Author Topic: Charlie Munger and Li Lu interview in China (august 18)  (Read 8329 times)

LC

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Re: Charlie Munger and Li Lu interview in China (august 18)
« Reply #30 on: December 31, 2018, 02:40:38 PM »
That's true and on retrospect my comment was a bit harsh. I don't think the mental latticework whatnot is useless - it certainly is not. Combining disciplines can and has produced novel ideas and inventions.

But - I think if we are going to look to examples of that for emulation, we should pick from successful ones that truly embody the principle. Elon Musk for example build a payment processor and now look what he is doing. Or Bill Gates who built one of the greatest companies and now charitable funds.

CM, while certainly a great guy and teacher, did not (as far as I know) take his investment billions and develop some incredible technology elsewhere.

And to be fair, he is an incredible investor and in my opinion that is enough in itself to deserve acclaim - but to characterize him as some polymath investor-philosopher...this is stretching the hero worship a little too far for my taste. Of course I still asked him to sign a copy of his book for me!  ;D
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plato1976

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Re: Charlie Munger and Li Lu interview in China (august 18)
« Reply #31 on: December 31, 2018, 05:12:25 PM »
To me, the following paragraph is the most relevant one for an average Joe:

"here’s a pathway towards financial independence.

1. Work hard, get an education, develop a valuable skill. Munger didn’t start Facebook from his dorm room or trade penny stocks in high school. He served in the military, earned a law degree, and went to work everyday for years. At this point, work means exchanging your time for money, but hopefully at a good hourly rate.
2. Use that work career and save up 10x living expenses. Munger called himself a “cautious little squirrel” saving up a pile of nuts. He dutifully saved his salary while supporting a family and kids (and some other personal family drama that a luckier person wouldn’t have to deal with). I don’t think you’ll need 10x if you don’t have a family to support.
3. To accelerate wealth accumulation, you can now take some more risk and start some sort of business. You need something that scales, something that’s not paid per hour. Munger did real estate development. If you look at people who got wealthy quickly, nearly all of them are business owners of some type.
4. At some point, your investments will enough money to support your living expenses. This is financial independence. It doesn’t matter what you do during the day, as you earn enough money while you’re sleeping. However, many people choose to continue doing one of the paths above: (1) employee-based career, (2) active business management, or (3) actively managing their investments.
"

Say now you passed stage 2, how should you move to step 3? I think many folks are facing this choice. Many do stocks but I don't think for most ppl it's a good choice for step 3 b/c
1. it's not scalable 
2. it usually doesn't provide stable income
3. it's very dangerous to use leverage on stocks

Munger did real estate development at stage 3. I still think real estate in some form (agency, re-modeling, rental business of some sort of...) is still the best choice for stage 3 for most ppl
Any other suggestion?

That's true and on retrospect my comment was a bit harsh. I don't think the mental latticework whatnot is useless - it certainly is not. Combining disciplines can and has produced novel ideas and inventions.

But - I think if we are going to look to examples of that for emulation, we should pick from successful ones that truly embody the principle. Elon Musk for example build a payment processor and now look what he is doing. Or Bill Gates who built one of the greatest companies and now charitable funds.

CM, while certainly a great guy and teacher, did not (as far as I know) take his investment billions and develop some incredible technology elsewhere.

And to be fair, he is an incredible investor and in my opinion that is enough in itself to deserve acclaim - but to characterize him as some polymath investor-philosopher...this is stretching the hero worship a little too far for my taste. Of course I still asked him to sign a copy of his book for me!  ;D

clutch

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Re: Charlie Munger and Li Lu interview in China (august 18)
« Reply #32 on: December 31, 2018, 09:15:15 PM »
To me, the following paragraph is the most relevant one for an average Joe:

"here’s a pathway towards financial independence.

1. Work hard, get an education, develop a valuable skill. Munger didn’t start Facebook from his dorm room or trade penny stocks in high school. He served in the military, earned a law degree, and went to work everyday for years. At this point, work means exchanging your time for money, but hopefully at a good hourly rate.
2. Use that work career and save up 10x living expenses. Munger called himself a “cautious little squirrel” saving up a pile of nuts. He dutifully saved his salary while supporting a family and kids (and some other personal family drama that a luckier person wouldn’t have to deal with). I don’t think you’ll need 10x if you don’t have a family to support.
3. To accelerate wealth accumulation, you can now take some more risk and start some sort of business. You need something that scales, something that’s not paid per hour. Munger did real estate development. If you look at people who got wealthy quickly, nearly all of them are business owners of some type.
4. At some point, your investments will enough money to support your living expenses. This is financial independence. It doesn’t matter what you do during the day, as you earn enough money while you’re sleeping. However, many people choose to continue doing one of the paths above: (1) employee-based career, (2) active business management, or (3) actively managing their investments.
"

Say now you passed stage 2, how should you move to step 3? I think many folks are facing this choice. Many do stocks but I don't think for most ppl it's a good choice for step 3 b/c
1. it's not scalable 
2. it usually doesn't provide stable income
3. it's very dangerous to use leverage on stocks

Munger did real estate development at stage 3. I still think real estate in some form (agency, re-modeling, rental business of some sort of...) is still the best choice for stage 3 for most ppl
Any other suggestion?

That's true and on retrospect my comment was a bit harsh. I don't think the mental latticework whatnot is useless - it certainly is not. Combining disciplines can and has produced novel ideas and inventions.

But - I think if we are going to look to examples of that for emulation, we should pick from successful ones that truly embody the principle. Elon Musk for example build a payment processor and now look what he is doing. Or Bill Gates who built one of the greatest companies and now charitable funds.

CM, while certainly a great guy and teacher, did not (as far as I know) take his investment billions and develop some incredible technology elsewhere.

And to be fair, he is an incredible investor and in my opinion that is enough in itself to deserve acclaim - but to characterize him as some polymath investor-philosopher...this is stretching the hero worship a little too far for my taste. Of course I still asked him to sign a copy of his book for me!  ;D

Or just keep on with your professional career if you like what you are doing and find it meaningful. And just say -- what im earning now and what i will have in my retirement are _enough_.