Charlie Munger's advice on investing and life choices that make a person wealthy

As Berkshire's Vice Chairman, the 95-year-old Munger is Warren Buffett's right-hand man. He's also an investing legend in his own right. Munger ran a firm in the 1960s and '70s that scored returns of over 24% per year. He's here to talk about how to make investment decisions and life choices that help secure prosperity and longevity.

I'm Andy Serwer. Welcome to "Influencers." And welcome to our guest, Vice Chairman of Berkshire Hathaway, Charlie Munger. Charlie, nice to see you.

CHARLIE MUNGER: Delighted to be here.

ANDY SERWER: So you just had the annual meeting. And I have to ask you what your favorite moments of that were.

CHARLIE MUNGER: What I like is that both the shareholders and employees of Berkshire are so extremely enthusiastic. And it's not just that they made a lot of money and have nice careers. They think they're on the right side.

ANDY SERWER: And, you know, they come there to hear you guys talk all day. And--

CHARLIE MUNGER: Yeah, it's like a cult.

ANDY SERWER: It's like a cult?

CHARLIE MUNGER: Yeah.

ANDY SERWER: In a good way, though?

CHARLIE MUNGER: Yeah, a good cult. Yeah, it's a good cult.

ANDY SERWER: OK. I mean, and the stuff that they hear-- some of it's new, some of it's old, and a lot of it is common sense. And you were talking a lot about--

CHARLIE MUNGER: All of it is common sense.

ANDY SERWER: Right.

CHARLIE MUNGER: But of course, when people use the word "common sense," what they mean is uncommon sense. Because the standard human condition is ignorance and stupidity. And when they say, old Joe has common sense, what they mean is he has uncommon sense.

ANDY SERWER: I guess it's a bit of a misnomer then.

CHARLIE MUNGER: It really is.

ANDY SERWER: So, yeah, why is it that people can't think clearly about investing or decisions in their lives?

CHARLIE MUNGER: Well, they don't think very well about sex or gambling either. You know, I think the standard human condition has a lot of miscognition.

ANDY SERWER: And there are ways to make hay of that or--

CHARLIE MUNGER: Yes. You take advantage of other people. You can improve your own life by eliminating your miscognitions.

ANDY SERWER: Let me shift gears a little bit, Charlie, and ask you about the US economy. And what is your take on where things are right now?

CHARLIE MUNGER: Well, obviously, they're booming. But, you know, the economy sometimes booms, and sometimes it doesn't. And you have to live your life through both episodes. And our idea is we just keep swimming. And sometimes the tide is with us, and sometimes against. But we keep swimming either way.

ANDY SERWER: Are you surprised by how long this expansion has lasted?

CHARLIE MUNGER: Of course, it's lasted a long time. But what was really remarkable is that we never printed money so much and spent it so fast and bought back so much debt, public and private. So this is total terra incognita in economics. And nobody knew for sure how it was going to work.

ANDY SERWER: So was it risky then?

CHARLIE MUNGER: Of course it was risky. But it worked. And I don't think they had much else that it would work. They weren't set up to do stimulus-- too much controversy. Democratic inertia is very thin. So they had to do something. And all they had left was just to print money and start buying things. And that's what they did. And it turned out to be a very wise response. And what's even more remarkable is that both Congress and the presidency and both parties made the same decision. They all cooperated. It was the last time.

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[RichardMoore-jgtl]

Success hinges on proactive steps, like consistently investing in solid opportunities. Financial management, often overlooked, can have lasting repercussions. Here's to the success of all who read this.

[ClaudiaSchreiber-bp]

Dividend investing is most effective when approached with a long-term perspective. While dividends can provide immediate income, the true power lies in the compounding effect over many years. I'm still looking for companies to make additions to my $350K portfolio, to boost performance. Here for ideas...

[stephaniestella]

Building wealth from nothing involves consistent saving, disciplined spending, and strategic investments. Begin by creating a budget to track expenses and identify areas for savings. Prioritize paying off high-interest debt and establishing an emergency fund. As you build a foundation, start investing in low-cost options like index funds, and focus on continuous learning and improving your skills for better income opportunities.

[Riggsnic_co]

Didn't Charlie Munger and Warren Buffett invent the strategy of buying/investing when the market is low and also buying/investing when the market is high? As Warren Buffet said, he has seen this happen many times in his life. Not an investor. My wife and i never earned more than a middle class salary. We plan to get retired at 58 with a stock portfolio worth $4M. We have never sold so much as one share of stock...

[kepler]

95 years and still working. Thats what happens when you do something you love.

[andrew.alonzo]

Making money is not the same as keeping it there is a reason why investments aren't well taught in schools, the examples you gave are well stationed, the market crisis gave me my first millions, people shy away from hard times, I embrace them.. well at least my advisor does lol...

[williamyejun]

ETFs makes up a large portion of my portfolio

[anthonyrussell]

Munger and Buffett have both achieved an incredible feat with Berkshire. They've turned thousands to billions, and have made a lot of people wealthy in the process. I really saw the potential of the stock market by reading Berkshire's annual letters. I recently sold my $674k apartment in the Bel Air area and I'm hoping to throw it into the stock market. I just don't want to lose everything.

[PietroSperonidiFenizio]

He is so direct in his answers, makes me think he simply decided he does not have any time left for bs. He can just say things as they are.

[lisaollie]

Only if a good amount of folks do what you teach, just imagine how many millionaires we already have or will have in the future. I have been looking at similar opportunities. As Warren Buffet noted, he has witnessed this occur frequently. Never did my husband and I make more money than others in the middle class. With a $250k stock portfolio, we intend to retire at age 58. Never have we ever sold even one share of stock...

[jessicamoore]

Success depends on the actions or steps you take to achieve it. Building wealth involves developing good habits like regularly putting money away in intervals for solid investments. Financial management is a crucial topic that most tend to shy away from, and ends up haunting them in the near future.., I pray that anyone who reads this will be successful in life!!

[Alejandracamacho]

I must say you are an inspiration because I started up investing and trading as a scared investor who doesn’t want to lose money, glad to say I’m very profitable now and bought my first house through it

[shellylofgren]

To my understanding this just proves how much we need an edge as investors because playing the market like everyone else just isn’t good enough. I've been quite unsure about investing in this current market and at the same time I feel it's the best time to get started on the market, what are your thoughts?

[Mindforprogress]

He may be 95 and in a wheelchair...but this man's mind is sharper than an obsidian blade.

[BateserJoanne]

Getting a head start by beginning to invest early is the most effective way to build wealth, with investment taking precedence. I've learned from last year's experience that starting early allowed me to create a better life through early investments this time around.

[scottarmstrong]

Great video, I've been interested in investing ever since I came across articles of people making up to $150, 000 and more in this period, thanks for the video but is it really possible for a retail investor to achieve this in months?

[oneiljerry]

I learned that the stock market was a rich man's game (yes, grandparents lost it all back then and preached that forever) but I've been around long enough to really taste how great it can be. To be profitable, with inflation at 6.1% These are surely desperate times, but in my opinion, there is no market condition that a good financial advisor cannot navigate, especially those that have existed since the crisis of 2008 and before.

[rolandisnypes]

See how he positioned the coke bottle at the perfect angle so we see the entire logo😂

[John-rnuw]

Munger on Elizabeth warren: “I don’t think she studied Adam Smith enough.”

Munger on AOC: “I don’t think she knows who Adam Smith was.” 😂

[dawsondanny]

These are very valuable rules for anybody who wants to get rich. Unfortunately, most people who will watch this video will not really be able to apply the principles. We may not want to admit, but as Warren Buffett once said, investing is like any other profession-- it requires a certain level of expertise. No surprise that some people are losing a lot of money in the bear market, while others are making hundreds of thousands in profit. I just don't know how they do it. I have about $109k now to put in the market.