That's it really! My DS3 (age 3) has been listening to his older brother(age 6) who has been using swear words. We've told (and keep telling him off) the older one off, but today in the bath, ds3 pointed to his bottom and said in a very clear voice "ass-hole".
Normally it takes him a few goes to pick up a new word... But swearing, he picks up at lightning speed! 
I want to encourage his speaking, but want to discourage the swear words.
Any ideas?