How to Be Happy and Get Rich

I have been re-reading Poor Charlie’s Almanack over the past few days in preparation of my upcoming Mastermind course.

This is my fifth reading of this wonderful book, and it seems I am going through it for the very first time.

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 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 on the subjects of being happy and getting rich.

Get ready to be inspired. Prepare to be happy and successful.

Here’s Charlie Munger for you.

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.

Avoid evil, particularly if they’re members of the opposite sex.

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?

Avoid debt

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? Now inspire the tribe with the biggest idea you have read of Charlie Munger.

Don’t tell me you haven’t read Munger at all!

If you haven’t, and to twist one of Munger’s sayings, “You are living the life of a one-legged man in an ass-kicking contest.” 🙂