Billionaire Charlie Munger: ‘Avoid all standard ways of failing’

Billionaire Charlie Munger secret to success

Billionaire Charlie Munger: ‘Avoid all standard ways of failing’

Original report from Ashton Jackson

When it comes to achieving ultra-rich status, one might assume that there’s a mysterious secret to such success. However, according to billionaire Charlie Munger, who passed away last week at the age of 99, there isn’t.

“I don’t know the secret,” Munger told CNBC’s Becky Quick. “I avoided the standard ways of failing, because my game in life was always to avoid all standard ways of failing,” said Munger. “You teach me the wrong way to play poker and I will avoid it. You teach me the wrong way to do something else, I will avoid it. And, of course, I’ve avoided a lot, because I’m so cautious.”

Munger dedicated his life to “avoiding traps,” such as residing in the same modest home for 70 years and resisting the urge to emulate his affluent peers who constructed lavish mansions. He expressed the belief that, in most instances, opulent houses tend to diminish rather than enhance a person’s happiness.

Munger’s overall sense of caution was extensively documented, extending from his personal aversion to the perceived “gambling” nature of cryptocurrency to his consistently conservative approach to spending decisions.

Regarding cryptocurrency, Munger expressed his views bluntly, stating, “Sometimes I call it ‘crypto crappo.’ Sometimes I call it ‘crypto s—.’ It’s just ridiculous that anybody would buy this stuff.” In February, he told CNBC, “It’s totally absolutely crazy, stupid gambling.”

His inclination towards practicality extended beyond his investment portfolio to encompass his spending decisions.

On one occasion, when Warren Buffett, Munger’s longstanding business partner at Berkshire Hathaway, needed to replace a company jet and justified the $6.7 million price tag in a letter to shareholders, Munger perceived the purchase as extravagant, as recounted by Buffett in the letter.

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“His idea of traveling in style is an air-conditioned bus, a luxury he steps up to only when bargain fares are in effect,” wrote Buffett.

Undoubtedly, steering clear of evident risks, frivolous endeavors, and “crazy” situations played a crucial role in Munger’s financial success and prolonged career.

“Avoid crazy at all costs. Crazy is way more common than you think,” said Munger. “It’s easy to slip into crazy. Just avoid it, avoid it, avoid it.”

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