Warren Buffett’s business partner and close friend, Charlie Munger, has revealed the secret to his success and longevity: avoiding craziness. In a recent interview with CNBC’s Becky Quick, Munger stressed the importance of caution and steering clear of obvious risks.
According to Munger, the prevalence of “crazy” behavior is more widespread than people realize, and it can have disastrous consequences both in personal and professional life. Specifically, he defined “crazy” as engaging in risky behavior such as excessive drinking, smoking, and taking on too much leverage in investments. By steering clear of such behavior, Munger believes one can lead a more stable and successful life.
Munger’s philosophy of avoiding craziness was not only limited to his personal life but also extended to his business endeavors. Together with Buffett, they intentionally ran Berkshire Hathaway in a cautious manner to protect smaller shareholders from potential losses. It was this prudent approach that contributed to their tremendous success over the years.
Interestingly, Munger confessed to having a couple of minor vices – peanut brittle and Diet Coke – but he brushed off concerns about their impact on his health and lifespan. Clearly, he didn’t believe these indulgences would jeopardize his overall well-being or hinder his accomplishments.
Speaking of accomplishments, Munger’s net worth was estimated to be $2.3 billion, a fraction compared to Buffett’s staggering $120 billion fortune. Their partnership was not only successful but also long-lasting, lasting nearly 45 years. Together, they navigated numerous market challenges and built a formidable empire, solidifying their status as investment legends.
As Munger reflected on his impressive journey, it becomes evident that his aversion to craziness, both in his personal and professional life, played a significant role in his achievements. In a world where risks are abound, Munger’s wisdom serves as a reminder to prioritize caution and prudence, ultimately leading to long-term success.
