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Charlie Munger’s Core Ideas that Helped Him Succeed

November 30, 2023.

Berkshire Hathaway’s Charlie Munger on Core Ideas that Helped Him Succeed in Life and Business

Note: this article was originally published here: Berkshire Hathaway’s Charlie Munger on core ideas that helped him succeed | Fox Business

 

Berkshire Hathaway announced earlier this week the passing of Charlie Munger, the billionaire and vice chairman of the company.

Munger would have turned 100 on New Year’s Day, Jan. 1, 2024. He was the longtime business partner of Warren Buffett as well as a close friend who helped build the conglomerate they both steered for decades.

“Berkshire Hathaway … was advised by members of Charlie Munger’s family that he peacefully died this morning at a California hospital,” the company said on Tuesday in a press release.

BERKSHIRE HATHAWAY’S FUTURE AFTER CHARLIE MUNGER’S PASSING

Buffett himself said in a statement, “Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation.”

Among the many talks Munger gave throughout his lifetime — sharing that inspiration and wisdom with others — was a commencement address to the University of Southern California Gould School of Law, on May 13, 2007.

 

Houston Cofield/Bloomberg© Houston Cofield/Bloomberg

 

In that 2007 speech, Munger “offered insights into the practices that contributed to his success and to his standing as one of the wealthiest people in the world.”

Charlie Munger, vice chairman of Berkshire Hathaway Inc., is shown speaking to the media during a shareholders shopping day ahead of the Berkshire Hathaway annual meeting in Omaha, Nebraska, on May 3, 2019. Houston Cofield/Bloomberg© Houston Cofield/Bloomberg

Among his observations in that talk: “The acquisition of wisdom is a moral duty,” he said.

He also told those assembled that he realized during his time in law school that “the best road to success in life and learning would be a multidisciplinary one.”

Luckily, I had the idea at a very early age that the safest way to try to get what you want is to try to deserve what you want.

It’s such a simple idea. It’s the golden rule. 

You want to deliver to the world what you would buy if you were on the other end. There is no ethos in my opinion that is better for any lawyer or any other person to have.

By and large, the people who have had this ethos win in life, and they don’t win just money and honors.

They win the respect, the deserved trust of the people they deal with. And there is huge pleasure in life to be obtained from getting deserved trust.

The second idea that I developed very early is that there’s no love that’s so right as admiration-based love, and such love should include the instructive dead.

Somehow, I picked up that idea, and I’ve lived with it all my life. It’s been very useful to me.

Another idea, and this may remind you of Confucius, too, is that the acquisition of wisdom is a moral duty. It’s not something you do just to advance in life.

And there’s a corollary to that idea that is very important. It requires that you’re hooked on lifetime learning. Without lifetime learning, you people are not going to do very well. You are not going to get very far in life based on what you already know.

You’re going to advance in life by what you learn after you leave here.

Consider Berkshire Hathaway, one of the best-regarded corporations in the world. It may have the best long-term, big-assets-involving investment record in the history of civilization.

The skill that got Berkshire through one decade would not have sufficed to get it through the next decade with comparable levels of achievement. Warren Buffett had to be a continuous learning machine.

The same requirement exists in lower walks of life. I constantly see people rise in life who are not the smartest, sometimes not even the most diligent. But they are learning machines.

They go to bed every night a little wiser than they were that morning. And boy, does that habit help, particularly when you have a long run ahead of you.

Alfred North Whitehead correctly said at one time that the rapid advance of civilization came only when man “invented the method of invention.” He was referring to the huge growth in GDP per capita and many other good things we now take for granted.

Big-time progress started a few hundred years ago. Before that, progress per century was almost nil. Just as civilization can progress only when it invents the method of invention, you can progress only when you learn the method of learning.

 

JOHANNES EISELE/AFP via Getty Images© JOHANNES EISELE/AFP via Getty Images

 

I was very lucky. I came to law school having learned the method of learning, and nothing has served me better in my long life than continuous learning.

Consider Warren Buffett again. If you watched him with a time clock, you’d find that about half of his waking time is spent reading.

Then a big chunk of the rest of his time is spent talking one-on-one, either on the telephone or personally, with highly gifted people whom he trusts and who trust him.

Viewed up close, Warren looks quite academic as he achieves worldly success.

Another idea that was hugely useful to me was one I obtained when I listened in law school when some waggish professor said, “A legal mind is a mind that considers it feasible and useful, when two things are all twisted up together and interacting, to try to think about one thing without considering the other.”

Well, I could see from that indirectly pejorative sentence that any such legal approach was ridiculous.

And this pushed me further along in my natural drift, which was toward learning all the big ideas in all the big disciplines, so I wouldn’t be the perfect damn fool the professor described.

And because the really big ideas carry about 95% of the freight, it wasn’t at all hard for me to pick up about 95 percent of what I needed from all the disciplines and to include use of this knowledge as a standard part of my mental routines.

Once you have the ideas, of course, you must continuously practice their use. Like a concert pianist, if you don’t practice you can’t perform well.

So, I went through life constantly practicing a multidisciplinary approach.

Well, this habit has done a lot for me. It’s made life more fun. It’s made me more constructive. It’s made me more helpful to others. It’s made me richer than can be explained by any genetic gifts.

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References

Makcey, Marueen and O’Halloran, Suzanne.  “Berkshire Hataway’s Charlie Munger on core ideas that helped him succeed in life and business”.  Berkshire Hathaway’s Charlie Munger on core ideas that helped him succeed | Fox Business.  November 30, 2023.

 

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