He’s an American business magnate, lawyer, investor and philanthropist. He’s vice chairman of Berkshire Hathaway the investment company chaired by Warren Buffett. He has a net worth of 1.3 billion dollars. He’s Charlie Munger and here are his top ten rules for success.
Charlie Munger’s Top 10 Entrepreneurship Rules For Business and Success
Rule #1: Always Keep Learning
The other great secret is that we’re good at lifelong learning. Warren is so much better in some ways in his 70s and 80s than he was younger that it’s almost awesome. If you keep learning all the time you have a huge advantage. And we both just like it.
Rule #2: Deserve What You Want
Well luckily I got at a very early age the idea that the safest way to try and get what you want is to try and deserve what you want. It’s such a simple idea it’s the golden rule so to speak you 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 lawyer or any other person to have by. And by and large the people who have this ethos when in life and they don’t win just money, just honors and emollient once they win the respect, the deserved trust of the people they deal with.
And there is huge pleasure in life to be obtained from getting deserved trust. And so and the way to get it is to deliver what you’d want to buy if the circumstances were reversed.
Rule #3: Know The Edge Of Your Own Competency
One of these guys at the Berkshire meeting from one of the foreign publications said quite a couple of guys in a little place in Omaha do so much better than all these powerful minds and great institutions.
And I said, “Well I think Warren and I know “the edge of our competency better than other people do.” And that’s humility and an umbrella sense and that is a very important thing to know.
I say over and over again it’s not a competency if you don’t know the edge of it. You were a disaster if you don’t know the edge of your own competency.
Why I’m frequently says I’d rather deal with a guy with an IQ of 130 who thinks it’s 125. Than the guy with the IQ of 180 who thinks it’s 200. That second guy will kill you. And and so it is very important to know the edge of your own competency.
Rule #4: Be A Survivor
It’s not my nature when you get little surprises as a result of human nature to spend much time feeling betrayed. I’m always want to just put my head down on it just so I don’t allow myself to spend much time ever with any feelings of betrayal.
So you’re asking the wrong person because of a if some flickering idea like that came to me I’d get rid of it quickly. I don’t like any feeling of being victimized I think that’s a counterproductive way to think as a human being. I am not a victim I’m a survivor.
Rule #5: Practice The Right Approach
I listened in law school when some wag said a legal mind is a mind that when two things are all twisted up together and interacting it’s feasible to think responsibly about one thing and not the other. Well I could see from that one sentence that that was perfectly ridiculous and it pushed me further into my natural drift.
Which was into learning all the big ideas and all the big disciplines so I wouldn’t be a perfect damn fool who was trying to think about one aspect of something that couldn’t be removed from the totality of the situation in a constructive fashion.
And what I noted since the really big ideas carry 95% of freight there wasn’t at all hard for me to pick up all the big ideas in all the disciplines and make them a standard part of my mental routines.
Once you have the ideas of course they’re no good if you don’t practice, if you don’t practice you lose it. So I went through life constantly practicing this Malo disciplinary approach.
Well I can’t tell you what that’s done for me. It’s it’s it’s made life more fun, it’s made me more constructive, it’s made me more helpful to others, it’s made me enormously rich you name it. That attitude really helps.
Rule #6: Understand What You Are Doing
We have to deal in things that we’re capable of understanding. And then once we’re over that filter we have to have a business with some intrinsic characteristics that give it a durable competitive advantage. And then of course we would vastly prefer a management in place with a lot of integrity and talent.
And finally no matter how wonderful it is it’s not worth an infinite price. So we have to have a price that makes sense and gives a margin of safety considering the natural vicissitudes of life. That’s a very simple set of ideas and the reason that our ideas have not spread faster is they’re too simple. The professional classes can’t justify their existence if that’s all I have to say.
Rule #7: Invest In Trust
We have this system where we translate very trustworthy people and give them enormous trust. And as they practice that trust they get more confirmed in being trustworthy.
And eventually we’ve got this seamless web of trust which is incredibly efficient and very useful. And by the way this is not just my doctrine there’s a doctrine economics that tries to explain why firms come into existence.
And firms come into existence because a lot of people who trust one another operating within a firm are more efficient than they would be if they were a bunch of independent proprietors.
Rule #8: Know All Of The Big Ideas
I’m really following a very key idea of the greatest lawyer of antiquity. Marcus Tullius Cicero and Cicero is famous for saying a man who doesn’t know what happened before he’s born goes through life like a child.
That is a very correct idea of Cicero’s and he’s right to ridicule somebody so foolish as not to know what happened before he was born. But 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 and all the other ones. And it doesn’t help you just to know them enough so you could prattle 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 lattice work 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 look to your right and left you’ll think, my heavenly days I’m now one of the few most competent people of my whole age covert.
Rule #9: Swim As Competently As You Can
Where have I have not made our way in life by making successful macroeconomic predictions and betting on our conclusions. Our system is to swim as competently as we can and sometimes the tide will be with us and sometimes it will be against us.
But by and large we don’t much bother with trying to predict the tides because we plan to play the game for a long time. I recommend to you all of exactly the same attitude.
It’s kind of a snare and a delusion to outguess macroeconomic cycles. Very few people do it successfully and some of them do it by accident. And the game is that tough why not adopt the other system of swimming as competently as you can and figuring that over a long life you’ll have your share of good tides and bad tides.
Rule #10: Don’t Submerge Into Self Pity
Life will have terrible blows, horrible blows, unfair blows. It doesn’t matter and some people recover and others don’t. And and there I think the attitude of 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 and construct a finish.
Thank you guys! I made this because Dom Aviation channel asked me to. So if there’s a famous entrepreneur that you want me to profile next leave it in the comments below and I’ll see what I can do.
I’d also love to know which of Charlie Munger’s top ten rules had an impact on you the most. Leave it in the comments below and I’m going to join in the discussion. Thank you guys so muc, keep to believe, and I’ll see you soon.