Charlie Munger, the celebrated investor and vice chairman of Berkshire Hathaway, is known for his incisive insights on life and business. One of his key principles revolves around the power of inversion—a mental model that flips problems on their head to uncover solutions.
Munger often illustrates this with a rustic saying:
“I wish I knew where I was going to die, and then I’d never go there.”
While humorous, this encapsulates the essence of inversion. Instead of asking, “How can I succeed?” ask, “What will ensure failure?” Identify and avoid those pitfalls to find success.
To guide others, Munger outlines behaviors that are certain to lead to failure:
- Sloth and Unreliability:
“If you’re unreliable, it doesn’t matter what your virtues are; you’re going to crater immediately,” Munger warns. Reliability and diligence are non-negotiable traits for a successful life. - Extreme Ideology:
“Intense ideology cabbages up one’s mind,” Munger says, cautioning against rigid political or religious beliefs. He advocates maintaining intellectual flexibility and the ability to argue against your own views better than your opponents. - Self-Pity and Envy:
Self-pity, Munger argues, is a mental trap that breeds negativity and paranoia. Envy, resentment, and revenge are equally destructive. His advice? Train yourself to recognize and reject self-pity at its onset.
Munger illustrates the dangers of self-serving biases with the story of Mozart, a brilliant composer whose chronic overspending led to misery. “If Mozart couldn’t get by with this kind of asinine conduct, I don’t think you should try it,” he quips.
He also shares a story about a friend who carried cards reading, “Your story has touched my heart. Never have I heard of anyone with as many misfortunes as you.” These cards, handed out in moments of self-pity, were meant to encourage introspection and emotional resilience.
Munger emphasizes the importance of surrounding yourself with admirable individuals, particularly in professional settings:
“Avoid working directly under somebody you don’t admire and don’t want to be like. It’s dangerous.”
By tactfully aligning himself with people he respected, Munger ensured that his work environment fostered both personal growth and professional success.
In matters of persuasion, Munger echoes the wisdom of Benjamin Franklin:
“If you would persuade, appeal to interest, not to reason.”
Munger recounts a scenario where a general counsel failed to convince a CEO to take timely action due to a reliance on reason rather than self-interest. The counsel could have appealed to the CEO’s personal stakes—money, status, and reputation—to achieve the desired outcome.
Munger’s overarching philosophy is to think clearly, act ethically, and avoid the common traps of human nature. His timeless advice serves as a beacon for anyone striving to lead a successful life:
- Be reliable and diligent.
- Avoid ideological extremism and self-serving biases.
- Cultivate humility by understanding opposing viewpoints.
- Surround yourself with people you admire.
- Use self-interest wisely to influence others.
In Munger’s words, the goal is to be “wise, not foolish; good, not evil.” By inverting life’s challenges and steering clear of self-inflicted harm, you can chart a course for true success.
