3 Rules from Buffett Partner Charlie Munger That Helped Earn Him $3 Billion Fortune
Written by
Yaël Bizouati-Kennedy
Edited by
Cory Dudak
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Charlie Munger — Warren’s Buffet’s right-hand man, Berkshire Hathaway vice chairman and billionaire investor — died on Nov. 28 at the age of 99. “Berkshire Hathaway could not have been built to its present status without Charlie’s inspiration, wisdom and participation,” Buffett, CEO of Berkshire Hathaway, said in a press release at the time.
Business Insider reported that Munger’s net worth stood at $2.6 billion, according to Forbes rankings. He was able to accumulate his fortune following “three basic rules,” which he outlined in an CNBC op-ed.
Munger shared that the three basic rules he followed in order to feel satisfied in his career could help evaluate the career decisions of any young person. However, he cautioned that meeting all three is a near-impossible feat (but still worth the effort to try). “I have been incredibly fortunate in my life when it comes to these basic rules. With Warren Buffett, I had all three,” Munger continued.
1. Don’t sell anything you wouldn’t buy yourself
“The safest way to try to get what you want is to try to deserve what you want. It’s such a simple idea. It’s the golden rule. You want to deliver to the world what you would buy if you were on the other end,” he wrote.
Munger further argued that this represents the best principle people can have, as with this ethos, they “win in life, and they don’t win just money and honors — they win the respect and the deserved trust of the people they deal with.”
2. Don’t work for anyone you don’t respect and admire
Munger truly put this piece of advice in practice, granted his multi-decades partnership and friendship with the Oracle of Omaha.
“You particularly want to avoid working directly under somebody you don’t admire and don’t want to be like. It’s dangerous. We’re all subject to control to some extent by authority figures, particularly authority figures who are rewarding us. Dealing properly with this danger requires both some talent and will,” Munger wrote.
3. Work only with people you enjoy
“I’ve found that intense interest in any subject is indispensable if you’re really going to excel. I could force myself to be fairly good in a lot of things, but I couldn’t excel in anything in which I didn’t have an intense interest or enjoy,” Munger wrote. “If at all feasible, you want to maneuver yourself into doing something in which you have an intense interest alongside people whose company you enjoy.”
Are these rules applicable nowadays?
Some experts argued that while Munger’s advice is meritorious, it’s also difficult to adhere to for any young person entering the workforce today.
“Whether graduating from college or starting at a new job, it’s not always possible to work for people one respects or to enjoy the company of people in a firm (or, for that matter, clients/customers),” said Peter C. Earle, economist at the American Institute for Economic Research.
As for not selling anything one wouldn’t buy, Earle said that it’s generally a good guideline. “Even if it’s not a question of shoddy, misrepresented, or fraudulent goods or services, people are likely to perform better as employees if they believe in the merits of whatever it is they’re putting out,” he said.
Finally, Earle noted that it’s a lot easier for a billionaire in an executive position at one of the most storied firms in the world to live by these guidelines than a Gen Z kid just getting out of school.
“With no work experience, facing inflation and a rapidly changing economic landscape, it’s usually not possible to end up at a firm one loves while working with highly respected managers and treasured co-workers — at least not all three right out of the gate,” he said. “One might get one or two of those things if they’re fortunate. Earning a living ethically, while applying skills and gaining experience, should be the initial goal.”
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