Tuesday, 05 December 2023 04:37

Charlie Munger: These ‘basic rules’ made me successful in life—‘with Warren Buffett, I had all 3’

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Charlie Munger died on Nov. 28 at age 99. These reflections on his life and career, which he wrote for CNBC Make It, are among his final writings.

One's journey to career satisfaction is not always linear. After graduating from Harvard Law School, I joined a well-regarded firm in California. I built a home and a family, and I worked hard for years.

Even so, I wanted to earn more than what a senior law partner could expect. I started investing in stocks, businesses and property development before starting a law firm with some of my colleagues.  

I spent many successful years at the firm, but I wasn't satisfied practicing law. I liked the independence of a capitalist. I liked figuring things out and making bets. I preferred making the decisions and gambling my own money. I usually thought I knew better than the client anyway, so why should I have to do it his way?

One evening, at a dinner party in Omaha, I was introduced to a fellow named Warren Buffett. Warren and I shared many ideas when it came to business, finance, history and investing. He persuaded me to quit the law at the earliest point I could afford to do so. We eventually agreed to go into business together, which turned out to be an incredibly good decision. 

I have three basic rules for career satisfaction that have always helped me. I believe they can help any young person evaluating a career decision. While meeting all three is nearly impossible, you should try anyway. 

1. Don't sell anything you wouldn't buy yourself.

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 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 and the deserved trust of the people they deal with.

Plus, there is huge pleasure in life to be obtained from getting deserved trust. Reputation and integrity are your most valuable assets — and can be lost in a heartbeat. 

2. Don't work for anyone you don't respect and admire.

You particularly want to avoid working directly under somebody you don't admire and don't want to be like. It's dangerous. We're all subject to control to some extent by authority figures, particularly authority figures who are rewarding us. Dealing properly with this danger requires both some talent and will.

I coped in my time by identifying people I admired and by maneuvering, mostly without criticizing anybody, so that I was usually working under the right sort of people. A lot of employers will permit that if you're shrewd enough to work it out with some tact.

Generally, your outcome in life will be more satisfactory if you work under people whom you correctly admire.

3. Work only with people you enjoy.

I've found that intense interest in any subject is indispensable if you're really going to excel. I could force myself to be fairly good in a lot of things, but I couldn't excel in anything in which I didn't have an intense interest or enjoy.

If at all feasible, you want to maneuver yourself into doing something in which you have an intense interest alongside people whose company you enjoy. 

Another thing you have to do is have a lot of assiduity. I like that word because to me it means: "Sit down on your ass until you do it." I've had marvelous partners, full of assiduity, all my life. I think I got them partly because I tried to deserve them, and partly because I was shrewd enough to select them, and partly because there was some luck. 

I have been incredibly fortunate in my life when it comes to these basic rules. With Warren Buffett, I had all three. 

Charlie Munger was Vice Chairman of Berkshire Hathaway, and Warren Buffett's closest business partner and right-hand man. As a legendary and pragmatic investor and active philanthropist, Munger was a Harvard Law graduate and was known for his wide-ranging wisdom across a multitude of disciplines — including psychology, economics, biology, history and physics. Munger served as a director of Costco Wholesale Corporation and as chairman of the Daily Journal Corporation. An abridged version of his book, "Poor Charlie's Almanack," is being released by Stripe Press on December 5, 2024.

 

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