5 Traits Are ‘Almost Certain To Succeed’ – Charlie Munger

In a 2019 interview with CNBC’s Becky Quick, Munger echoed advice from shareholder meetings and shared his secrets for a long and happy life. Here are five pieces of advice from Munger that undoubtedly contributed to his long life, financial success, and — most importantly — happiness.

1. Don’t overspend your income.

One key to success, according to Munger: “You don’t overspend your income.”

By living within your means, you can reduce stress surrounding debt, inflation and rising costs. I you are spending less than what you earn, you have a safety net if your expenses rise or your income drops. Plus, it frees up cash for investments and passive income generation.

2. Invest shrewdly

“It’s so simple to spend less than you earn, and invest shrewdly,” Munger told shareholders at one Berkshire Hathaway meeting.

“The big money is not in the buying and selling, but in the waiting,” he said.

He also advised that you should invest in businesses that virtually anyone can run. “If it won’t stand a little mismanagement, it’s not much of a business,” he said. However, don’t seek out businesses that are poorly run as a general practice: “We’re not looking for mismanagement, even if we can withstand it.”

3. Continue Learning

Munger had previously advised, “The game of life is the game of everlasting learning. At least it is if you want to win.” Munger also emphasized one of these best ways to gain knowledge: “In my whole life, I have known no wise people who didn’t read all the time — none, zero.”

4. Remain Disciplined

Hold on your principles. Don’t speculate. To achieve long term success, you need to be patient and do the right thing day by day and year after year.

5. Avoid Toxic People

While you want to seek out and surround yourself with reliable people, you also want to avoid the toxic ones, Munger advised. “A great lesson of life is get them the hell out of your life — and do it fast,” he told shareholders at one meeting. “If you do all those things, you are almost certain to succeed. If you don’t, you’re going to need a lot of luck.”

Charlie Munger’s Wisdom On House

For Charlie Munger, living in a relatively modest house wasn’t an accident — it was a conscious choice.

Munger, the billionaire investor and longtime business partner to Warren Buffett, at the age of 99. He’d previously discussed his rationale for living in the same California home over the past 70 years.

“[Buffett and I] are both smart enough to have watched our friends who got rich build these really fancy houses,” Munger said. “And I would say in practically every case, they make the person less happy, not happier.”

A “basic house” has utility, said Munger, noting that a larger home could help you entertain more people — but that’s about it. “It’s a very expensive thing to do, and it doesn’t do you that much good.”

Another drawback to owning a mega-mansion, he added: Such an ostentatious display of wealth could spoil his kids by encouraging them to “live grandly.” Munger had nine children across two marriages, including two step-sons and a son who died of leukemia at age 9.

“[Buffett and I] both considered bigger and better houses,” Munger said. “I had a huge number of children, so it was justifiable even. And I still decided not to live a life where I look like the Duke of Westchester or something. And I was going to avoid it. I did it on purpose … I didn’t think it would be good for the children.

As Munger alluded to, Buffett lives similarly: The 93-year-old billionaire bought his house in Omaha, Nebraska, for $31,500 in 1958, and has lived there ever since. Buffett’s quality of life would “be worse if [he] had six or eight houses,” he reportedly said at Berkshire Hathaway’s 2014 shareholder meeting.

Munger often preached the merits of living modestly, giving advice like “don’t have a lot of envy” and “don’t overspend your income.” In the Thursday interview, he credited his success and longevity to a long-held sense of caution and an ability “to avoid all standard ways of failing.”

“Avoid crazy at all costs,” said Munger. “Crazy is way more common than you think. It’s easy to slip into crazy. Just avoid it, avoid it, avoid it.”

Seven insights from legendary investor Warren Buffett

Warren Buffett is one of the world’s greatest investors and business leaders. Over the years the man who famously made today’s equivalent of over $50,000 as a teenager has uttered some pretty prophetic statements.

1. “It is not necessary to do extraordinary things to get extraordinary results.”
Buffett suggests that the best successes in the workplace can come from those who are consistent. Flashy ideas and grandiose plans only take you so far. In the end, the results speak for themselves.

2. “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Here, Buffett says that anyone’s reputation can quickly take a hit and to always act with integrity. Otherwise, a whole career can be ruined easily no matter the effort over the years.

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Human Weakness in Investment – Herd behaver

We almost cannot live without the Internet now. If you are not too young, you must remember the dot-com bubble in 1995–2001. Over the period, investors were crazy about companies in the Internet business and were ready to buy these companies at any prices. On the other hand, companies could cause their stock prices to increase by simply adding an “e-” prefix to their name or a “.com” suffix, which one author called “prefix investing”. By the end of the 1990s, the NASDAQ hit a price-to-earnings (P/E) ratio of 200. Many companies disappeared afterwards and many crazy investors, or rather speculators, in this dot-com rush lose their money.

How could this kind of crazy thing happen repeatedly in history? It’s herd behaver at work.

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Human weakness in investment –incapable of self-reflection

There is a saying that “love is blind”. This means a person in love would not be able to see any imperfection in the lover. This is maybe an extreme case. However, people do have the tendency of refusing to change their position when the relevant situation having been changed, or have bias on anything against whatever they initially believed in.

For example, a boy was brought to the same church by his parents frequently, he would not only mostly likely believe in the same religion when he grows up, but also strongly reject any other religion or atheism.

The same thing happens in stock market. When people, no difference being individual investors or institutional investors, already have a long position in the market, they tend to collect any relevant information, analyst it and present it in a way to justify that the market will go up further. The same kind of people also likely has a love affair with the company, of which they hold shares, and also with the relevant industry. They reject any information they don’t like, just like a person in love.

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Steve Jobs Stanford Commencement Speech 2005

I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I’ve ever gotten to a college graduation. Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories.

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

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Business Owner VS Share Holder

Now most of people know who Warren Buffett is. However, few really believed that a share holder of a public company is practically a business owner. To many people, including entrepreneurs and financial professionals, shares are papers exchangeable for cash. They buy shares simply for the hope of selling it at higher prices later. That’s why when people talk about shares they often raise questions like these:

Why do you think the price will go up (or down) for XYZ stock?
Is this the bottom of the market now?
Has ABC industry a good prospect in near future?
Shall I sell the shares of XYZ Company, when its share price goes down more than 8%?
Will there be a bull (or bear) market in the later half of the year?

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Support Google’s stand

We strongly support Google’s decision not to accept Chinese censorship of searches made on its system in China. Doing the right thing is the most important thing for people who are not struggling for their survival, especially for rich people, because adding a zero to their earnings doesn’t make a lot of differences to a millionaire or a billionaire, unless he is lost in the money world. Cooperating with a government who deprives its people of rights of free speech and actively participating in the action is not just a business, but a crime!

Warren Buffett’s lesson about true success

In 2006, Warren Buffett pledged to give away almost his entire fortune to charities. He is adamant about not funding monuments to himself – no Warren Buffett buildings or halls.

He says, “I know people who have a lot of money. And they get testimonial dinners and hospital wings named after them. But the truth is that nobody in the world loves them. When you get to my age, you’ll measure your success in life by how many of the people you want to have love you actually do love you. That’s the ultimate test of how you’ve lived your life.”

Isn’t that interesting how a multi-BILLIONAIRE says NOTHING about money in his definition of success?

And yet, how much time do most of us spend obsessing about making more money and all the things we want to do with that money when we make it?

Bill Gates and Warren Buffett on Success

In 2006, the two stood before business students at the University of Washington to share their personal philosophies about success.
(The following conversation is an excerpt of SkyQuestCom’s Master Channel January Highlight)

How do you define success personally?

WARREN: Well, I can certainly define happiness. Because that’s what I am. (Audience laugh) I get to do what I like to do every single day of the year and I get to do it with the people I like. I don’t have to associate with someone who causes my stomach to churn. (Audience laugh) And the only thing in my job I don’t like, and it only happens in about 3 or 4 years, is that occasionally I have to fire somebody. I don’t like that. It is the only thing, other than that, I tap dance to work.

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