If I were to rank the books that changed my life, Poor Charlie’s Almanack would be right up there. Even after reading the book a few times, every time I turn its pages, I can feel a sense of wonder and amazement at the immense wisdom these pages carry.
Unlike what many people think, this book is not a ready reckoner on how to become a successful investor. In fact, it’s much more than that.
It’s a book on how to live a happy, sensible and rich life and in the process become a better thinker and investor. As you read through the book, some of Charlie Munger’s ideas will inspire you, and some will make you uncomfortable. But all will challenge you to think outside the box.
The third chapter of Poor Charlie’s Almanack captures “Mungerisms”, where Munger dispels hundreds of ideas on subjects ranging from life, investing, academia, financial engineering, accounting, money management business, and managements.
Here are a few of those ideas I have pulled out verbatim about being happy and getting rich. These ideas have inspired me for years, and I am sure these will inspire generations of people that read this book in the future.
How to Be Happy and Successful
If all you succeed in doing in life is getting rich by buying little pieces of paper, it’s a failed life. Life is more than being shrewd in wealth accumulation.
Remember that reputation and integrity are your most valuable assets – and can be lost in a heartbeat.
A lot of success in life and business comes from knowing what you want to avoid: early death, a bad marriage etc.
Just avoid things like AIDs situations, racing trains to the crossing, and doing cocaine. Develop good mental habits.
If your new behavior earns you a little temporary unpopularity with your peer group, then the hell with them.
Avoid working directly under somebody you don’t admire and don’t want to be like.
How to Get Rich
Spend each day trying to be a little wiser than you were when you woke up. Discharge your duties faithfully and well. Step by step you get ahead, but not necessarily in fast spurts. But you build discipline by preparing for fast spurts. Slug it out one inch at a time, day by day. At the end of the day – if you live long enough – most people get what they deserve.
It’s not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it – who look and sift the world for a mispriced bet – that they can occasionally find one.
Be a Learning Machine
This is really crucial: Warren [Buffett] is one of the best learning machines on this earth. The turtles who outrun the hares are learning machines. If you stop learning in this world, the world rushes right by you.
Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day.
I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.
Reduce Material Needs
Most people will see declining returns [due to inflation]. One of the great defenses if you’re worried about inflation is not to have a lot of silly needs in your life – if you don’t need a lot of material goods.
Beware of Envy
If you are comfortably rich and someone else is getting richer faster than you by, for example, investing in risky stocks, so what? Someone will always be getting richer faster than you. This is not a tragedy.
Envy is a really stupid sin because it’s the only one you could never possibly have any fun at. There’s a lot of pain and no fun. Why would you want to get on that trolley?
Once you get into debt, it’s hell to get out. Don’t let credit card debt carry over. You can’t get ahead paying eighteen percent.
How to Find a Good Spouse
What’s the best way to get a good spouse? The best single way is to deserve a good spouse because a good spouse is by definition not nuts.
Feeling inspired? Want to get even more inspired? Pick up your copy of Poor Charlie’s Almanack and read now. If you haven’t read this book, to twist one of Munger’s sayings, “You are living the life of a one-legged man in an ass-kicking contest.