33 Life Lessons From Charlie Munger (These Changed My Life!)

Transcript:

On this episode of the personal finance podcast, 33 life lessons from Charlie Munger.

What's up everybody. And welcome to the personal finance podcast. I'm your host, Andrew founder of master money. co and today on the personal finance podcast, we're going to be talking about 33 life lessons. If you guys have any questions, make sure to hit us up on Instagram, TikTok, Twitter at master money co and follow us on Spotify, Apple podcast or whatever podcast player you love.

Listen to this podcast on it. If you want to help out the show, consider leaving that five star rating and review on Apple podcast, Spotify. Or your favorite podcast player cannot thank you guys enough for leaving this five star ratings and reviews. They truly, truly mean the world to me. Now, today we are going to be talking through 33 life lessons from Charlie Munger.

And the reason why we are doing this episode now is Charlie Munger passed away yesterday at the time of recording this. So on November 28th. 2023 Charlie Munger, who is the longtime business partner of Warren Buffett, passed away. And he's one of the wisest people that you will ever read about or ever learn from.

And I'm going to give you a bunch of resources on how to learn from Charlie at the end of this episode. And I'm going to talk through 33 life lessons that I learned from him. And we're going to go through a story that I think is also really, really powerful to kind of show who he is and how he operated his life.

Now, if you don't know who Charlie Munger is, he actually started his life Off as an attorney and he was an attorney early on in his life, but in 1978 he joined Warren Buffett to start investing and start to work with Berkshire Hathaway. And he and Warren both grew Berkshire Hathaway to what it is today, which is one of the largest companies in the world.

It is a top 10 company in the S and P 500. Now, Charlie is known for his wisdom. He is known for Insight and the simplicity in which he presents it. And so I think that is why it is so powerful to kind of go through some of these lessons that he has today. Now, recently I was reminded of a story from Charlie and it's from George Mac on Twitter or on X and I'll link it up down below so that you can read it, but I'm actually going to read this on the podcast.

I don't read many things in the podcast. Usually it's me off the riff talking about different subjects, but I'm actually going to read this cause I think this is a really, really powerful story that's going to show you what Charlie is about, and then we're going to dive into those life lessons. Cause these life lessons literally changed my life.

And a lot of these are really, really powerful. You may. I've heard me talk about them in the past episodes, and they're really, really powerful things to kind of learn through. But in 1953, Munger was 29 years old, recently divorced, lost the house, huge social stigma of divorce. Back then his eight year old son, Teddy was diagnosed with cancer.

The leukemia was incurable. No medical insurance. Munger paid for all of his medical care. And Charlie would visit Teddy in the hospital every single day and then walk the streets crying. Teddy died at the age of nine. Charlie was broke, divorced, and just lost his child. 99. 9 percent of people would have turned to alcohol, drugs, or suicide, and you'd understand why.

Munger never did. Fast forward to 52 years old, a failed surgery left him blind in one eye, with the potential of going fully blind one day. And Charlie was an obsessive learner who read every book he could get his hands on. When confronted with the possibility of going blind, and no longer being able to read, he said, It's time for me to learn braille.

The only thing that might be more impressive than Charlie's intellect were his actions. And what this story kind of shows is the type of person Charlie was. Charlie went through a lot of hardships throughout his life, but at the same time, what he did was focus on the things that he could control and then went after those things and took Action on those things.

He is one of the most successful businessmen of all time. One of the most intelligent business people of all time. And at the same time, you're going to see exactly why in the life lessons he can teach you. But one thing I want you to note up front is when something happens to you in life and it is not going your way, how can you focus on the things that you can control so that you can take action and move forward with the actions that you can.

Actually focus on and control. It is really important to understand this. And we've done an entire episode actually on this entire subject, because I'm so passionate about this subject, focus on what you can control and move forward. Now let's get into it. Lesson number one is spend each day trying to be a little wiser than you were when you woke up.

Now, this is a really, really powerful lesson that a lot of us will not take action on. But I want you to understand this. Charlie was a huge reader, and we'll talk more about how much he read later on in this episode. But he was someone who tried to learn new things every single day, and he was constantly reading.

In fact, if you look at people and successful people, most successful people read, there's a book called Rich Habits by Tom Corley and Tom actually looked into the habits of people who were millionaires and multi millionaires who are very, very wealthy. And he found that when he surveyed all of these folks, the majority of them read at least 30 minutes per day of nonfiction books.

Charlie and Warren. Read hundreds of pages every single day. So there's a massive difference there. And he's trying to learn as much as he possibly can. In fact, his kids used to make fun of him and say that he was a book with legs. And so this is something where, you know, Charlie always had his nose in a book because he was trying to learn as much as he possibly could.

This is where his wisdom came from. This is where his knowledge came from. This is where he got investment ideas. And so reading as much as you possibly can, but trying to get a little wiser every day is something we should all strive to do by listening to this podcast. You are doing that by going out and reading books.

You are doing that by learning and taking courses and webinars and all these different things, you are getting a little bit wiser every single day. Lesson number two, the best thing a human being can do is help another human being no more. Now, this is something where you can change the life of someone else.

If you know a lot about a subject or you know something that could truly change someone's life, teaching them about that subject is going to be really, really important and really, really powerful. Why? Because they can take that information and take action on that information and change their own life.

It is not up to you to change their life, but it's up to you to learn how to teach someone how they can change their life. No, in the same respect, this is also an obligation. I feel for us as parents, we need to make sure that we are teaching our children as much as we possibly can. And this is where it comes for your wealth, your health, your faith.

All of these different things are massive, massive aspects that we need to be passing down to our children. Number three, I love lesson. Number three, it is remarkable how much long term advantage people like us have gotten by trying to be consistently not stupid instead of trying to be very intelligent.

Warren and Charlie were very well known for not investing in anything. They did not understand. If you do not understand what you are investing in, there is no reason for you to even consider investing in something. That is why it took them so long to invest in tech stocks. They lost out on a lot of gains because they did not invest in tech stocks earlier, but guess what?

They are still extremely wealthy because they invested in the things that they understood. They avoided being stupid instead of trying to look intelligent. So they would invest in basic things, things like railroads, Coca Cola, things they could completely understand. Oil companies, banks, these are all things that were in their wheelhouse in their circle of competence is what they call it.

And these are things that they fully, fully understand. So it's very, very important for us to follow the same rule. Don't take unnecessary risks on things that you do not understand. Instead, make sure you take your time, understand the process, understand what you're going through. If you're investing in something, make sure you understand that investment fully, especially even if it's an index fund or a target date retirement fund, you have to understand what you are doing.

Try to avoid looking super intelligent and just instead avoid stupidity. Number four in my whole life, I have not known any wise person over a broad subject matter area who didn't read all the time. None zero. So this is one where we talked about earlier. He is a huge reader. He is a. Huge learner, and this is something where I truly, truly believe that each and every single one of us need to be reading every single day.

Just as, as exercise is fantastic for the body, reading is fantastic for the mind. And every person that I know, Charlie died at the age of 99 and every single person that I know who lived a long life were also very big readers, meaning they were exercising their mind as much as they were exercising their body.

Now, Charlie was not known for being a healthy individual. I mean, he did not eat healthy. He did not have. Peak health, but he read all the time, which kept his mind young and his wisdom was absolutely unparalleled. You're going to start to see unfold here as we talk through some of these things. So this is something where I truly believe if you can at least get 30 minutes per day, if not an hour per day, audio books are great.

As well, and that's something where I've had to go to audio books a lot more. As life has gotten busier. I've had kids audio books are huge. I also use a Kindle a ton for reading. And so if you want to read a book for a week, I've talked about this a number of times, look at the number of pages a book has divide that number by seven and read that many pages per day.

It's a very simple system. But it's going to allow you to read a book per week, especially if that's one of your goals. Now, if you guys want to learn what are the best books out there are the best books that I can read on the master money newsletter. We actually have a book club called the high performance book club.

And I show you the books that I'm reading every single week. And sometimes we gear it towards personal finance. Sometimes it's business. Sometimes it's productivity. Sometimes it's just improving your life. And so the high performance book club is inside the mastermind newsletter. So if you're not subscribed to that, check it out in the show notes and definitely grab that as well.

Number five, the big money is not in the buying and selling, but in the waiting. So you all know that I am a longterm investor and most of you listening here are longterm investors. If you were day traders, you wouldn't be listening to me because I absolutely do not believe in day trading whatsoever and in longterm investing and when you're buying businesses or if you're buying real estate.

Every different aspect of investing waiting is the name of the game. Now, Warren and Charlie are famous for waiting. In fact, at the time I'm recording this right now, they are sitting on a huge pile of cash and they keep a ton of cash around. Why? Because they are waiting for opportunities. The same thing goes for your retirement accounts.

You are waiting for your accounts to grow over time. Long term success when it comes to investing is waiting for the right opportunities, then taking advantage of those opportunities and then waiting for those opportunities to come to fruition, especially if you're investing in something like index funds or ETFs, that is where you're just buying and waiting, buying and waiting.

Over and over and over again. And those who can learn how to wait, those who can learn how to wait when it comes to investing or going to be the most successful investors, Warren Buffett is well known for having the majority of his net worth, 99 percent of his net worth. After his 60th birthday. Why?

Because it allowed compound interest to start working inside of his investment portfolios, and he could see his wealth start to grow. 99 percent of his net worth was on the second half of his lifetime. So this is why it's so powerful to wait and waiting is the name of the game. Lesson number six, the desire to get rich fast is pretty dangerous.

So this is along the same lines as the same last quote. If you want to get rich quick, that is something where I really, highly do not recommend trying to do. Now, a lot of people out there, there's a lot of gurus on. Talk and Instagram saying, Hey, I don't want to get rich slowly. I just want to get rich quick.

Well, here's how you do it. How do you get rich quick? You start a business, you work your butt off and make sure that business is successful. You have some luck involved in that as well. And then you can get possibly rich quick. If not, you could fail also very quickly as well. So getting rich quick is a very, very dangerous pathway instead of the get rich slow pathway, which get rich slowly is what I love to do.

It is the way that I manage my money. It is the way that I look at money is getting rich slowly. That is the safe way to get there. And one of the most powerful ways to get there as well. Number seven, this is along those same lines. It's waiting. That helps you as an investor. And a lot of people just can't stand to wait.

And this is just along those same lines. You need to be able to wait. Number eight, this is a personal finance lesson that every single person listening to this podcast needs to hear spend less than you make, always be saving something. Put it into a tax deferred account over time. It will begin to amount to something.

What is a tax deferred account? That's a 401k. That is an IRA. That is a four 57. That is a 403 be all of those different accounts that we talk about all the time or something where this is why it's so incredibly powerful. So when you see the real estate guru on tick tock right now, we're on Facebook or on Instagram or whatever social media platform you use a 401ks or a scam.

Well, one of the greatest investors of all time is telling you right here, spend less than you make, always be saving something and put it into a tax deferred account. You've got to understand, even at Ramsey solutions, they just surveyed a ton of millionaires and. 80 percent of those millionaires became millionaires in their 401k.

There is a reason for that and it is one of the best ways to become a millionaire, especially if you have the get rich slowly mentality. Number eight. The iron rule of nature is you get what you reward for. If you want ants to come, you put sugar on the floor. It is up to you who you attract in your life.

And who you are surrounded with within your life. And if you want to figure out who is going to come to you in your life, look at the incentives. Look at what they are incentivized to do. This is a really powerful thing to understand, especially when it comes to business. Number nine in business. I look for economic castles protected by unbreachable moats.

Okay. So if you've never heard Warren and Charlie talk about this, basically what they look for is businesses with what they call economic moats, meaning that. This business is so good that even if the competition comes in, it's going to be really hard for them to come in and be really competitive and breach that economic moat.

A great example of this is Amazon. Amazon has a massive, massive moat around the company because they can get stuff to you so incredibly fast. They have amazing customer service. They have amazing management. In place, and so they've created this economic moat. We're sure they can have competitors in different industries, Walmart being probably the largest one target being the second largest.

And so they have these companies in place who can compete with them, but none of them do it as well as they do. And Amazon has the most fast, efficient, easy to use website right now. So this is just an example of a company who has a massive economic moat and competitive advantages, because that is what an economic moat is.

It's a huge. Competitive advantage. So it's really, really important. If you're going to invest in something to look for those companies that have those competitive modes, and that should always be in the back of your head, number 10, there is no way that you can live an adequate life without many mistakes, mistakes are going to be part of your life's journey.

Mistakes are something that you are going to absolutely make learning how to learn from those mistakes and move forward with that information is what makes a person successful. And so I have made so many different mistakes in my life. And my goal, every time I make a mistake is what can I learn from this mistake?

How can I take this information and use it to move forward? So that I don't make that mistake again, in the same tone. You also don't have to learn from your own mistakes. You can learn from other people's mistakes. So this is why reading comes important again, because you see life stories. You see how people operate.

You learn about different things and mistakes people have made. And you make a mental note and say, I'm not going to make that same exact mistake. And you can learn from other people's mistakes. Well, let's jump to a break and we'll get into number 11. Number 11, the safest way to get what you want is to try to deserve what you want.

This is a powerful message for all of us to learn that, Hey, we really need to deserve. We want to go out and get, if we are the type of person who wants to start a successful business, but we do nothing in order to actually move that business. Forward, how do we actually deserve what we want? This is a massive thing for a lot of people out there.

We want to become really, really wealthy, but we're not taking action towards actually building wealth. Even if it's just a couple hundred dollars extra that we have every single month, if we're not investing those dollars and we're just blowing those dollars on things that we really don't even care about that, we really don't deserve to become wealthy.

So you have to take. Action towards the things that you want in life so that you can deserve what you want. The same thing goes for health and fitness. For example, you can be out there and saying to yourself, Hey, I want to become really healthy and fit, but either my diet's not right, or I'm not exercising enough.

It's one of those two things. It's calories in and calories out. And if you're not in a caloric. deficit and it makes no sense for you to deserve what you want when you're not doing the right thing. So this is something where I really love this lesson. And I think we really have to think through this and take personal responsibility with a lot of things that we go through day in and day out.

Number 12, I love this one. The most important thing to do if you find yourself in a hole, Is to stop digging. Many of us have found ourselves in situations that are less than ideal. But instead of getting ourselves out of that situation, we double down on that situation. So for example, maybe you have a business who is just sucking cash out of your bank account.

Or maybe you're in a situation that's just not the best situation for your life. The best thing to do is if you're in a hole is to stop digging. This is one of my favorite quotes, and I've talked about this a number of different times in different episodes as well. And I think it is one that we really need to remember.

Number 13, and this is one that we try to do with this podcast. I hope we are doing that for you, but simplicity has a way of improving performance through enabling us to better understand what we are doing. My entire goal with this podcast is to simplify finance and personal finance for you. I'm trying to portray it in the most simple way possible that I possibly can to the best of my ability.

And so when I do this, that is exactly why I'm doing this because I think you all can perform so much better if people just simplify this stuff for you, make it. Easy so that everybody can understand. This is not to say that you all are not intelligent. You are some of the most intelligent listeners out there.

What this is to say is simplification is what is going to lead to success. I want everything simplified in my life as well so that I can become successful. This is why we talk about automating our money. This is why we talk about simplification with our financial plan. You don't need this complex financial plan.

You need a simple financial plan that you can execute day in and day out. Lesson number 14, love this one. The more hard lessons you can learn vicariously instead of through your own hard experiences, the better. And this is exactly what I was talking about earlier. You can learn from mistakes. They just don't have to be your mistakes.

So learn through other people's experiences, through reading, through listening to podcasts, and don't make the same mistakes that they did. A great example of this is before I started investing in real estate, I used to listen to and read a bunch of different real estate books, podcasts, all those different things to try to understand what mistakes were these people making.

And then I was making sure that. I did not make the same mistakes as these folks. And a lot of this had to do with managing tenants or how to repair properties. And so once I did that, there were so many of these situations that I ran into and I already learned from the mistakes. They just weren't out my mistakes on my dollar number 15.

And this is a big one for a lot of people. I never allow myself to have an opinion on. Anything that I don't know the other side's argument better than they do. So I am the type of person that typically I don't have a huge opinion on specific things unless I truly, truly, fully understand it. But there are other people out there who have an opinion on literally everything and they think their opinion is right.

But if you don't really have a full grasp of the entire thing that you're talking about, you really should not have an opinion. The pros and the cons of your argument and both sides of that argument, you need to have a full understanding of that as well. And we all know people in our lives who are exactly like this.

They have opinions on everything. Most of the time they think they're right. They're not always right. A lot of times they are. And sometimes it's people who are pretty intelligent, but at the same time, we have to make sure that we are very, very careful about that because we can get ourselves in some sticky situations.

Lesson 16. In the world of business, the people who are most successful are those who are doing what they love. Now, one reason a lot of people say this is because when you love what you do, you don't have to work a day in your life so you can spend day in and day out. It never feels like you're working.

And so you can work for a very, very long period of time and time leads to success. And so this is one big. thing that, for example, this podcast, I would do this podcast, no matter what, I want to have this podcast around for years and years and years, because I love teaching you all how to build wealth.

That is one of the most rewarding things for me. And I truly, truly enjoy that. And so if you can find things that you can find success in, but you also love, it is the perfect combination. Lesson 17, the best thing that happens to us is when a great company gets into terrible trouble. We want to buy them when they're on the operating table.

So Warren and Charlie are very famous for buying companies who are truly, truly struggling and they need an out. They need a way to get out of that situation. Warren and Charlie will invest in that company. They will put good managers in place and they will become successful with that company. This is called value investing.

You're buying a company that is struggling that maybe has a great balance sheet, or they have good assets on the table. They have that economic moat, but they are just struggling financially and you can turn that thing around. And that's exactly how he built his business. And for a lot of you out there, if you're going to buy small businesses, or if you're interested in investing in stocks, this is one way that you can look through this.

Lesson 18, take a simple idea. And take it seriously. For a lot of people, when you have a simple idea, they think it's not a good idea. But in all reality, simple ideas a lot of times are some of the best ideas that are out there. Lesson 19. All intelligent investing is value investing. Acquiring more than you are paying for So value investing is when you buy a company or you buy a stock for under the actual value.

And Charlie and Warren used to look for companies at a specific book value and then buy those companies below that book value because they thought book value is actually the floor that that company could go to. And so this is something. Where if you are someone who buys individual stocks, this is a great methodology to think through value.

Investing is a little bit more difficult than it used to be because there's so much information out there, but you can definitely definitely still buy this in physical businesses, in real estate, those types of things. Number 20. The best investment you can make is in yourself. Now you hear me say this at the end of the show a lot.

And the reason why I say this because I truly believe that investing in yourself is the most powerful thing that you can do, meaning that you spend money on courses or you spend time and energy learning or reading. This is some of the best investments that you can make because you are acquiring skills that are going to allow you to be able to Earn more money over time.

And once you have those skills, it will absolutely change your life and change your earning trajectory. And you can take those additional new earnings and put them towards your freedom or the things that you value. So investing in yourself is one of the most powerful things that you can do. Number 21, the idea of excessive diversification is madness.

So Warren and Charlie are known for owning a small amount of companies. They didn't own some massive amount of diversified companies. They own just a small number of companies. And at the same time, having excessive diversification, you can see this across the board where people say, Hey, you need to be in crypto.

You need to be in broad based mutual funds. You need to be in farmland. You need to be in real estate. You need to be in gold. You need to be in silver. You need to be all over the place. You do not have to have a successive diversification. You need to have a simple investment plan. You just stick to it over the long period of time and you will be successful.

I promise you. So don't go excessive on diversification. Number 22 is you hear me say this a lot in a bunch of different ways, but there is no better teacher than history and determining the future. There are answers worth billions of dollars in a 30 history book. So there are so many different business lessons, investing lessons, and life lessons that you can learn from history.

One of which that we talk about in this podcast all the time is we talk about historic returns. The S and P 500 has returned over 10 percent to investors historically. And people come back and say, well, past results are not indicative of future results and no, they are not, but that's all we have to go on and that's all we have to predict going future.

Otherwise you were. Absolutely just guessing what's going to happen and even relying on history is guessing what's going to happen. But if you try to think of any other way to come up with what returns are going to be, you are just guessing. So yes, I'm all for being conservative on those numbers, but at the same time, you have to rely on history to learn your lessons.

The same thing goes for learning life lessons, learning for people's mistakes. learning for people's successes in taking little pieces of each one of those things and molding them into your own life. It is really important to do that and learn from history. Reading history is a really, really powerful thing that you definitely want to do.

Lesson 23. Our job is to find a few intelligent things to do. Not keep up with every damn thing in the world. So Charlie and Warren actually keep their lives very simple. And they are really, really wealthy people, but they're not super busy people. Meaning that they spend a lot of their times in their offices, day in and day out reading and doing the things that they want every single day.

Why? Because they try to simplify everything. And not try to keep up with everything in the world. And I think this is really important for us to remember in our day in lives now. Because for a lot of people, we just want to get really good at a couple of things. You don't have to be good at everything.

So build skills in your career. Build skills around your family. Build skills around your hobbies. But you don't have to be good at literally everything. Instead, build the skills that matter. The ones that are going to change your life. for the life that you want, and then going forward, you can utilize those skills for the rest of your life.

Let's jump to another break, and we'll be back with number 24. Number 24 is one we touched on earlier, but I think it is really, really important to reiterate with a different version of how he went through this. The best way to get what you want in life is to deserve what you want. How could it be otherwise?

It's not crazy enough so that the world is looking for a lot of undeserving people to reward. If you're undeserving, why do you think you're going to get rewarded for those options? So make sure that you are doing the work to ensure that you deserve the outcome that you want. Number 25. The world is not driven by greed.

It is driven by envy. I have conquered envy in my own life. I don't envy anybody. I don't give a damn what someone else has. But other people are driven crazy by it. Now, envy is one where a lot of people struggle with this. And this happens all over the place. Your friend gets a brand new car, your neighbor gets a brand new car, and all of a sudden you say, hey, My car in the driveway actually is looking kind of old.

I need to get a brand new car. Or you go out and you see a friend who has a brand new purse. For example, I've seen this happen a number of times with people and they have a brand new designer piece or they have a brand new purse. And then all of a sudden you say, Hey, I want that designer piece. And you think about yourself with those items and the psychology of money.

Morgan Housel goes through this process of somebody buying a brand new car. And they're not thinking about you in that car and how cool you look in that car. They're thinking about themselves. In that car and envy is something that can absolutely destroy your life. You have to make sure that you get control of it and realize that it is happening, especially when it comes to your money.

You can have so much more money in your bank account. If you get rid of envy, envy is the enemy to building wealth. Make sure that you completely understand that number 26. This is a life lesson to have unusually good results. Almost everybody that has an unusually good result has three things. Number one, they are very intelligent.

Number two, they worked very hard number three, and they were very lucky. It takes all three to get them on the list of the super successful. How can you arrange to have two or three episodes of good luck? The answer is you can start early and keep trying for a long time. And maybe you'll get one or two.

So having those three things is how you become ultra successful. It's intelligence, hard work. And getting lucky is what he is saying. So how do you make your own luck? You work at something for a very, very long period of time, and then maybe you'll have a few lucky outcomes. Now, this is a very powerful lesson for all of us, because it's not really fun going through that process to try to get to that point in time where we become very lucky.

So instead we have to work for longer periods of time to make our own luck. Less than 27. I think part of the popularity of Berkshire Hathaway is that we look like people. Who have found a trick. It's not brilliance. It's just avoiding stupidity. So again, he's talking about how he is not that intelligent, even though he's one of the most intelligent people that we're living.

But he's talking about, he's just trying to avoid stupidity. He's trying to avoid making stupid decisions, which we all can do with our money. We all can do with our business decisions. We all can do with our career decisions. Just avoid stupidity and try to stay on that right path. Number 28. This is an interesting one.

Wisdom acquisition is a moral duty. It's not something you do just to advance in life. People who are wise are going to avoid making terrible decisions and people who are wise are going to avoid doing things that might be harmful to other people. Wisdom is one of the most powerful things that you can have in life.

I truly, truly believe that. And you can look at King Solomon who was. Supposedly the wisest person to ever live and the richest person to ever live. If you would just as well for inflation now and King Solomon, who wrote the book of Proverbs in the Bible is one of the most wise people you will ever read about.

If you've never read the book of Proverbs, even if you're not a Christian, you can go read the book of Proverbs and it is filled with life wisdom that you can use day in and day out. And I think wisdom is one of the most powerful things that you can do. And Charlie is talking about this here. Now you've heard me talk about this next quote, number 29, a number of different times.

This is on your first hundred K your first hundred K is a B word. We're not going to cuss on this episode, but you got to do it. Munger said, I don't care what you have to do. If it means walking everywhere and not eating anything that wasn't purchased with a coupon, find a way to get your hands on 100, 000.

After that, you can ease off the gas a little bit. So we have a number of different episodes. If you never checked him out on why it is so difficult to get to your first hundred K and the real reason is because it takes so much more of your. Earnings to be saved in order to get to your first hundred K, such as your savings rate is really propelling yourself to that first hundred K.

And Charlie is talking about this here. This is for the folks who are just starting out with their money. Getting to that first hundred K is the hardest part. And so if you think your investments are not moving, or it feels like you're just not getting anywhere, this is why it's slower at the beginning.

And then it begins to compound. Lesson number 30, really powerful one. Show me the incentive and I will show you the outcome incentives run. The world, if you have employees, you have to incentivize those employees to make sure that they are doing the right thing through pay, through other incentives, through fulfillment.

If you have friends, you have to incentivize those friends to actually be your friend in your career. You have to incentivize people to hire you. You have to incentivize people to give you raises or promotions. Everything in this world revolves around incentives. Look for the incentive and that will show you the outcome.

Number 31. I love this one. The reason why we got into such idiocy in investment management is best illustrated by a story about a guy who sold fishing tackle. I asked him, My God, they're purple and green. Do fish really take these lures? And he said, Mr, I don't sell to fish. I love that one. That is one of my favorite, favorite little stories of all time.

And it just hits the nail on the head. This is one that I love that Warren Buffett talks about all the time and how you should buy businesses and how you should buy your stocks. Forget what you know about buying fair businesses at wonderful prices and instead buy wonderful businesses at fair prices.

So the better the business, the more likely it is it's going to be successful and you don't have to get some amazing home run price on that business. Instead, buying it at a fair price, making sure you have the right management in place and taking advantage of that is going to be really, really powerful thing.

Last one, number 33. Someone asked Charlie what it takes to be successful with your finances in life. It's so simple to spend less than you earn and invest shrewdly and avoid toxic people and toxic activities and try to keep learning all of your life and do a lot of deferred gratification. If you do all of those things, you are almost certain to succeed.

If you don't, You're going to need a lot of luck, and that is something I think that we can all read over and over and over again and think through on how wise that truly is. It's a simple quote that has so much more wisdom built into it, which is exactly how Charlie lived his entire life. Listen, if you want to learn more about Charlie Munger.

And some of his wisdom, there is a book called poor Charlie's almanac. And it is the book that he wrote. And it is one of the most powerful books that I have ever read. It is not a cheap book. In fact, it is pretty expensive. Let me look at how much it is on Amazon right now. But when I bought it, I think I bought it for 90 and it is a larger book.

So it's a pretty cool book to actually go through. It is a larger book that actually has a bunch of different life lessons inside of it. But if you get the original version right now, you can get on Amazon for 73 bucks. And it looks like they have any central version now for 22 bucks. It is worth every single penny to buy that book because it is filled with wisdom and one of the most powerful things.

There's also another book called Damn Right Seeking Wisdom. And it's all about Charlie Munger. And then there's one called Charlie Munger, the Complete Investor. All three of those books, I highly, highly recommend you will have life changing wisdom and advice inside of those books. Also, Charlie has a speech that will change your life.

And I want you to listen to this speech over and over and over again. If you have not before, there are shortened versions of this that I think will kind of pull the meat out of it. That will be really, really helpful, but it is called the psychology of human misjudgment. And this speech is life changing for me.

I listened to it over and over and over again, and it will show you why people are the way they are in the psychology behind it, really, really a powerful stuff. Listen. I hope you guys enjoyed this episode. I hope you guys learned a few things. I could have gone through a list. I have a hundred different quotes that I could have gone through.

Uh, these are just the ones that made this list specifically. And it is one where Charlie Munger and his wisdom has absolutely changed my life. He will forever be missed and be someone that lived a full life. He lived till 99 years old and it's something that. You got to go back. You got to listen to all of his stuff if you never heard of him because he will be someone who could be very, very influential in your life.

I want to thank Charlie publicly for everything that he taught me and may he rest in peace. Thank you guys again so much for listening to this episode. We'll see you on the next episode.