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Do you ever get inspired by motivational quotes passed on by super successful people?

Charlie Munger is one such personality whose take on life, investment, and success has the ability to persuade your thoughts and will try to guide you in the right direction.

American billionaire Charlie Munger is an investor, businessman, former real estate attorney, architectural designer, and philanthropist.

He is the vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett. Buffett has also described Munger as his closest partner and right-hand man.

As of September 2021, Munger has an estimated net worth of US$2.2 bn according to Forbes.

Charlie Munger's life has been full of upheaval and tragedy, but his perseverance, resilience, and ability to fight back and move on has made him one of the most iconic investor legends in today’s world.

With his life long experience in investing and wealth creation, he has written several books which have proven to be great learnings for aspiring investors and successful wealth creators.

Let us look at some of the invaluable and incredible wisdom on life & value investing that he has offered throughout the years.

1. Patience is the key

‘The big money is not in the buying or selling, but in the waiting’

The true moral of this quote is to be patient with our investments.

Typically, investors react to rapid market swings by actively buying and selling, focusing on the latter, and sacrificing sensible investment strategies that can yield strong long-term returns.

Stocks that are well-chosen can increase in value many times. However, it takes time.

Consider your investment as the tree that you have just planted. It will take a few years to grow and only then you will be able to reap the benefits.

To make truly life-changing profits in the stock market, you must be able to sit and wait for these gains to manifest.

It's also worth noting that the term ‘waiting’ in the quote is directly related to ‘Power of Compounding’, which explains how investing regularly can help you attain your financial goals, or ‘the big money,’ as it's referred to.

2. Be a continuous learning machine

‘If you don't keep learning, other people will pass you by’.

Knowledge is now at everyone’s fingertips. Those not making use of this opportunity will remain where they are.

Learning is crucial to our existence. Just like meals nourish our bodies, continued learning nourish our minds.

Remember that change is the only thing that’s constant. Change in your career, change in your personal life, change in your community and organisations. One of the most effective ways of dealing with change is with lifelong learning.

Also, one should keep reading voraciously because it will make you a better investor and help you improve in many other areas of your life. Follow your interests, but read broadly and deeply.

3. Don’t rely too much on numbers

‘People calculate too much and think too little’.

Have you ever felt that you spend too much time calculating and not enough thinking?

According to Munger, thinking is a surprisingly underrated activity in investing.

People who cannot be alone with their own thoughts for a long time are terrible candidates to become successful investors.

When it comes to investing, financial figures are important, but they don't tell the whole story.

Taking the time to understand the qualitative aspects of a business, a company's culture, management's vision for the future, etc. can give you an edge over investors who focus only on the quantitative data.

4. Get enlightened each day

‘Spend each day trying to be a little wiser than you were when you woke up. Day by day, and at the end of the day-if you live long enough-like most people, you will get out of life what you deserve’.

No one gets successful overnight. It takes sustained continuous improvement to get from where you are to where you want to be.

Knowledge and wisdom compound over time - that’s the power of slow, incremental constant progress.

It doesn’t matter what your station is in life or where you’re headed next, you can always grow and learn new skills and ideas.

Growth can come from your job, from your relationships, and from investing as well.

If you commit an hour a day to learning something new, or building something of your own, you will be astonished at what you can accomplish over the long term.

As Charlie Munger says, if you commit yourself to this habit, you will get what you deserve.

5. Is wealth what you really want?

‘Like Warren, I had a considerable passion to get rich, not because I wanted Ferraris – I wanted the independence. I desperately wanted it’.

Wealth will not always bring you happiness. Some may disagree with this statement, but according to Munger, he was not chasing wealth just to enjoy the perks of being rich, he was chasing it for this one particular reason.

The one thing that comes with wealth is freedom. If freedom is what you want, becoming independently wealthy is the only way to do it.

That’s what Charlie Munger understood and longed for early in his career.

However, you have to know exactly what you’re after And why. Because the road to riches is long and of hardships. Chasing it for the wrong reasons will leave you desperately unhappy.

To sum up

There are many valuable lessons that one can learn from the legendary investor, businessman and a great author, Charlie Munger.

His shrewdness is an asset for the entire investing community. The information and success that he has achieved within the past few decades is quite inspirational.

As an investor, one should try to implement his philosophy in one’s life.

To be a successful investor like Charlie Munger, one needs to put in the time, learning about companies, reviewing financial statements, studying investing strategies, and identifying reliable resources.

Happy Investing!

This article is syndicated from Equitymaster.com

 

 

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