The Wisdom of Poor Charlie’s Almanack

I have often talked about the wisdom of the world's best investor, Warren Buffett. However, his business partner, Charlie Munger, while less famous, is equally wise and humorous. There are so many great insights to be gained from Charlie Munger who passed away in 2023 at the age of 99. Poor Charlie’s Almanack is more than just another business book. The book is a no-nonsense guide to thinking, making decisions, and living life.

1. Rationality

Munger was obsessed with rational thinking. He’s all about using logic, not impulse, to drive decisions. The trick is knowing your biases—like confirmation bias, where you only look for information that backs up what you already think, or availability bias, where you overvalue info that’s easy to remember. These little traps can badly impact your decision-making, but if you can identify them early, you can make far better decisions. Slow down and think rationally so you don’t let excitement or fear dictate your moves. Rational thinking can be the difference between success and failure in any part of your life.

2. Patience

In today’s world of instant gratification, patience can be both rare and difficult to have. Patience isn’t just for investing; it’s a life skill. Whether you’re building a career, a business, or a personal relationship, the key to success is often hanging in there long enough to see it through. Patience doesn’t mean sitting still, it means waiting for the right moment and making the most of it when it arrives. Munger talks about the power of finding a great business or opportunity and holding on for the long term, watching it compound over time. The same applies to everything else in life.

3. Consistency

It’s not often the smartest or most talented person who succeeds, it’s the one who shows up day after day grinding it out. Munger is a huge advocate of consistency and discipline.? Success is about being disciplined enough to repeat what works and avoid what doesn’t. It’s about making the right decisions again and again, even when the excitement fades. Munger isn’t talking about perfection; he’s talking about steady progress. It’s boring, but it works. It’s a key factor in long-term success, regardless of your field.

4. Don’t Get in Your Own Way

We all have flaws and Munger often talked about his. But he was also quick to point out that the most important skill you can develop is learning to avoid self-sabotage. Whether it’s overconfidence, laziness, or just ignoring good advice, making the same mistakes over and over is a sure way to fail. Munger doesn’t just encourage people to avoid these behaviors—he pushes people to understand their weaknesses, face them, and actively work to get better. It’s not about eliminating mistakes, but about minimising them by learning from past errors and being brutally honest with yourself.

5. The Multi-Disciplinary Mind

Munger was a firm believer in the power of a multi-disciplinary approach to life. His thinking here is about pulling insights from multiple areas, from economics and history to psychology and biology, whatever paints a fuller picture. It makes sense, why limit yourself to a narrow field of expertise when you can tap into the knowledge of many? If you want to make better decisions, don’t box yourself into a single framework. Instead, consider different domains and apply the best tools to whatever challenge you’re facing. It's a great way to see the bigger picture and make better choices.

6. The Power of Reading and Lifelong Learning

Munger was a lifelong learner who knew that reading is the simplest shortcut to gaining wisdom. But it’s not just business books Munger recommends, he reads across the board. He suggests that the more you expose yourself to different ideas, the sharper your thinking becomes. Books are where you get the kind of intellectual flexibility that can help you solve problems in ways that others can’t even imagine. If you’re not reading regularly, you’re missing out. This reminds me of the famous quote by Mark Twain “The man who does not read has no advantage over the man who cannot read.”

7. Reputation and Integrity

Reputation is everything. You can lose money, time, and even opportunities, but once you lose your reputation, it’s nearly impossible to get it back. Munger’s success was rooted in doing business with integrity and maintaining a strong moral compass. He’s a firm believer that, in the end, the people who thrive are the ones who do the right thing—even when no one’s looking. Reputation isn’t just about avoiding doing the wrong thing; it’s about keeping your word and treating people well. Munger’s advice? Build a reputation based on trust and decency, and everything else will fall into place.

Poor Charlie’s Almanack isn’t just about making investment and money, it’s a blueprint for living a thoughtful, rational, and disciplined life. Munger’s style is simple: think better, wait longer, and avoid missteps along the way. It’s timeless advice that, when followed, will stand the test of time.