Charles Schwab's daughter shares the investing advice her father gave her in her 20s

Charles R. Schwab opened the doors of his San Francisco-based brokerage company, Charles Schwab Corporation, in 1971.

The company didn't take off right away.

"My dad was a struggling businessman really until my mid-20s," his daughter Carrie Schwab-Pomerantz told Business Insider. "I was 14 when he started Schwab, but it didn't really become the company people know until well into my 20s, when it was sold to Bank of America [in 1983]."

Right around the time the firm started taking off - today, it has $2.56 trillion in client assets and Charles Schwab himself has an estimated net worth of $6.2 billion - Carrie Schwab-Pomerantz was a typical 20-something, unsure how to invest her money.

"When I opened up my first IRA [individual retirement account], I asked him for advice," she tells Business Insider. "He said, 'Pick a mutual fund - pick a couple - and you'll be fine. Just participate in the market.'"

A mutual fund is a collection of securities like stocks and bonds. Funds are very diverse, typically owning hundreds of different stocks, which means your risk is spread out. With a mutual fund or funds, if one investment should go into decline, it won't necessarily tank your entire portfolio.

"He really believes in making investing simple," Schwab-Pomerantz, now a certified financial planner and author of "The Charles Schwab Guide to Finances After Fifty," tells Business Insider. "He's never trying to pick the hot stock. He's all about diversification and participating in the markets."

Experts such as Warren Buffett, John Bogle, and Charlie Munger agree that low cost index funds (a type of mutual fund pegged to a specific market index) are the best way for the average person to invest.

"A low-cost index fund is the most sensible equity investment for the great majority of investors," Buffett told Bogle in "The Little Book of Common Sense Investing." "By periodically investing in an index fund, the know-nothing investor can actually out-perform most investment professionals."

One option for investors looking to follow the advice of the pros is to open an account online with Bogle's company, Vanguard, and invest in their index funds, which charge relatively low fees (an average of 0.13%). Charles Schwab Corporation also offers index funds with relatively low fees.