Charles Munger: Why Toxic People and Habits Are Stopping You From Earning
Written by
Heather Taylor
Edited by
Chris Cluff
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The great lesson of life, according to the late Charles Munger, is to get rid of toxic people.
Munger was the long-time business partner of Warren Buffett and vice chairman of holding company Berkshire Hathaway. A few months before Munger’s death on Nov. 28, he and Buffett presided over the 2023 Berkshire Hathaway annual shareholder meeting in Omaha, Nebraska. Both fielded questions in this session and explained how one can avoid making mistakes in life and business.
See more of Munger’s financial philosophies.
‘Get Toxic People Out of Your Life’
In a CNBC YouTube clip from the shareholder meeting, Buffett and Munger were asked which major mistakes were most important to avoid making in investing and life.
Munger emphasized the importance of avoiding toxic people and toxic activities. Buffett added to that thought, “You need to know how people can manipulate other people. And you need to resist the temptation to do it yourself.”
Munger said toxic people who are trying to fool you, aren’t reliable and/or aren’t meeting their commitments need to get out of your life.
Munger’s Tips for Winning at Investing and in Life
Aside from avoiding toxic people, Munger also shared sage wisdom for what it takes to win at investing and in life. He described these tips as “simple”:
- Spend less than what you earn
- Embrace a shrewd investor mindset
- Do a lot of deferred gratification because, Munger said, “you prefer life that way”
- Be an eternal student and finding ways to keep learning your entire life.
“If you do all those things, you are almost certain to succeed,” Munger said. “If you don’t, you’re going to need a lot of luck. And you don’t want to need a lot of luck. You want to go into a game where you’re very likely to win without having any unusual luck.”
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