Charlie Munger 12 of 12
The truth is simpler and less glamorous.
I tried to save, I tried to invest rationally, and I tried to avoid doing stupid things. That’s it. The rest was time, and compounding.
Most people can’t accept that. They want a secret formula. They want short cuts, secrets, tricks, hacks. Sorry, there aren’t any.
The formula is so dull most people refuse to use it:
Spend less than you earn, invest the difference in something sensible, let compounding do its work, and wait longer than everyone else.
Do that for 50 years, and you’ll look like a genius, but you won’t feel like one along the way. You’ll feel bored. You’ll feel behind. You’ll feel like the world is passing you by. That’s why most people fail. They can’t tolerate boredom. I didn’t get rich because I was smarter than everyone. I got rich because I was more stubborn than everyone. I could endure years of sitting, waiting and ignoring the noise. It’s not brilliance, it’s endurance. And when the numbers got big, I didn’t let them change my behavior. I lived simply. I drove modest cars. I didn’t try to keep up with rich neighbors. I didn’t need a yacht to feel successful. I just needed peace of mind.
That’s another paradox, you don’t get rich by acting rich, you get rich by acting boring. You save when it’s hard, you avoid debt when it’s tempting, you sit still when it’s uncomfortable, then one day people look at you and say “Woah, how did you do it?” I’ll tell you how, I didn’t blow it, that’s all. I’ve said it before, if you avoid the big mistakes, the rest takes care of itself. You don’t need to swing at every pitch. You don’t need to predict the future. You just need to survive, let compounding work, and not screw up your own life.
That’s why I laugh when people ask me for motivational advice. Motivation fades. Discipline lasts. If you can build a system that makes saving automatic, stupidity hard, and compounding inevitable, you don’t need inspiration. You need patience. So, yes, I became a billionaire, but I never aimed for it. I just aimed for survival, rationality, and a decent nights sleep. The billions came as a byproduct.
And here’s the punch line. Overshooting is better than undershooting. If you save too much, nobody complains. If you save too little, it’s a tragedy. I didn’t overshoot because I was greedy. I overshot because I didn’t want to depend on anyone else. That simple paranoia about independence made me richer than I ever imagined. So if you want a formula, here it is:
Don’t aim to be rich. Aim not to be stupid, not to be dependent, not to be fragile. Do that long enough and you might just overshoot too.