Munger says that in order to succeed in investing (and in life), we must all grow our basic sense of worldly wisdom. Uh oh! It is time to break out the books and read more. Munger believes that understanding the core principles in math, accounting, history, economics, and psychology is a big piece of why he and Buffett have been such successful investors. By learning the most tried and true, useful concepts from a number of disciplines, Munger can see patterns and solve problems better than the people around him. He has also become better at picking stocks because he can think in broader terms, with bigger ideas, as his knowledge base allows him to make better investment decisions. Munger and Buffett aren’t the only two billionaires who ascribe to this philosophy. Many people who have made billons have a higher than average intelligence and knowledge base, which allows them to carefully consider a wide variety of factors when making investment decisions. Basically, the idiocracy is also making us poorer. Knowledge pads both our minds and our bank accounts. So, if you haven’t picked up a book in awhile, that’s OK. It is never too late to start. While you’re reading, don’t just read, analyze what you’re reading. Estimate the value of the information you’re taking in. Find the useful parts and incorporate them into the model on which you base your decisions. Charlie Munger is the vice chairman of Berkshire Hathaway. Buffett considers him his partner. He is 92 years old and has a net worth of $1.2 billion. Munger has said that nothing has served him better during is long life than continual learning. And the bonus to all of that, is that it has made him a billionaire.
