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How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn
Straightforward strategies from a successful young investorIn How a Second Grader Beats Wall Street, you'll follow the story of Kevin Roth, an eight-year-old who was schooled in simple approaches to sound investing by his father, seasoned financial planner Allan Roth, and discover exactly how simple it can be to become a successful investor. Page by page, you'll learn how to create a portfolio with the widest diversification and lowest costs; one that can move up your financial freedom by a decade and dramatically increase your spending rate during retirement. And all this can be accomplished by using some common sense techniques.Along the way, Kevin and his dad discuss fresh, new approaches to investing, and detail some tried-and-true, but lesser known approaches. They also take the time to debunk the financial myths and legends that many of us accept as true, and show you what it really takes to build long-term wealth with less risk.Discusses how to design a portfolio composed of a few basic building blocks that can be "tweaked" to fit your personal needsAddresses how you can reengineer your portfolio in order to stop needlessly paying taxesReveals how you can increase returns, regardless of which direction the market goes, by picking the "low-hanging fruit" we all have in our portfoliosWith just a little time and a little work, you can become a better investor. With this book as your guide, you'll discover how a simpler approach to today's markets can put you on the path to financial independence.
262 pages, Hardcover
First published March 9, 2009
104 people are currently reading
1102 people want to read
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Displaying 1 - 30 of 36 reviews
September 17, 2015
The advice is sound. I think this is a clever magazine article blown into a very dull book. The simple strategy is revealed early on and the rest is just explanation and elaboration. It's great advice for someone just starting out and interested in building a nest egg. Definitely not, as I had vaguely hoped, about teaching kids about investing.
March 27, 2016
In this book Roth explains how a long-term investor can practically own the entire market by buying a couple of total stock funds (US and International), plus a total bond fund to reduce risk, and beat almost any other fund manager on Wall Street in the long run. I am personally just getting started exploring the field of fund investing, and thankfully this book is easy enough for (yes, you guessed it) even a second-grader to understand.
Buy-and-hold strategies of passive index funds have become very popular recently for many of the reasons Roth lists in this book: low management costs, tax efficiencies and safer returns in the long run. I can't help thinking whether all these passive investors fall victims to the herd mentality bias they try to avoid - but that line of reasoning is a catch 22, so I'd rather set it aside.
The book is generally very accessible to beginner investors, but it gets more boring and opaque wherever it talks about taxes. No surprises there.. It is also too US-oriented, although, with a bit of research, the reader should be able to apply its lessons to one's location. The first three chapters of the book are certainly the most valuable, the rest covering more specialized aspects of fund investing and suggesting minor optimizations to the second-grader portfolio or alternative sources of return.
Overall, I feel that I got good value out of this book, despite the high noise-to-signal ratio. Equally importantly, it is written in a colloquial way, making it a rare finding for a book in this category.
Buy-and-hold strategies of passive index funds have become very popular recently for many of the reasons Roth lists in this book: low management costs, tax efficiencies and safer returns in the long run. I can't help thinking whether all these passive investors fall victims to the herd mentality bias they try to avoid - but that line of reasoning is a catch 22, so I'd rather set it aside.
The book is generally very accessible to beginner investors, but it gets more boring and opaque wherever it talks about taxes. No surprises there.. It is also too US-oriented, although, with a bit of research, the reader should be able to apply its lessons to one's location. The first three chapters of the book are certainly the most valuable, the rest covering more specialized aspects of fund investing and suggesting minor optimizations to the second-grader portfolio or alternative sources of return.
Overall, I feel that I got good value out of this book, despite the high noise-to-signal ratio. Equally importantly, it is written in a colloquial way, making it a rare finding for a book in this category.
November 2, 2021
interesting storytelling
I really liked his storytelling but the moral of the entire book is just to buy index funds. It covers a little on other things like tax savings and allocations and what not but for the most part it’s just drilling down on investing in index funds. Great storytelling tho, worth a read since it’s a short book.
I really liked his storytelling but the moral of the entire book is just to buy index funds. It covers a little on other things like tax savings and allocations and what not but for the most part it’s just drilling down on investing in index funds. Great storytelling tho, worth a read since it’s a short book.
June 9, 2019
4.5 Stars. I can't explain how revolutionary this book was in my way of thinking about investing. I started becoming interested after reading Robert Kiyosakis "Rich Dad, Poor Dad", but as you well know, inspiration isn't enough to tackle your financial goals. You need a plan. After countless articles, podcasts, and webinars on the "right investment tactic" I stumbled upon this book during a Facebook group chat with other budding investors. Turns out investing is incredibly simple, and even more simple than what Wall Street makes it out to be.
This literally a page turner every step of the way. It guides you through the basic rules of thumb of investing through the lessons that dad and financial planner Alan Roth teaches his 8-year old son Kevin. With a clever mix of dad jokes and real-world scenarios, Roth makes it easy for his readers to see why simple second grade arithmetic trumps the "hottest market fad" and why it is much easier, as a beginner, to follow the basics of investing rather than diving into complex securities, like hedge funds and annuities.
This book wasn't heavy on complicated lingo or mundane economic theory, just the plain English that you and I communicate with everyday, and I think that's what's missing from most financial books. As much as I wanted to get into a "The Intelligent Investor" or the "10 days to an MBA" none of this business/economic books were very inviting for someone with absolutely no clue where to put their savings. I have $1000 in savings sitting at a dismal 2% rate in my account, and I hope going forward I'll know how to put my future earnings to good use using this tactic. Thanks for a book that ACTUALLY Breaks it down for you! (And allows you to build your own financial plan)
Note: I actually recommend taking notes on this book, and copying the tables for investment portfolio plans it gives. While reading articles online can also be sufficient, it doesn't offer the 360 view of investing that this book does. Well written.
This literally a page turner every step of the way. It guides you through the basic rules of thumb of investing through the lessons that dad and financial planner Alan Roth teaches his 8-year old son Kevin. With a clever mix of dad jokes and real-world scenarios, Roth makes it easy for his readers to see why simple second grade arithmetic trumps the "hottest market fad" and why it is much easier, as a beginner, to follow the basics of investing rather than diving into complex securities, like hedge funds and annuities.
This book wasn't heavy on complicated lingo or mundane economic theory, just the plain English that you and I communicate with everyday, and I think that's what's missing from most financial books. As much as I wanted to get into a "The Intelligent Investor" or the "10 days to an MBA" none of this business/economic books were very inviting for someone with absolutely no clue where to put their savings. I have $1000 in savings sitting at a dismal 2% rate in my account, and I hope going forward I'll know how to put my future earnings to good use using this tactic. Thanks for a book that ACTUALLY Breaks it down for you! (And allows you to build your own financial plan)
Note: I actually recommend taking notes on this book, and copying the tables for investment portfolio plans it gives. While reading articles online can also be sufficient, it doesn't offer the 360 view of investing that this book does. Well written.
March 1, 2023
While the book could be repetitive, I learnt a lot about how to approach investing with the primary objective of keeping things simple. In fact, this is a book I will re-read in future to absorb the concepts and evaluate the arguments presented with a better understanding. Here are some notes:
- Don’t bet your lunch money == the money you will need in next 5-10 years should not be invested in stocks - only in fixed income risk free or low risk securities. Think bonds and fixed deposits.
- invest at least 10% of your portfolio in bonds. This will help in stabilization.
- Invest in international market - 1:2 ratio for international to local stock market
- rebalance periodically. Know very clearly your target allocation. This will achieve “sell high, buy low” over the long run. For this always do the selling in tax advantages accounts (401k, ira) so that you don’t have to pay the tax.
-
Money is merely a tool that we can use to buy things. That is it.
The author recommends us total stock market index fund over s&p 500 mainly because simplicity and diversification to include smaller companies in portfolio is better. S&P 500 in fact will always have lesser growth compared to total us stock index fund, at least in the good stock years, because S&P 500 includes only the BIG 500 companies and excludes all the medium and small cap companies. S&P 500 only includes the least risky stocks. This does mean that during rough years, s&p 500 may shrink less. However, to counter such bad years, one should invest in bonds and international stocks.
Value companies are the ones that are beaten up and are trading at lower valuations. Growth companies trade at a hefty premium. Core companies and between value and growth. You want to have 33% of each type of stock. S&P 500 does not achieve that, total stock market fund does.
The author recommends owning the total US BOND market index fund, but not the international bond market fund. Reason: bonds should be part of the portfolio to provide us a cushion so that our portfolio swings are controlled. Since the foreign currency swings can be huge, international bond markets can have huge swings - not a great cushion.
Us stock market is 45% of the total world market.
Second grader portfolio:
10% total bond market index fund - US
30% total international stock index fund
60% total us stock index fund
The above 10-30-60 is a high risk portfolio.
20-40-40 can be the medium risk.
70-10-20 can be the low risk.
Anchoring seems like an interesting mistake we make. If I buy a stock at $X, then in my mind I would always think - sell when the stock price is more than $X. However that is not the right approach. The decision to sell or hold should be based on whether the stock is undervalued or overvalued. If it’s overvalued you should sell, and hold if undervalued. Of course things are not that simple. It will also depend on what your needs are - are you in need of cash asap, trying to diversify, trying to invest more cash, etc.
Indexing three fund strategy is not simply to reap average growth. In fact, it performs better than a high% of portfolios in the long run. Eg over a 10 year period, each of the three funds performed better than more than two thirds of their peers. Without doing complex maths, you can understand that the total probability of a person picking three different stocks or funds each of which performs better than two thirds of their peers is much lesser. The author has oversimplified it and states that the three fund strategy would give you better performance than 96% of portfolios. May be that is true, May be it is not. But it does make sense that given the lack of financial expertise/time to pick winning stocks to invest heavily, indexing is definitely an overall superior strategy than most other strategies.
Alternate asset classes: beyond the three fund strategy, one could invest in asset classes that are negatively correlated with asset classes. By investing in them, you are ensuring that when market goes down, your investment in these asset classes will yield higher returns - overall reducing the risk. There two alternate asset classes - real estate and precious metals.
- author recommends to own REIT (real estate investment trust) INDEX FUND. Although one should do this only if following two conditions hold:
- the total stock market investment is bigger than the value of real estate holdings
- Investing for long term
One can invest upto 6% of the US stock market portion of the portfolio. Eg in second grader portfolio, one could invest 6% money in REIT and 54% (instead of 60%) in total US stock index fund.
Bonds in the order of quality (highest to lowest) and interest rate (lowest to highest)
Us government, municipalities, investment grade corporates, junk bonds (small companies).
The longer the maturity of the bond, the higher the risk and hence higher the yield the bond will offer. Why higher risk? Two reasons:
- the longer the time horizon, higher the chance that they will not be able to pay back
- Interest rate changes (especially any period of hyper inflation) will eat away the gains.
The author recommends that investing in 5 year bonds is the sweet spot.
Why does hyper inflation eat away the gains from the bond?
Let’s say I purchased a bond that will pay 5% at maturity. So I paid $1000 today and I will get $1050 on maturity. However in the meantime, if there came a period of high inflation during which the government hiked the interest rates, then I would not be able to use the same cash to buy the high interest rate bonds - opportunity cost. Of course, if I try to sell my old bonds to get cash, i will end up selling for less than $1000. So I’m the end, there is no way to avoid the loss.
CDs may not be taxed - check on this. They are a great way to park your cash. They are insured by FDIC AND NCUA upto $100k per individual and $200k per joint account. Smaller banks like credit unions can offer higher rate since they need the cash more. And since they are FDIC/NCUA insured, you need not worry about them going bankrupt.
How to pick the CD?
- rate of interest
- Is insured. Check the bank name on FDIC/NCUA website.
- Early withdrawal penalty. If it less than 6 months of interest, it is fine.
- never enable “auto renew”. You want to fish for best CD on maturity.
- Stay below insurance limits
The author makes an interesting point about allocation of funds in 401k account V non-401k. Traditionally people would buy stocks in 401k so that they can grow uninterrupted, and buy bonds in non-401k to have readily available money. However, author says that doing the opposite makes more sense, at least from tax point of view.
He says that for stocks: in 401k, you will pay tax at ordinary tax rate on withdrawal but pay the reduced long term capital gain tax rate in non-401k.
For bonds: in 401k, you will not pay any tax on the interest realized annually while pay that tax annually in non-401k.
The risk with having stocks in non-401k is: when you need cash, you will have to sell stocks and if the market is crashed at that time, then you are screwed. However, per author, you could sell stocks at the crashes rate in non-401k, sell bonds in 401k and buy the same stock in 401k.
My thoughts: this sounds fine but may not be so straightforward. Eg the tax rate in withdrawing money from 401k would be quite low. One thing is for sure - the tax rate on bonds in non-401k will be quite high.
STRATEGY: keep only that much bonds in non-401k as needed to cover unforeseen needs. Rest of the bonds should be in 401k so that we are not paying taxes and the interest on bonds compounds. The rest of 401k can be in target date funds. Finally, the stocks needed to satisfy the target allocation can be bought in non-401k.
Note: the compounding for stocks is the same between 401k and non-401k if we keep the stocks for long term. Compounding for bonds works better in 401k.
- Don’t bet your lunch money == the money you will need in next 5-10 years should not be invested in stocks - only in fixed income risk free or low risk securities. Think bonds and fixed deposits.
- invest at least 10% of your portfolio in bonds. This will help in stabilization.
- Invest in international market - 1:2 ratio for international to local stock market
- rebalance periodically. Know very clearly your target allocation. This will achieve “sell high, buy low” over the long run. For this always do the selling in tax advantages accounts (401k, ira) so that you don’t have to pay the tax.
-
Money is merely a tool that we can use to buy things. That is it.
The author recommends us total stock market index fund over s&p 500 mainly because simplicity and diversification to include smaller companies in portfolio is better. S&P 500 in fact will always have lesser growth compared to total us stock index fund, at least in the good stock years, because S&P 500 includes only the BIG 500 companies and excludes all the medium and small cap companies. S&P 500 only includes the least risky stocks. This does mean that during rough years, s&p 500 may shrink less. However, to counter such bad years, one should invest in bonds and international stocks.
Value companies are the ones that are beaten up and are trading at lower valuations. Growth companies trade at a hefty premium. Core companies and between value and growth. You want to have 33% of each type of stock. S&P 500 does not achieve that, total stock market fund does.
The author recommends owning the total US BOND market index fund, but not the international bond market fund. Reason: bonds should be part of the portfolio to provide us a cushion so that our portfolio swings are controlled. Since the foreign currency swings can be huge, international bond markets can have huge swings - not a great cushion.
Us stock market is 45% of the total world market.
Second grader portfolio:
10% total bond market index fund - US
30% total international stock index fund
60% total us stock index fund
The above 10-30-60 is a high risk portfolio.
20-40-40 can be the medium risk.
70-10-20 can be the low risk.
Anchoring seems like an interesting mistake we make. If I buy a stock at $X, then in my mind I would always think - sell when the stock price is more than $X. However that is not the right approach. The decision to sell or hold should be based on whether the stock is undervalued or overvalued. If it’s overvalued you should sell, and hold if undervalued. Of course things are not that simple. It will also depend on what your needs are - are you in need of cash asap, trying to diversify, trying to invest more cash, etc.
Indexing three fund strategy is not simply to reap average growth. In fact, it performs better than a high% of portfolios in the long run. Eg over a 10 year period, each of the three funds performed better than more than two thirds of their peers. Without doing complex maths, you can understand that the total probability of a person picking three different stocks or funds each of which performs better than two thirds of their peers is much lesser. The author has oversimplified it and states that the three fund strategy would give you better performance than 96% of portfolios. May be that is true, May be it is not. But it does make sense that given the lack of financial expertise/time to pick winning stocks to invest heavily, indexing is definitely an overall superior strategy than most other strategies.
Alternate asset classes: beyond the three fund strategy, one could invest in asset classes that are negatively correlated with asset classes. By investing in them, you are ensuring that when market goes down, your investment in these asset classes will yield higher returns - overall reducing the risk. There two alternate asset classes - real estate and precious metals.
- author recommends to own REIT (real estate investment trust) INDEX FUND. Although one should do this only if following two conditions hold:
- the total stock market investment is bigger than the value of real estate holdings
- Investing for long term
One can invest upto 6% of the US stock market portion of the portfolio. Eg in second grader portfolio, one could invest 6% money in REIT and 54% (instead of 60%) in total US stock index fund.
Bonds in the order of quality (highest to lowest) and interest rate (lowest to highest)
Us government, municipalities, investment grade corporates, junk bonds (small companies).
The longer the maturity of the bond, the higher the risk and hence higher the yield the bond will offer. Why higher risk? Two reasons:
- the longer the time horizon, higher the chance that they will not be able to pay back
- Interest rate changes (especially any period of hyper inflation) will eat away the gains.
The author recommends that investing in 5 year bonds is the sweet spot.
Why does hyper inflation eat away the gains from the bond?
Let’s say I purchased a bond that will pay 5% at maturity. So I paid $1000 today and I will get $1050 on maturity. However in the meantime, if there came a period of high inflation during which the government hiked the interest rates, then I would not be able to use the same cash to buy the high interest rate bonds - opportunity cost. Of course, if I try to sell my old bonds to get cash, i will end up selling for less than $1000. So I’m the end, there is no way to avoid the loss.
CDs may not be taxed - check on this. They are a great way to park your cash. They are insured by FDIC AND NCUA upto $100k per individual and $200k per joint account. Smaller banks like credit unions can offer higher rate since they need the cash more. And since they are FDIC/NCUA insured, you need not worry about them going bankrupt.
How to pick the CD?
- rate of interest
- Is insured. Check the bank name on FDIC/NCUA website.
- Early withdrawal penalty. If it less than 6 months of interest, it is fine.
- never enable “auto renew”. You want to fish for best CD on maturity.
- Stay below insurance limits
The author makes an interesting point about allocation of funds in 401k account V non-401k. Traditionally people would buy stocks in 401k so that they can grow uninterrupted, and buy bonds in non-401k to have readily available money. However, author says that doing the opposite makes more sense, at least from tax point of view.
He says that for stocks: in 401k, you will pay tax at ordinary tax rate on withdrawal but pay the reduced long term capital gain tax rate in non-401k.
For bonds: in 401k, you will not pay any tax on the interest realized annually while pay that tax annually in non-401k.
The risk with having stocks in non-401k is: when you need cash, you will have to sell stocks and if the market is crashed at that time, then you are screwed. However, per author, you could sell stocks at the crashes rate in non-401k, sell bonds in 401k and buy the same stock in 401k.
My thoughts: this sounds fine but may not be so straightforward. Eg the tax rate in withdrawing money from 401k would be quite low. One thing is for sure - the tax rate on bonds in non-401k will be quite high.
STRATEGY: keep only that much bonds in non-401k as needed to cover unforeseen needs. Rest of the bonds should be in 401k so that we are not paying taxes and the interest on bonds compounds. The rest of 401k can be in target date funds. Finally, the stocks needed to satisfy the target allocation can be bought in non-401k.
Note: the compounding for stocks is the same between 401k and non-401k if we keep the stocks for long term. Compounding for bonds works better in 401k.
January 12, 2010
Much more readable than the typical investment book, especially given that he's inserted conversations with his 9 year old son where he teaches him about investments. Leads to highly understandable lessons about investing. Could be a pretty decent starter book on investing, but does not at all cover the subject of personal finance.
August 15, 2015
The book needed more content, it could have been summarized in 20 pages. By 50 pages in, the second grader shtick got very stale and I found myself just skimming through most of the second half of the book, keying in on the advice. That being said, the advice is worth heeding, just did not need to be in novel form.
January 4, 2017
This book is not actually designed for second graders. The main purpose is to demystify the complex terminology and filter out all the useless noise that so many of us hear surrounding investing.
It's not going to make you a whiz at finance, but it provides a good practical starting point for someone who is working on learning the ropes in investing.
It's not going to make you a whiz at finance, but it provides a good practical starting point for someone who is working on learning the ropes in investing.
January 18, 2025
Learn Stock/Bond Investment Basics and a Simple Portfolio
Not only is the cover adorable, the insights within the book are easy to grasp and instantly apply. Written by a financial planner who actually DID teach his second-grader about the stock market and making smart investments, each chapter starts with Dad's lesson and his son's response (many of which are absolutely priceless). The book offers a strategy to build a super-simple portfolio, one that has consistently outperformed some of the "celebrity" money gurus.
This is the perfect book for anyone just starting to invest in the stock market or someone already investing but thinking of streamlining their portfolio. I use the book like this; I don't have a strictly "second grader" portfolio, but I have a smarter one after listening to this audiobook. Shout-out to parents, grandparents, and caregivers: The book will give you the tools to instill good money habits and knowledge when the children you love (or under your care) are young. What a gift to give them that will take them far, even before their peak earning years!
The book at Amazon
I listened to this audiobook as a part of my Audible Plus subscription; as of 01/17/2025, this audiobook is not a part of that subscription plan.
Not only is the cover adorable, the insights within the book are easy to grasp and instantly apply. Written by a financial planner who actually DID teach his second-grader about the stock market and making smart investments, each chapter starts with Dad's lesson and his son's response (many of which are absolutely priceless). The book offers a strategy to build a super-simple portfolio, one that has consistently outperformed some of the "celebrity" money gurus.
This is the perfect book for anyone just starting to invest in the stock market or someone already investing but thinking of streamlining their portfolio. I use the book like this; I don't have a strictly "second grader" portfolio, but I have a smarter one after listening to this audiobook. Shout-out to parents, grandparents, and caregivers: The book will give you the tools to instill good money habits and knowledge when the children you love (or under your care) are young. What a gift to give them that will take them far, even before their peak earning years!
The book at Amazon
I listened to this audiobook as a part of my Audible Plus subscription; as of 01/17/2025, this audiobook is not a part of that subscription plan.
May 12, 2019
This book is part of my self-imposed homework assignment on finance and investments. It is an easier read and the author advocates for a simple three-fund portfolio. The author does provide some tweaks to the three fund portfolio if you are too top heavy in stocks and you do not have enough equity in real estate, or if you are in later stages of your investment timeline and choose to chase higher bond returns by looking at high performing CD rates. There was also a easy explanation for keeping stocks in taxable accounts and bonds in tax deferred accounts. For those reasons, I thought it was worth it to stick through to the end of the book.
All of this was put into the perspective that every percent of interest/fees takes away from your bottom line. The author echoes Jason Zweig when he states that often when we are dealing with money we don't always understand which side of our brain (logical or emotional) we are thinking with. It's important to stay rooted to a simple investment plan...and that after a while more money won't bring us more happiness...but assuming more risk to chase higher returns will leave oneself worse off in the long run.
All of this was put into the perspective that every percent of interest/fees takes away from your bottom line. The author echoes Jason Zweig when he states that often when we are dealing with money we don't always understand which side of our brain (logical or emotional) we are thinking with. It's important to stay rooted to a simple investment plan...and that after a while more money won't bring us more happiness...but assuming more risk to chase higher returns will leave oneself worse off in the long run.
August 12, 2019
Some good nuggets on financial knowledge. Though heavily one-sided (the author advocates for 100% passive index funds). It has worked for the bull market in the past 10 years, but will it keep working in the future? How will they perform in the next crash? Who knows. There's quite some skepticism for this type of investing as it blindly drives prices higher, a pity that it is not touched upon in the book.
October 5, 2019
The title of the book sounds cheesy, but the point is that you can have a fantastic investment portfolio with three cheap index funds. Allan Roth has been a consistent advocate for years for low-cost index investing and this book takes the form of how he explained this investment philosophy to his 8 year old. Not super-original, not ground-breaking, but it's the best all-in-one investing book I've read so far. If you're only going to read one book, you couldn't do much better than this one.
December 25, 2024
This book is fantastic with it's content. It gives a lot of actionable info with lots of context. I listened to the audiobook and the only drawback is that he went through deep information very quickly and I couldn't keep up. I often had to rewind several times. Would recommend
October 19, 2016
Overall I liked this book. It makes a good argument for passive investment. The only thing I didn't like is that the author uses concepts that are not clear for the layman and are not defined anywhere in the book. If lack of space was the problem, then the author could have scratched the last chapters, which were about debt rearranging tips and repetition of previously explained concepts, and explained the core concepts better.
August 27, 2017
Down to earth book about investing.
April 12, 2019
Clever premise, with some good advice to just index investments.
September 28, 2019
Logic, arguments, and anecdotes shared are good but the conclusions drawn and recommendations are not, in my opinion.
December 24, 2019
2nd grader portfolio, static asset allocation portfolios, lazy portfolios, whatever you want to call it. Great fundamentals book on index investing
March 14, 2020
Very entertaining and instructive read!
June 13, 2020
The author explains some concepts that are complex like he did to his second grader son and at the end of every chapter he summarizes the important subjects. Great book all around.
June 14, 2020
Simple math. Keep your expenses low and accept the market average return. You’re probably not going to beat it and you’ll more than likely lose if you try. Oh, and keep your expenses low.
October 20, 2020
Simple and practical advice and data about index investing. One of the more entertaining investment books I've read.
April 30, 2021
Simple and applicable advice. Definitely a different way to think about investing but it rings true. The book is a little repetitive at points but overall, I’d recommend.
February 18, 2022
Fantastic basic investing book.
March 14, 2023
Like Rich Dad Poor Dad but from rich dad's perspective and only about investing. A lot of storytelling, for me way too much but that may attract someone else to read about this topic.
August 18, 2023
Keep it simple.
August 4, 2025
Investing explained so simply that even a second grader could understand it.
December 15, 2015
Apparently my parents did as good a job as the parents of Kevin, the titular second grader, because I got about half-way through thinking 'what a breeze' before realizing there was nothing new to be had here, unless I was deeply interested in explanations of why complicated investment tools which I've never heard of and do not want to buy are a bad investment... (spoiler: I was not deeply, nor shallowly, interested.)
On the other hand it did reinforce in an intellectual way the reasons behind the personal finance lectures I got as an eight year old about the stock market (no? nobody else had those regular Talks with their parents?) so maybe when I actually have money to do something with and the evil temptations which, according to Roth, strike every adult without fail, start to bother me, I can refute their charms and get rich.
Or something like that.
On the other hand it did reinforce in an intellectual way the reasons behind the personal finance lectures I got as an eight year old about the stock market (no? nobody else had those regular Talks with their parents?) so maybe when I actually have money to do something with and the evil temptations which, according to Roth, strike every adult without fail, start to bother me, I can refute their charms and get rich.
Or something like that.
May 25, 2011
How A Second Grader Beat Wall Street is the pinnacle in terms of investor simplicity, but don't let it's third-grade arithmetic formula fool you. Mr. Roth offers very sound advice for those who have no interest in spending time studying individual companies or the various markets. Allan Roth details his theories on simple, safe investing with color and humor. Well done. To reiterate, this book presents serious advice and a serious plan. The title runs the risk of turning away those who want to read a well-grounded and simple investment book. This is it. No matter how skilled an investor, you will learn something from this book. I recommend.
December 24, 2021
Having money makes us worry less about money. That alone can improve our lives.
Money can give you the freedom to pursue your passions.
Money can buy you time with your friends and family, which can provide a huge boost to your happiness.
Don't always look at what the market is doing. It tells about what it is doing in the short term and you want to focus only on the long term.
If people tell you that they know what the market is going to do , don't listen to them.
People aren't out to make YOU rich.
There has never been a shortage of ways Wall Street has devised to separate you from your money, and new ways are being devised every day.
Diversify.
Simplify your investing.
Money can give you the freedom to pursue your passions.
Money can buy you time with your friends and family, which can provide a huge boost to your happiness.
Don't always look at what the market is doing. It tells about what it is doing in the short term and you want to focus only on the long term.
If people tell you that they know what the market is going to do , don't listen to them.
People aren't out to make YOU rich.
There has never been a shortage of ways Wall Street has devised to separate you from your money, and new ways are being devised every day.
Diversify.
Simplify your investing.
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