Hello Friend!
Since I received the news of the passing away of Charlie Munger, I’ve been thinking a lot about him and the lessons I learned from him.
I was first “introduced” to Charlie through the YouTube videos of Mohnish Pabrai — who was a dear friend to Charlie.
In today’s newsletter I picked one of the main lessons I learned from Charlie — to avoid feeling envy. As Charlie and Warren Buffet realized: “The world is not driven by greed, is driven by envy”.
👤 Authors
💡Nugget
✦ Charlie Munger (transcript):
With all this enormous increase in living standards, freedom, diminishment of racial inequities, and all the huge progress that has come, people are less happy about the state of affairs than they were when things were way tougher.
That has a very simple explanation. The world is not driven by greed; it’s driven by envy. So the fact that everybody’s five times better off than they used to be, they take that for granted. All they think about is somebody else having more now and it’s not fair that he should have it and they don’t. That’s the reason that God came down and told Moses that he couldn’t envy his neighbor’s wife or even his donkey. I mean, even the old Jews were having trouble with envy.
So it’s built into the nature of things. It’s weird for somebody at my age because I was in the middle of the Great Depression and the hardship was unbelievable. I was safer walking around Omaha in the evening than I am in my own neighborhood in Los Angeles after all this great wealth and so forth. So and I have no way of doing anything about it. I can’t change the fact that a lot of people are very unhappy and feel very abused after everything’s improved by about 600% because there’s still somebody else who has more. I have conquered envy in my own life. I don’t envy anybody. I don’t give a damn what somebody else has. But other people are going crazy by it. And other people play to the envy in order to advance their own political careers.
We have whole networks now that want to pour gasoline on the flames of envy. I like the religion of the old Jews. I like the people who were against envy, not the people who were trying to profit from it.
Think of the pretentious expenditures of the rich. Who in the hell needs a Rolex watch so you can get mugged for it? Yet, everybody wants to have a pretentious expenditure. That helps drive demand in our modern capitalist society. My advice to the young people is: don’t go there. To hell with the pretentious expenditure. I don’t think there’s much happiness in it. But it does drive the civilization we actually have. And it drives the dissatisfaction.
Steven Pinker of Harvard is a smart academic. He constantly points out that everything’s gotten way, way better, but the general feeling about how fair it is has gotten way more hostile. As it gets better and better, people are less and less satisfied. That is weird but that’s what’s happened.
Transcript Credit → Junto Investments (https://junto.investments)
💭 Reflections
As Paul Graham argued in his book Hackers and Painters, inequality of income is a symptom of a healthy Society, when it stems from technological advancement — which is (mostly) the case in our times.
Technology is leverage, and so the more advanced the technology gets, the more leverage humans have at their disposal. This means that if someone is a bit more productive than the next person, the difference in the outcome is massive — because that slight increase in productivity gets amplified by the technology used.
The more advanced the tech, the wider the gap in outcomes between people. So, in this sense, inequality of income is a good thing. With a good distribution system in place, the pie gets bigger for everyone — and everyone wins.
This is of course all that it really matters. That everyone has at least their basic needs covered and a strong safety net. But it’s an absolute scale. That’s the “problem”. We are humans so we get used to it, and when that happens we only see the other people that are better off — and so many people will think that there is something “wrong” in the system. And they will pick examples of corruption and bad behavior from rich people or pro-capitalists to justify their actions. Of course this seems to me like a stupid argument — in any complex and big system there will always be bad players, but it does not say anything about the system itself. These people are too blinded by their feelings of envy and unfairness to see the progress and abundance that that system has brought.
By the way, I’m reading the new book from Eric Jorgenson on Balaji Srinivasan “The Anthology of Balaji” and it’s fascinating — especially the glimpses of what’s coming in technology for the next decades.
On a different note, I also made a hand-written list of the lessons from Charlie Munger that I’ll never forget.
Below you can see all the lessons, and at the end there’s a picture of my hand-written list — which I stick on a wall in my living room. And—funny enough—my aunt (with whom I live) still haven’t raise any questions about the sudden paper on the wall with some unusual advice.
Be reliable.
Avoid self-pity.
Stay away from envy.
Use inversion to solve problems.
Work with/for people you admire.
Stay away from strong ideologies.
Wisdom acquisition is a moral duty.
Have low expectations (to be happy).
Never feel like a victim (even if you are).
Discharge your duties faithfully and well.
Be rational. Don't fall in love with your ideas.
Cut-off toxic people from your life. And do it fast.
When dealing with people, think about incentives.
Be a giver and surround yourself with other givers.
The best way to get what you want is to deserve it.
Don't overspend your income (avoid the self-serving bias) and invest long-term.
📁 All the ideas in this article are saved and classified in a searchable Database, which (as of July 2024) contains nearly 2,000 timeless ideas (sourced directly from the most influential doers and entrepreneurs — captured on books, interviews/podcasts and articles).
I call this Database the Doers Notebook, and I’ve recently opened it for anyone who wants it.
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So, if you wanna get better at sales and learn to be more creative (and also see all the features of the database and how you can get access) then definitely check out the video 👇
💥 Stuff I Loved
Wishing you a lovely weekend!
Julio xx
P.S. If you liked this article, you'll definitely enjoy my free 80-page ebook. It’s packed with 23 big ideas (from top influential doers and entrepreneurs) to become better, richer and wiser. Download your copy here!
If people are run by envy but not greed, this gives a good explanation for why it is lonely/boring at the top cause you can still expand further do more stuff but no one to compete with or envy towards, the desire is burnt away and then there are people like Elon Musk still expanding over cause envy was never the way to begin with for him and also why in history we see rulers after being so powerful they become tyrants inorder to imitate the gods since they envy the person who resides above em. At the same time, people who envy are the easiest to exploit because they want to play status games while having no status to begin with.
This was my nugget after reading yours btw
"To solve a problem, Use Inversion" , What exactly does this mean and where can I refer to learn more about it?