As I continue to read through Richer, Wiser, Happier, I am in the chapter about Charlie Munger.
As we all know Mr. Munger is highly regarded as an investor. For me, his most played video is when he says the first $100,000 is the hardest to reach. But when you reach that, you can back off the peddle a bit. I think there’s a lot of wisdom behind that statement.
But I have never read much on him or about him. But this chapter talks about his “Invert” method to life. It’s almost like reverse engineering. He gives an example of: “How can we help India?”. He goes, that’s very hard to do, but if we turn it around and ask: “How can we ruin India?”. That gives us a lot of ideas and how not to do those or prevent those actions. I really like this method.
I want to break this down for myself. I want to be wealthy. So I invert this: How do I not become wealthy? For one, not working would make me not wealthy, or trying to bring in some sort of income. If I spend all my money on useless things, that would make me not wealthy. If I kept buying a new car every year, that would make me not wealthy. If I didn’t invest and save, that would make me not wealthy. If I didn’t have enough income coming in to live below my means, that would make me not wealthy.
So from this inverting, now I revert these answers to become wealthy. To become wealthy I have to work, save, earn more than my expenses, no new car payments, invest, etc.
I LOVE THIS STRATEGY!!!!
Let’s try it with something else: “I want to live long”. So we invert this statement to: “How do I not live long?”. Well that’s a long list. Doing drugs will take your life pretty fast(heroin, smoking, drinking, etc.). Riding dangerous vehicles(motorcycles). Being a robber or felon. Having a horrible diet of just red meat, beer, fried everything. Working in a job that has a short life span. Stressing my body constantly. Not getting enough sleep.
Now, lets revert all the answers. Sleep and eat well. Don’t do drugs. Don’t commit anything illegal. Create a non stressful living environment. Don’t associate with people that do anything otherwise.
That looks really good to me!
I plan to apply this method to a lot of other things in my life as well.
Thanks Mr. Munger!