilled. What 22-year-old wouldn't be?

Decades later and toward the end of his life, Dad shared a secret: He actually bought that convertible for my mother. She’d always dreamed of having a red convertible. But when I came home that day, so excited to see "my" new car, Mom whispered to him, "Oh, let's just let him have it."

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That moment captures so much about being a parent — the plans you make, the sacrifices you don't mention, the joy you find in your children's happiness compounding into something greater than your own desires.

How parenting is like investing

As both a father and a grandfather, I've learned that parenting humbles you the same way markets do. You think you have a model in your head — how you'll handle tantrums, teach life lessons, shape character. Then reality hits.

In the minutes before naptime, you may have about as much control over a determined 2-year-old as you do over the S&P 500. Sometimes that nap never happens. Sometimes the market drops and keeps dropping.

But here's what both investing and fatherhood have taught me: Judge yourself by the quality of your decisions, not just the outcomes. So many things lie outside our control.

Values that carry on

Now I watch my own children at the start of their journey, navigating these same challenges with my grandchildren, and I see my parents' values carrying on into another generation.

David Booth with his own child. — David Booth with his own child many years ago.

The patience they show, the sacrifices they make without fuss, the joy they find in their children's happiness — it's the red convertible moment playing out again and again.

In a conversation with my father later in his life, I asked if he had any regrets. He said simply, "I always wished I could have helped you more."

I was stunned. He'd given me everything — including values that have compounded through my entire life. His integrity, his quiet sacrifices, his belief that education could change our family's trajectory — these small daily decisions shaped who I’ve become.

The irony is that Dad did help me more than he ever knew. That convertible wasn't just transportation — it was a lesson in generosity I'd carry forward. Any time I’ve had the chance to help someone early in their career, I amplified what Dad and my mom taught me.

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And now I see that same generosity in my children — proof that the best investments can grow across generations.

This Father’s Day, let's celebrate all the fathers, stepfathers and father figures whose small acts of love snowball into lasting impact.

David Booth and his dad back in the day.

To my fellow dads navigating the beautiful chaos of parenting: Trust the process. Your children may not remember every bedtime story, but they and their children may carry forward some of the patience, love and values you're investing in them today.

Happy Father's Day to all who understand that love, like returns, compounds most powerfully over time.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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David Booth is Chairman of Dimensional Fund Advisors, a firm he founded in 1981. Under David’s leadership, Dimensional has grown from a fledgling business operating out of the spare room of his Brooklyn brownstone apartment to a global investment manager with more than 1,600 employees and $786 billion in assets under management (as of March 31, 2025). David led Dimensional as CEO and later Co-CEO until 2017, when he stepped back from the daily management of the firm. He remains closely involved in strategic initiatives at Dimensional.