Many investors around the world were saddened to hear that Charles T. Munger passed away on November 28th, 2023, only about a month before he would have turned 100 years old. Most people discovered him through his long friendship and business partnership with Warren Buffett, and many of us enjoyed the fact that he was more bluntly honest, more revealing at times, and overall a great compliment to Buffett.
For the certain type of self-motivated person, his message simply resonated. Lifelong learning. Frugality and delayed gratification. Putting up with adversity and not complaining. Spending your time as you want. There will be many tributes, and here I’ll simply share some of my favorite Munger quotes over the years. Poor Charlie’s Almanack: The Essential Wit and Wisdom of Charles T. Munger (cover of new edition above) is another great repository of his past speeches and wisdom.
His desire for independence starting at a young age. From Damn Right! A Biography of Charlie Munger (my review):
When Charlie’s grandparents read and reread Robinson Crusoe to him, they planted a notion in his head. “He wanted to be rich so he could be completely independent, like Crusoe on his island, and not have to do what anybody else said.”
I had a considerable passion to get rich. Not because I wanted Ferraris – I wanted the independence. I desperately wanted it. I thought it was undignified to have to send invoices to other people. I don’t where I got that notion from, but I had it.
Working and saving hard early on to start your snowball. Charlie Munger was financially independent at age 38 in 1962.
The first 13 years I practiced law, my income [from practicing law] was $300,000 total. At the end of that 13 years, what did I have? A house. Two cars. And $300,000 of liquid assets. Everyone else’d have spent that slender income, not invested it shrewdly, and so forth.
I just think it was, to me, it was as natural as breathing, and of course I knew how compound interest worked! I knew when I saved $10 I was really saving $100 or $1,000 [because of the future growth of the $10], and it just took a little wait. And when I quit law practice it was because I wanted to work for myself instead of my clients, because I knew I could do better than they did.
Work for yourself an hour each day. Like the schoolteacher I just read about that now makes $10,000 a month creating worksheets and selling them to other teachers, Charlie looked beyond his current working situation. From The Snowball:
Charlie, as a very young lawyer, was probably getting $20 an hour. He thought to himself, ‘Who’s my most valuable client?’ And he decided it was himself. So he decided to sell himself an hour each day. He did it early in the morning, working on these construction projects and real estate deals. Everybody should do this, be the client, and then work for other people, too, and sell yourself an hour a day.
The first $100,000 is the most difficult:
Munger has said that accumulating the first $100,000 from a standing start, with no seed money, is the most difficult part of building wealth. Making the first million was the next big hurdle. To do that a person must consistently underspend his income. Getting wealthy, he explains, is like rolling a snowball. It helps to start on top of a long hill—start early and try to roll that snowball for a very long time. It helps to live a long life.
If you do it right, you only have to get rich once.
The beauty of it is: you only have to get rich once. You don’t have to climb this mountain four times. You just have to do it once.
Lifelong, continuous learning. We have the ability to access so much wisdom these days. We can make lots of small mistakes, course-correct, make ourselves better, and keep moving forward. From Charlie Munger: The Complete Investor:
The point is not to treat anyone like a hero, but rather to consider whether Munger, like his idol Benjamin Franklin, may have qualities, attributes, systems, or approaches to life that we may want to emulate, even in part. This same process explains why Munger has read hundreds of biographies. Learning from the success and failure of others is the fastest way to get smarter and wiser without a lot of pain.
On living a happy life and surrounding yourself with good people.
You want to have reasonable expectations and take life’s results good and bad as they happen with a certain amount of stoicism. There’ll never be any shortage of good people in the world. All you got to do is seek them out and get as many of them as possible into your life. Keep the rest the hell out.
Simply avoid certain things. From How To Make Your Life Completely Miserable:
Let me use a little inversion now. What will really fail in life? What do you want to avoid? Such an easy answer: sloth and unreliability. If you’re unreliable it doesn’t matter what your virtues are. Doing what you have faithfully engaged to do should be an automatic part of your conduct. You want to avoid sloth and unreliability.
He has also advised keeping an extremely wide chasm between you and gambling, alcohol, and drug addiction. Why even mess around with things that could destroy your life completely?
Optimism for the future. He may sound cranky a lot, especially when he was a loud critic of crypto during it’s boom, but his overall message was of one of optimism. From the book University of Berkshire Hathaway:
However, Munger beamed that Berkshire’s best days of contributing to civilization are ahead. He noted that mankind is getting close to solving the technical problem of our time -solar power. Cheap, clean, storable power will change the world. Munger said, “As I get closer and closer to my death, I get more cheerful about the future I won’t see.”
[…] Munger may have surprised the crowd with a list of things he is quite optimistic about: The main problems of civilization are technical and solvable, all with energy, with huge benefits for civilization. Berkshire’s culture will continue to work for years to come. He likes to see people rising rapidly from poverty, and that is happening in China and India.
More sources of Charlie Munger wisdom:
Thank you, Mr. Munger. Learning from your wisdom and example has materially improved my own life (and indirectly that of my family) in many different ways.
