On part 3 of the Forbes series on Charlie Munger (Trades, Portfolio)’s comments on the DJCO Annual Meeting, we find an interesting answer on technology and Charlie’s system to attain wealth. I reproduce verbatim and comment on the answer at the bottom of the article.
Q. All right. What advice would you give for early entrepreneurs, young game changers, in the old way of thinking?
Mr. Munger: I don’t know anything about the new world of managing a big network based on computer science. It all came up and developed after I was convicted in my habits, to then go back and learn to play a different game. What I was doing worked well enough so I didn’t feel deprived. I let it pass.
I wish everybody well who’s good at it. I feel the same way about a guy that walks across the tight rope over Niagara Falls. It’s his way of making a living, but I’m not inclined to try it.
I’m not trying to outdo Page and Brin at Google, and I don’t have any advice for young people who want to get rich. Basically, I think the desire to get rich fast is pretty dangerous. My own system was to get rich slow.
It protracts a rather pleasant process so I recommend my system to everybody. After all, if you get rich fast all you can do is be robbed by your own employees and your yacht and so forth. Whereas if you get rich slow, you amuse yourself over a lifetime.
My advice to you is to go to the “get rich slow” system.
Comments: The answer has two components; the first one is recognizing that big networks is out of his circle of competence and therefore he limits his comments. As in many things, it is wiser to know what you don’t know than to pretend to do so. This is exactly the type of approach that emphasizes big home runs, as you wait for the right pitch and let go those opportunities that you don’t understand. He also lets us know that he perceives big netwoks and computer science as extremely dangerous, analogous to a guy walking over a tightrope.
The second part of the answer details how to advise young people to get rich. Contrary to common schemes out there, Munger mentions that it is better to get rich slowly. On previous comments, he discussed that the way to get ahead is to live below our means, which is the building foundation of all wealth. After some capital is accumulated, it is very important to use compounding to our advantage. “I had a considerable passion to get rich. Not because I wanted Ferraris –Â I wanted the independence. I desperately wanted it.”
