10 Things I Learned from Charlie Munger

What does it mean to be a ‘billionaire’

I had the privilege of meeting many highly successful people in my travels. Many of them were billionaires. Today, we throw that term around with frivolity, and the overexposure has made it seem “simple” and “common.” I’m not here to argue the benefits of wealth or critique wealth disparity—that’s a discussion for another time. My goal here is to share what I’ve learned on my journey to create great value and great wealth. As I said before, I am technically already a billionaire, but only in Australia (thank you, exchange rate). My ongoing journey, though, is to become a billionaire in America. While I am not money-driven, I am driven by creating value, achieving success, and pushing myself. My field of battle just happens to be in business, and financial success happens to be a scorecard.

Billionaires. So, how many of them are there? As of the last count, there were 3,194 in the world (and that was a year or so ago—there are probably a few more now). America has, by far, the most billionaires (around 813), with China in second place with about 400. Despite its challenges (real or perceived), America continues to be the bastion of capitalism. Say what you want about political systems, but after having lived in communism, I can tell you—democracy is still the best way to go! Interestingly, 67% of billionaires are self-made; the rest inherited their wealth. Among the top 10 wealthiest, most are self-made—a remarkable achievement within one generation.

But how much is a billion dollars? Here’s an amazing stat: if someone gave you a million dollars and told you to spend $1,000 a day, you’d run out in three years. If you had a billion dollars, it would take you 2,740 years to spend it. Another way to think about it: if you’d been spending $1,000 a day since the day Christ was born, you’d still have a ton of money left over!

It’s a lot.

But you don’t have to be a billionaire; you can be a high-net-worth individual (HNWI). Findings from the CSRI’s sixth annual wealth report suggest there are 123,800 ultra-high-net-worth individuals worldwide, defined as those with a net worth exceeding US $50 million. Of these, 44,900 are worth at least US $100 million, and 4,500 have assets above US $500 million. And there are 8 billion people in the world! Think about the odds of reaching any of these levels!

The point is, it’s hard, and it is still a remarkable achievement. Regardless of what social media may portray, it is still a hard and remarkable feat. But it can be done, and as the old saying goes, “Shoot for the stars, and even if you miss, you will land on the moon.”

The goal is not necessarily to reach a billion, but rather to learn how others have done it and apply it to yourself. This is simply my journey and what I have learned from some of these remarkable people.

There are Different Types

The first thing I’ve noticed about these people is how different they all are. There is no “look,” no uniform way they act, no outward physical characteristics. Some are short; some are tall; some are incredibly fit and pour all their money into longevity and wellness, while others have habits that make you wonder how they are still alive. It’s all different.

Some are incredibly showy. They have yachts, super fancy cars, own sports teams, dress impeccably, and, from far away, you know they’re billionaires. Others are so humble and “simple” that you would never guess they’re wealthier than the average person next door.

This story is about one such billionaire, Charlie Munger. Simple in all things (except his mind and business), humble, and gracious. The complete opposite of some of my other billionaire friends, he is the small-town, quiet billionaire. In fact, if it were not for his partnership with Warren Buffet, no one would ever know his amazing wealth.

As different as these people are, there are a couple of characteristics they all share. In fact, there are three. First, they are obsessed with their business—not just passionate or “really into it,” but obsessed. Sit down with any of them and get into a conversation about their field, and it will go on for hours. Passion fades—obsession endures. Second, they are curious. Many of these people ask me as many questions as I ask them. They’re curious about others and about the world around them in general. It’s hard to learn if you’re not curious. And third, they make no excuses. This might be the biggest one. Many people I’ve met who don’t seem to grow or improve can’t help but blame someone or something else. I would be richer (thinner, smarter—insert whatever you want) if it weren’t for X (insert excuse here). Most successful people have failed, and they fully own that. And they’ve come back from it. And most of these people do not come from privilege. Yes, most will admit they’ve been lucky, but the lack of excuses is what really strikes you. It’s the old red car theory (that’s another story). As a guy I admire, Cameron Hanes, says in his great book Endure, “No one cares; work harder.” You had a bad upbringing, your parents weren’t there, bad things happened to you, you came from a communist country, and your dad was in jail all the time—no one cares. Work harder.

How I Met Charlie

When I lived in LA, I was obsessed with SoulCycle—there are some amazing instructors, and I loved the intensity and the community of it. No one really cared about what anyone else did; our common bond was the class. One day, one of my friends in the class told me his boss is a big fan of Shark Tank and wanted to meet me. I kind of let it go—didn’t think much of it at the time. A few weeks went by, and he said, “My boss is actually Charles Munger. He’s a big fan of Shark Tank and you and would love to meet you.” My first reaction was, “Sure—you work with Charlie.” So I let it go again. A few weeks later, my friend asked again. This time, I figured it must be real, and since I would love to meet Charlie, I said yes, and we arranged a meeting.

I hopped in my car and started driving. I found the address but figured I must have written it down wrong, because it was an old house from the ’50s. Nice area, but the house was modest. So I drove around the block again, unsure what I was expecting but certainly expecting something more.

I finally stopped and went in, and indeed it was the right house. It turns out Charlie had bought the house in the ’50s and stayed there the entire time. Houses, showmanship, and “flash” were not Charlie’s thing—he was a simple, humble, and brilliant guy.

I walked in, and that was the first time I met the incredible Charles Munger.

Why did Charlie want to meet me?

Of course, I had to know—why in the world did Charlie want to meet me? So, naturally, I asked him. His answer: “You seem like the sensible, nice one on the show—and I love the show.” He called it “great entertainment” about one of his favorite topics: investing.

Being called sensible by the great Charles Munger was an incredible compliment. He wanted to meet me for no other reason than his insatiable appetite for business, people, and an extraordinary curiosity. One of his partners happened to mention to him that they do SoulCycle with me, and he simply said, “Ask him if he would come over and have lunch with me.”

And that’s how my friendship with him started. Before COVID, I would go over to his house and just talk—about anything and everything. He was one of the few people who asked more questions than I did. During COVID, we did Zoom calls. He and his team wanted him to stay sharp, and a bunch of people like me would call him regularly just to chat.

As I get older and worry about my own longevity, I realize how vital this is. An occupied and curious mind is a young mind. Charlie was in his 90s but extremely sharp mentally. It’s important to surround yourself with people who inspire you, keep you sharp, and keep you curious about this incredible thing we call life.

As humble as he was, he rarely talked about his success. The one thing he was proud of, though, was his book Poor Charlie’s Almanack: The Wit and Wisdom of Investing. In fact, he gave me a signed copy at our first meeting. I’ve moved houses so many times that I’m not sure where it is, but I very much want to find it.

This is my story of the things I have learned from the incredible Charlie Munger. He passed away earlier this year. I miss talking to him. He was a great man.

Be Humble

The first thing you notice about Charlie is the lack of pomp and circumstance. His house was simple—nice but simple. He (well, his staff, and there was only one person, as Charlie was in a wheelchair at this point) made me lunch. I forget what we had the first time, but it was a very simple sandwich (I think it was cheese and tomato on white bread). The decorations were simple. He wore a suit and tie—I suspect he wore that every day. I think that’s just the way he was. It was a sign of respect to him—not for himself or to show off, but for the people he met. He came from a time when serious people wore suits.

Humble and simple.

Don’t judge a book by its cover. Wealth does not always express itself outwardly in the way you’d expect. Never assume that the person with the flashiest toys is the richest. In fact, in my experience, quiet wealth is usually the biggest wealth. If you need to tell people how rich you are, in general, you are probably not that rich.

Charlie was a simple guy, and none of that outward stuff mattered to him. Having said that, everyone has their thing. Mine is cars, toys, and homes. But there are other things that simply don’t do it for me the way they do for others. Don’t judge others by what you see—quiet wealth is usually the most powerful wealth.

Lesson

Don’t judge others by the toys you see. Great wealth tends to whisper, not shout.

Use Money as a Resource, Not as an End Goal

In all our discussions about wealth and money, I don’t remember him ever saying he wanted to make money just to “be rich.” It took me a while to figure that out. He always talked about making money as part of a larger goal. One business would make money, and they’d use that money to buy another business, and so on.

I realized that I talked about money as an end goal, not as part of a process. Charlie: “We wanted to buy an insurance company as we saw an opportunity to disrupt the insurance business.” Me: “I want to make money to be rich.” I was thinking and talking about money as an end goal.

And it’s not. I don’t think of money that way anymore, and it has nothing to do with being rich or wealthy or any of that. It’s about how you think about money. The funny thing is, as an immigrant, we never, ever talked about money. I used to ask my parents, “How much money does that person make?” or “What do you think that house costs?” and they would tell me, “Don’t talk about money—it’s rude.” Honestly, I think my parents would have rather talked about sex at the dinner table than money!

It messed up my relationship with money, and it took me a long time to change how I think about it. Money is not just money—it’s simply a tool. If you want to build a house, you need tools, hammers, saws, etc. If you want to build the house of your dreams, you need to know what tools you need and how to use them.

Life is the same way. If you want to build the life of your dreams, you need to know how to use money (one of the keys to a great life) and how to use it well. You need to know how to invest it, leverage debt, build assets, etc. This applies to everyone. Even if you have little, you need to understand good debt versus bad debt and how to get out of debt. Without the knowledge of how to swing a hammer, you can’t build a great house—and without the knowledge of money, you can’t build a great life.

Lesson

Money is not an end goal—it’s a tool to be mastered to build the life you want.

Curiosity Feeds the Mind—and the Wallet

Charlie was a legend, and I have to admit, I was in awe when I first met him. I had a million questions I wanted to ask him—about life, investing, and many other things. I have a habit of asking people a ton of questions, sometimes to the point of making them uncomfortable. I have a natural curiosity about life and people, and I find people fascinating. And I don’t just mean powerful, wealthy people; I mean all people. A good friend of mine who is a pastor once told me something that stuck with me: “You will never find anything in life as fascinating as another human being.” And I think that is very much true.

But before I had a chance to ask Charlie a single question, he started asking me questions—about me, where I came from, about Shark Tank, and how the show worked (he loved the show). He asked me a lot of questions.

I learned a lot from that—not the least of which was that the key to good answers is great questions. Over our many meetings, I eventually got to ask him many questions, but he always started, and I got the feeling that Charlie had always been this way—naturally curious about people and the world around him.

Lesson

Curiosity didn’t kill the cat, but it made him richer and more informed.

Life is Long, Prepare

When I first met Charlie, he was in his 90s. Just think about that for a second—in his 90s. He passed away only 34 days before his 100th birthday! Life is long. At the time, I was in my 50s and feeling old. I met Charlie and realized he was 40 years older than I was. At first, it didn’t seem like much, but then I thought back 40 years—I was 10. I was a child—and could barely remember 10, and barely remembered most of the things that happened since then. It was a long time, and many, many years. When I looked forward to 40 years or even 20 years, I realized that is a lot of time.

As someone once said to me, “You are never going to be younger than you are right now, today.”

In some ways, life is very short, and you need to get going, but in many other ways, life is long. You have more time than you think. One of my favorite sayings is “constant, forward momentum.” Think about each of those words: constant. Not one time, not a short burst of energy or motivation (yes, sometimes you need to burst), but success is constant—doing the little things every single day. Forward. That does not mean you always move forward—sometimes bad things happen, and you move backwards, or you get knocked down. I went through two years of crippling inertia. I barely moved forward. Every day I got knocked down, and just when I thought it was over, I got knocked down even more. But I endured, and even though many days life was pushing against me and pushing me backward—in my mind, it was always forward, forward, forward. Some days it was feet, some days miles, and some days it was a single inch. But always forward. And momentum. Life is energy—as they say, life is a vibe. I am on a big training binge now, working with an amazing trainer. I’m trying to get lean and build strength. One of the things I have learned from him is that it’s much harder to do a full pull-up or push-up, one at a time from a dead stop, than doing many in a row. Why? Momentum—once you get going, you build a certain amount of momentum that propels you forward. But if you stop between each pull-up, and hang your body dead still and then do a pull-up and do this every time—it’s super hard. It’s like starting over every single time. Your body carries no momentum from one to the other. It is the same in life. Momentum carries you forward. Now, the thing about momentum—it cannot discern good from bad. Bad habits can accelerate, and so can good ones. Even when the world couldn’t see what I could become, even when people seemed to go out of their way to tell me I would not amount to anything, I always believed the small steps would build into big ones, and that momentum would carry me forward.

Constant, Forward, Momentum.

Lesson

You have more time than you think—constant, forward, momentum.

Buy a Business Run by Idiots

In one of our meetings, I asked Charlie, off the cuff, “What is the best kind of business to buy?” I was expecting an answer around certain categories, some financial parameters around certain margins or costs, but instead, without thinking, he said, “Buy a business that can be run by an idiot.”

Charlie obviously knew how hard it was to run a business and how complex it could be, but he and Warren looked for businesses that could be run by an idiot. They wanted a business that was “easy” and so well set up that almost anyone could run it. They believed they were smarter than the average person and could add some guidance and capital to make it better, but the foundation had to be a great business that someone had built to the point where it was operating smoothly. Obviously, this was hard, which is one of the reasons they bought so few companies.

As Steve Jobs once said, “It is incredibly complex to make things simple.” Simple is hard, and operating a business so that an idiot could run it is very hard. The point is, a business based on the talent of a handful of people is a difficult investment because if those people walk out the door, you are in a lot of trouble. They liked businesses that could continue to run. This is one of the reasons why he didn’t invest in tech for so many years. Tech is based on talent and on technology that can change—and does extremely quickly. Soda, insurance tends to be constant. The other thing they liked about more traditional businesses is the massive barriers to entry. Soda—Diet Coke—is a distribution business all over the world, with a massive infrastructure. Disrupting the entirety of that business would take many, many years and be extremely difficult. If the head of Coke went away, Coke would continue. If Steve Jobs wasn’t at Apple, there would be no modern-day Apple. High levels of talent drive it, and tech is a business constantly being disrupted by someone in their garage.

Now, that’s not to say you shouldn’t start a talent-driven business. As a founder, if you are in a business that is highly talent-driven and you can create an environment with better talent, you have a massive competitive advantage over others (regardless of whether they are an incumbent).

But it is something to keep in mind. For an investor, if your business is based on you or a small group of people with high talent, it’s going to be hard to sell, potentially. You don’t want to always be the smartest person in your business—investors, generally, want to buy your business, not you.

Lesson

Build a business that can be run by an idiot—investors like ‘simple’.

Investors Are Not Operators—Know Which One You Are

Charlie was a great investor. I am an okay investor; I think I’m a better operator. It is good to know what you are. Charlie (and Warren, who thought very similarly and shared a great partnership and friendship) were very clear that they were investors—they put capital to use. They bought businesses to deploy capital and get more capital back. They were famously long-term investors, but in all of that, they were very clear they were not there to operate.

It’s a different model. It may not work for everyone, but it worked very, very well for them. They didn’t buy businesses to change them; they rarely made management changes, and famously, many of their businesses, many years later, still had the same people running them as when they invested in them. They didn’t want to invest in a business to fix it or come in and tell the team how to run it.

They didn’t operate; they invested.

Having worked with equity, I know this too well. It’s hard, I think, for many investors. Many investors assume that great amounts of capital make them great operators. They assume that more data from more businesses makes them better operators. They assume that knowing what “good” looks like makes them able to make “good” happen.

As Elon Musk once said, it is better to take an investment at a lower value from an equity partner you like and get along with than a higher one who is going to want to run your business. There’s a reason you built it.

Investors want to be operators, and many operators want to be investors. It’s good to know where your strength lies. Charlie was an investor—he bought great businesses that were well-run and let the team continue to run them.

Lesson

Stay in your lane. Are you an investor or an operator?

It’s Better to Pay a Good Price for a Good Business Than a Bargain Price for a Bad Business

By the time I met Charlie, I had made 13 acquisitions in my business. Some of them were very small ($1 million businesses), and some were larger ($40 million). I had become pretty good at it, especially considering that, at that point, I owned 100% of my business. As my business grew, it required more and more capital, and I was funding it on my own. We got to hundreds of millions in sales, so it was becoming challenging (one of the reasons I eventually sold to equity). I had to buy businesses on an earn-out—meaning a smaller amount of cash up front and a chance for the owners I was buying from to earn more over time. That requires a lot of faith on their part.

By the time I met Charlie, I had learned that it is much better to pay a good price for a good business than a great price for a bad business. Charlie was all about that—they did not buy bad businesses. They did not look for bargains or a business they could buy at a discount. They were more than happy to pay a good price for a great business. Their view was that they wanted to pay a good price for a good business that was on its way to becoming greater, rather than a business that was declining that they could get at a great discount.

Keep in mind, he was not an operator. They did not look for bargains in the discount bin that they could make better. They did not come in to operate—they did not want to turn things around. His belief was that a boulder rolling downhill was almost impossible to stop. A declining business, at any price, was not what they were after.

They were not afraid to pay a good price. I had learned this lesson. I always paid a fair price (as fair as I could afford) and tried to buy a good business that I saw even more potential in. Getting a discount or a bargain was not that important to me.

Now, keep in mind the big difference between me and Charlie was that I was an operator, and he was the classic investor.

Lesson

It’s better to pay a good price for a good business than to get a bargain on a bad business.

It’s Hard to Be Simple

I’ve touched on this before, but it is a very important point. Most of my conversations with Charlie were simple. He was obviously a super-smart guy who understood investing and financials on a level I didn’t, but most of our conversations about business and leadership were pretty simple concepts. He loved to break down things into simple ideas and concepts. He believed that people tended to overcomplicate things.

Simple is hard. I learned this from him, and it stuck with me for many years. I used to go to meetings where people were explaining their business to me, or my team was telling me how we were going to go after some segment of the market. If the answer or explanation was highly complex, it tended not to be such a great idea. Simple usually works.

People tend to overcomplicate things, thinking that the idea is the most important thing. Charlie knew that simple is hard, and simple ideas are usually the best—it’s the execution that is hard.

There is an old saying in business: the KISS concept—Keep It Simple, Stupid. It is very much true.

Lesson

Simple is hard but usually the best path forward.

Money Is Not a Ferrari (Though That’s Nice Too)—It’s Freedom

I had learned this lesson by the time I met Charlie—to a point. I was still “worried” about money. Not about how much I had, because at that point I had more than I needed, but I was still caught up in “How am I doing compared to that person?” “Do I have the best of this thing or that thing?”

It was impossible to meet Charlie and not realize how little money mattered to him in terms of what it could buy him, but how much it mattered to him as a tool. He lived in the same house in LA that he bought in the 1950s. He ate simply, he lived simply. The great wealth he had accumulated was simply freedom to him—the freedom to live the way he wanted, and the freedom to spend time only with the people he wanted to hang out with.

In business, they call that FU money—meaning that you can say FU to anyone and do whatever you want. I remember having these conversations with friends about how much money you need for FU money. We would all talk about buying a jet, a vacation house, and all the things we could buy with FU money, but we were missing the point.

Money is not about the things you can buy—it is about the freedom you want. And that freedom is different for everyone. For some people, it is very simple; for others, it is complex. I love toys, and I love to play with things—and there is absolutely nothing wrong with a Ferrari or two. But if the pursuit of that interferes with my freedom, I am very clear that freedom is more important.

People tend to get trapped in the pursuit of things and realize too late that it is a trap of their time. A better home, a better car, a better vacation house, a better school—always in the pursuit of better and more at the cost of freedom. It is better to be free with one Corvette and time for your family than working your ass off for a stable of Ferraris. The cars will not love you back, but the time with your family is precious and fleeting.

Now, if you can do both (and you can—but it is very hard), there is nothing wrong with a stable of Ferraris.

Lesson

Money is more important for freedom than Ferraris.

Just Because You Can Afford It Doesn’t Mean You Should Buy It

When I met Charlie, I was very rich but not wealthy (and that is a different definition for everyone). For me, I had enough money to do whatever I wanted, but I needed to work. My wealth was tied up in my business—if my business faltered, my wealth faltered. Nothing wrong with that, but I was the ‘working rich’. Again, nothing wrong with that. I could afford most things—to a point, but I still had to be careful because my business needed my money and my time.

A few years later, I sold my business to equity, and things changed. My wealth was no longer solely tied to the business. I was no longer the ‘working rich’—I was just ‘rich’. I could buy anything I wanted—literally anything. And I did—a bigger jet, a yacht, and so on.

I have an insatiable appetite for life and for playing with things. I love toys, but I got to a point where I was living for the toys, and they were taking up a lot of time and work. A large yacht is super fun, but it’s work. It’s more stuff to deal with, more people to manage (we had a crew of 18), and more things to think about.

One of the lessons I learned from Charlie was: just because you can afford it doesn’t mean you should buy it. Buying more stuff is work. Again, no judgment—I have a ton of friends who have tons of stuff and are super happy with it all.

But again, it depends on what stage of life you’re in. I learned from Charlie—everything fades except family and freedom. He was very, very content; he lived exactly as he wanted to. He did not answer to anyone, he did not go to any meetings he didn’t want to. Life was simple and good—he was not trapped by the stuff he owned.

Lesson

Just because you can afford it doesn’t mean you should buy it.