In this post you’ll find a few of the lessons I learned from Charlie Munger that you can apply today to your life and business.
Great minds have the uncanny ability to lay down ideas that when applied have the power to bring out the best in us. Some great minds are not very popular, but that doesn’t mean that they don’t have something to say/teach that would be of use for the ones who want to learn.
The application of what we learn is certainly more important than the learning process itself, but for one to be able to apply great ideas, one needs to know what those ideas are in the first place. Usually great ideas come from… well, great minds, and one of the great minds we’ll be talking about on this post is the legendary investor and businessman: Charlie Munger.
Lessons I learned from Charlie Munger
Charlie Munger is one of those figures who unlike his partner Warren Buffet is not known by the mainstream public. I like to compare him with great people like Issac Newton and Tesla, who although is greatly respected on their fields of operation, they are not as popular as they should. When we think of genius we think immediately of Albert Einstein, when Einstein himself looked up to Newton. When we think of great investing minds/thinkers, the general public if anyone thinks of Warren Buffet, when warren buffet himself has more than once demonstrated his admiration to his partner. Below are a few lessons I learned from Charlie Munger.
1. Always keep learning
Among all pieces of advice I’ve ever had, this is probably the one that had the greatest impact in my life than any other. The idea that by growing intellectually one has the power to completely change his life is obvious to most of us, but still underrated. As he once said: ” If you keep learning all the time you have a huge advantage”, and one of the many advantages that comes from continuous learning is the fact that most people simply don’t do it. Knowledge is free these days, but still the millions of dollars spent on building new libraries are partially wasted because people don’t like to read. So, something as simple as a book or two a month can get you a long way ahead of the competition.
A good life is usually the one in which one is able to tackle problems efficiently. The inability to solve the day to day problems is one of the reasons why we often see success in some areas of our lives and failure in others. When you gather a more broad repertoire of knowledge you simply become better at solving the problems life throws at you every day.
2. To get what you want you need to deserve what you want
After the importance of learning, the second most important piece of advice I got was to always try to deserve what you want. It’s easy to attribute the success of others to some sort of lucky destiny that we, for some reason don’t have. As the times change, we are taught to believe that if we don’t have what we want is because somehow, someone is not letting us. It’s common now for adults to blame their parents and family for their lack of commitment to their goals as opposed to themselves. Charlie Munger brings us to the idea that the ones who get what they want are usually the ones who deserve it. As the old saying goes: ” you can fool some people some of the time, but you can’t fool all the people all the time”. When you deserve what you want or have, two things happen. The first is that you start looking for ways to bring more value to the world as a way to getting what you want, and (2) when you do become successful, there is no fear of loosing it because you earned it.
As he once said: ” You want to deliver to the world what you would buy if you were on the other end”.
3. Know the edge of your competency
As much as we would like to believe that we can do anything we set out to do, and people keep telling us to never be afraid of doing anything, it is also important to know how much we really can do at a given moment. Here Charlie Munger advises us to have a clear and unbiased picture of our abilities and limitations.
Humans have what goes by the name of excessive self-regard, which is in simple words, the tendency for us to overestimate our own abilities. Most of us think they are above average, which is mathematically impossible, and so we get caught up in the habit of always misreading our own abilities. Maybe because that’s the new and rising culture of the planet, or maybe because we’re just wired that way. Whatever it is, it usually does more harm than good.
Only by knowing what we can and cannot do, is when we can finally not only improve ourselves, but also avoid most of the headaches that come when we tell people that we can do the things we in fact can’t. By knowing the edge of your competency you can also learn how to make the best out of it. Just in the same way that scientists say that willpower is limited and that we should schedule the most important tasks to the beginning of the day, by knowing our limitations in general, gain the freedom to do what we can, and delegate what we can’t to the ones who can.
Summary
These are just a small part of the set of ideas Charlie Munger came up with. If you want to, learn more about him and his ideas(and you should), one amazing reading is the book: Poor Charlie’s Almanack.
It is all about knowledge and experience 😉
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