It is the first weekend of May, and this is when Berkshire Hathaway holds its annual meeting. I was supposed to be in Omaha, Nebraska this weekend, but my travel plans and the in-person shareholder meeting was canceled due to the corona-virus outbreak. About 40,000 people attend the shareholder meeting every year. I have attended the in-person shareholder meeting in the past, and it was just an amazing experience. Over the past few decades, both Charlie Munger (96 years old) and Warren Buffett (89 years old) have shared some great investment and life lessons. In this week’s blog post, I will not be talking about any investment advice, but the life advice shared by Charlie and Warren. Here are the top 5 life lessons that have impacted me the most:
1. Wisdom Acquisition Is Important For Success
Both Charlie and Warren have said again and again that life time learning is crucial for success. Charlie Munger describes the importance of reading in his book Poor Charlie’s Almanack, where he says, “In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time–none, zero. You’d be amazed at how much Warren reads–and at how much I read.” Buffett says, “By the age of 10, I’d read every book in the Omaha public library about investing, some twice.” Warren and Charlie agree that it is not the IQ that determines a person’s success in life, but the person’s dedication to life time learning. Munger says that if you go to bed every night knowing something more than what you knew the day before, you’d come out far ahead in life.
During the USC Law School Commencement Speech in 2007, Munger said, “Marcus Cicero is famous for saying that the man who doesn’t know what happened before he was born goes through life like a child. That is a very correct idea. If you generalize Cicero, as I think one should, there are all these other things that you should know in addition to history. And those other things are the big ideas in all the other disciplines. It doesn’t help just to know them enough so you can repeat them back on an exam and get an A. You have to learn these things in such a way that they’re in a mental latticework in your head and you automatically use them for the rest of your life. If you do that I solemnly promise you that one day you’ll be walking down the street and you’ll look to your right and left and you’ll think “my heavenly days, I’m now one of the of the few most competent people in my whole age cohort.” If you don’t do it, many of the brightest of you will live in the middle ranks or in the shallows.” I have made it a habit to listen to audio-books or read physical books everyday. I read books about history, autobiography/biography, philosophy, religion, finance, economics, law, medicine, etc, and I simply enjoy this wisdom acquisition process. I would say that not having a TV or Netflix subscription definitely helps me stay productive since I read books or listen to audio-books in my free time.
2. Surround Yourself With Great People
Warren Buffett has said on various occasions that you need to associate with people better than yourself as you will move in the direction of people you associate with. Buffett says that you need to behave like the people you admire. Both Charlie and Warren love reading biographies and autobiographies as it allows them to live life through the lens of the people they admire. Charlie says, “I am a biography nut myself. And I think when you’re trying to teach the great concepts that work, it helps to tie them into the lives and personalities of the people who developed them. I think you learn economics better if you make Adam Smith your friend. That sounds funny, making friends among the eminent dead, but if you go through life making friends with the eminent dead who had the right ideas, I think it will work better in life and work better in education.“
In order to surround myself with great people and become friends with eminent dead, I read a lot of biographies and autobiographies. I have read biographies/autobiographies of Abraham Lincoln, John D. Rockefeller, Franklin Roosevelt, Teddy Roosevelt, Cornelius Vanderbilt, Carl Icahn, Warren Buffett, Charlie Munger, Alexander Hamilton, Elon Musk, Guy Spier, Benjamin Franklin, Andrew Carnegie, Paul Volcker, etc. It is refreshing to read through these books and see all the hardships faced by all these people, and how they persevered. By the time I finish reading the biographies, I consider these individuals my friends and mentors; I truly feel like I am surrounding myself with great, inspiring individuals.
3. Inversion
Inversion is a concept discussed extensively by Charlie Munger. Inversion is simply flipping the problem upside down. In the book Damn Right: Behind the Scenes with Berkshire Hathaway Billionaire Charlie Munger, Charlie says that it is not enough to think problems through forward; You must think in reverse, as the great algebraist, Carl Jacobi, often said, “invert, always invert.” While describing inversion, Munger says, “Look at it backward. What happens if all our plans go wrong? Where don’t we want to go, and how do you get there? Instead of looking for success, make a list of how to fail instead – through sloth, envy, resentment, self-pity, entitlement, all the mental habits of self-defeat. Avoid these qualities and you will succeed. Tell me where I’m going to die, that is, so I don’t go there.” Every time I am faced with a big question, I tend to negate it, and then I just have to steer clear of that negated question’s answer in order to get closer to my goal.
4. Envy, Resentment, Revenge, And Self Pity Are Disastrous Modes Of Thoughts
Warren Buffett has said multiple times that it is not greed, but envy that ruins the world. Charlie says, “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?” As described in the previous paragraph, all these traits – envy, resentment, revenge, and self pity – sets one up for failure. Munger says, “Life will have terrible blows in it, horrible blows, unfair blows. It doesn’t matter. And some people recover and others don’t. And there I think the attitude of Epictetus is the best. He thought that every missed chance in life was an opportunity to behave well, every missed chance in life was an opportunity to learn something, and that your duty was not to be submerged in self-pity, but to utilize the terrible blow in constructive fashion. That is a very good idea.” As outlined in the book Damn Right, Munger was almost bankrupt after his divorce, then he lost his 10 year old son suffering from Leukemia, then a failed cataract surgery left him blind in his left eye. Despite all these tragedies, Munger did not feel sorry for himself (self-pity). In fact, Munger had a desire within him to keep on going.
During my decision making process, I certainly look out for feelings of resentment and revenge, and I ascertain that I am not negatively influenced by these thoughts. As far as self-pity goes, reading biographies and seeing all the difficulties faced by successful people prevents me from feeling sorry for myself; All my mentors and eminent dead friends come to my rescue when I feel sorry for myself. Lastly, the best way to avoid envy, recognized by Aristotle, is to plainly deserve the success we get.
5. Learn From Mistakes
Charlie and Warren both agree that in order to succeed, it is crucial to learn from mistakes. As Munger points out, “One of the best ways to learn from mistakes is to learn from the mistakes of others. Learning from others’ mistakes is cost-free. Other investors lose money as well, so you don’t have to learn the same lessons with your own money.” Similarly, Warren has talked about learning from his past mistakes and changing his investment strategies throughout the years. The important thing is to learn from the mistakes, so that you don’t make them in the future. Warren Buffett echoes Munger’s thoughts by saying, “It is good to learn from your mistakes. It’s better to learn from other people’s mistakes.“
Munger says, “Of course, there’s going to be some failure in making the correct decisions. Nobody bats a thousand… it’s important to review your past stupidities so you are less likely to repeat them, but I’m not gnashing my teeth over it or suffering or enduring it.” As I read about various investors and the mistakes they have made along the way, I am less likely to repeat those failed strategies since I am aware of the repercussions. At the same time, if I venture off to a new path, and it leads to failure, then I am willing to learn from my mistake and move on. Furthermore, “learning from my mistakes” concept applies to my everyday life decisions. I truly believe that trying out new things, learning from your mistakes, and evolving is essential to succeed in life. Warren Buffett’s favorite song is My Way by Frank Sinatra, and I think that song does a great job of describing how one should go about living one’s life.
Hope you learned a little and found this blog post helpful. Charlie and Warren are my favorite mentors. We talked about Warren and Charlie’s life advises that have impacted me the most. As always, you can sign up for our free mailing list here. You can sign up for our paid subscription services here. Like us on our Facebook page here. Thank you!
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