Everyday Cheapskate: Get in touch with your inner second-grader to save money

So, how is your investing for the future coming along? What? You’re confused? I understand. Most of us are total novices. So what do we do? We let others make our decisions for us, thinking they are so much smarter because they are “professionals” or TV commentators.

Recently, I was drawn to a book that was simple to read, easy to understand and quite charming. In “How a Second Grader Beats Wall Street: Golden Rules Any Investor Can Learn” by Allan S. Roth, we follow the story of Kevin Roth, the author’s 8-year-old son, and discover exactly how simple it can be to become a successful investor.

By second grade, Roth contends, we’ve learned simple and truthful lessons about the world around us. As life goes along, however, what we continue to learn is less about making us smarter and more about making us outsmart ourselves.

By adulthood, we’re feeling that serious things like money are too important to deal with. And that’s when things take a turn. Here are the dumb things Roth says many adults do with their money:

1. They love to buy high and sell low. They buy after the market is up and then panic and sell when the market falls.

2. They play important games without knowing the rules. Kids know you can’t win if you don’t know the rules. Same goes for investing in something no one can understand.

3. They believe whatever they want to believe. People gave Bernie Madoff $50 billion without knowing what he was doing with the money.

4. They pass over the low-hanging fruit and go for the fruit that is way out of reach, if it is reachable at all. They miss the easy stuff that will make them money no matter what the market does.

5. They think strangers want to help them. We teach our kids about stranger danger and then hand over our nest egg to strangers who claim they know best.

6. They constantly complain about taxes but pay more than they need to. Why do adults go out of their way to pay more?

7. They lend money to people they know can’t pay it back. They sell the loans to other adults and think they are going to get their money back.

8. They follow the herd. Like heat-seeking missiles, they go after whatever has been hot.

9. They watch too much financial TV. Conventional wisdom tells us that a little knowledge is a dangerous thing, but so is too much information. Believing that the gurus on TV have a good track record and are giving good advice is foolish.

10. They spend their lives in a futile attempt to disprove second-grade arithmetic. Ten minus 2 equals 8. If the market earns 10 percent and they pay helpers 2 percent of that return, they won’t end up with 12 percent.

You have control over your investments. This book will help you cut to the chase, connect with your inner second-grader and take control of your future!