Charles Munger, Vice Chairman of Berkshire Hathaway and Warren Buffet’s closest business partner, passed away on Tuesday, November 28, at 99. Buffett and Munger’s partnership lasted over 50 years, producing Berkshire Hathaway, one of the largest and most successful conglomerates in history.
When Munger passed, his estimated worth was $2.6 billion. Buffet, 93, is believed to be worth $119 billion.
But Munger was far more than just a wealthy man. Apple CEO Tim Cook called Munger a “keen observer of the world around him,” and he was known for his pithy bits of common-sense wisdom known as “Mungerisms.”
These sayings have been collected into books, including “Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger.”
My greatest lesson from Munger:nnu2022Never ever feel sorry for yourselfnu2022Never have envy
In a piece called “Charlie Munger on How to Lead a Successful Life,” Time magazine shared one of Munger’s most valuable pieces of advice. Munger believed that one of the best qualities one can have is the ability to see things in the inverse.
“If you turn problems around into reverse, you often think better. For instance, if you want to help India, the question you should consider asking is not “How can I help India?’ Instead, you should ask, ‘How can I hurt India?’ You find what will do the worst damage, and then try to avoid it,” Munger once said.
“Perhaps the two approaches seem logically the same thing. But those who have mastered algebra know that inversion will often and easily solve problems that otherwise resist solution. And in life, just as in algebra, inversion will help you solve problems that you can’t otherwise handle,” Munger continued.
Charlie Mungeru2019s formula for success is simple and perfect:nn- Spend less than you earn n- Invest prudently n- Avoid toxic people and toxic activitiesn- Defer gratificationn- Never stop learning
Munger believed it’s as important to be as clear about the things we want to avoid in life as those we wish to pursue.
“What will really fail in life? What do we want to avoid? Some answers are easy,” Munger said. “For example, sloth and unreliability will fail. If you’re unreliable, it doesn’t matter what your virtues are, you’re going to crater immediately. So, faithfully doing what you’ve engaged to do should be an automatic part of your conduct. Of course, you want to avoid sloth and unreliability.”
Another piece of Munger’s advice that needs to be shared far and wide in today’s America is avoiding “extremely intense ideology” because it “cabbages up” one’s mind.
“You see a lot of it in the worst of the TV preachers. They have different, intense, inconsistent ideas about technical theology, and a lot of them have minds reduced to cabbage. That can happen with political ideology. And if you’re young, it’s particularly easy to drift into intense and foolish political ideology and never get out,” Munger said.
As a student of the human condition, Munger understood that few of us can overcome our own “self-serving bias.” So, when making persuasive arguments, it’s best to avoid using reason and, instead, appeal to the person’s interests.
“You should often appeal to interest, not to reason, even when your motives are lofty,” Munger said.