I’ve gotten to the part in The Snowball that involves Charlie Munger. A very interesting person, although perhaps not someone I’d like to have a beer with (I’d feel stupid), he is probably best known as Buffett’s long-time friend, business partner, and vice-Chairman of Berkshire Hathaway.
Even before meeting Warren Buffett, Munger was wealthy according to most standards from real estate investing. Here is a quote from a Buffett interview in the book:
Charlie, as a very young lawyer, was probably getting $20 an hour. He thought to himself, ‘Who’s my most valuable client?’ And he decided it was himself. So he decided to sell himself an hour each day. He did it early in the morning, working on these construction projects and real estate deals. Everybody should do this, be the client, and then work for other people, too, and sell yourself an hour a day.
Now, I’m sure just being a successful lawyer would be plenty for many people. But if you aren’t satisfied with your current situation, why not work for yourself an hour each day? Instead of just idle dreaming, set aside specific time for action. Perhaps the key is small chunks of time, but at regular intervals.
Example. If you’re an administrative assistant making $10 an hour and you don’t want to be, don’t just sign up to work another hour for $10. Working longer is not necessarily the best idea. Instead, give up the $10 (or $8 after taxes), and improve yourself in some way or create something so you’ll be making a lot more. There is no one solution, look into yourself. Nursing school? Investment books? Finding a mentor?
Finally, another quote from Charlie Munger about the desire for independence:
I had a considerable passion to get rich. Not because I wanted Ferraris – I wanted the independence. I desperately wanted it. I thought it was undignified to have to send invoices to other people. I don’t where I got that notion from, but I had it.
I think I’ll be buying a copy of Poor Charlie’s Almanack the next time I run low on things to read, even though it costs fifty bucks.
Update: I bought a copy of Poor Charlie’s Almanack and will be reviewing it shortly. I still think this idea of working for yourself for an hour each day is great advice and timeless.
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So true! A little bit here and there will always add up – for anything.
In my case, I spent an extra hour or two each day last year writing an eBook (a study guide actually), and have since sold it for over $100,000 in sales. I was working at the time, but was able to quite my job because of the 1 or 2 hours a day I sold to myself.
Great post!
The Snowball is one of my favorite books. The part about Charlie Munger taking an hour out of his day every morning in order to better himself, is how I also try to structure my life.
Best Regards,
Dividend Growth Investor
Thanks for sharing: I did not know Charlie got up one hour earlier to work on his real estate project. For me I got up earlier to watch TV: that’s the difference 🙂
Charlie Munger is quite a character. I borrowed his Poor Charile’s Almanack from local library (twice) to read it. Actually I think you can find some of his speeches (his book is a collection of speeches) online (just do a google search).
Most people spend more time watching TV than working. That’s why the U S is in deep trouble.
I wonder how widespread his sentiment about independence over Ferraris is. (Not to get too political, but) Dreams From My Father talks a bit about this, and I thought it did so eloquently. Reflecting on the awkwardness of his station in life vis-a-vis his relatives, he feels the “crude freedom of wealth.” Or something like that, I can’t find the exact quote again, but it resonates really strongly.
Awesome idea. I have started doing and am working on a book. It’s exciting!
What am I supposed to do for myself? Clean my own house? IT support? start some side business? I don’t understand… 🙁
The answer to that depends on what your goals are. For instance, mine is to have my own hunting show and be able to spend my time traveling the world and sharing my experiences on the Outdoor Channel. However, to do this, it’s important that I have cash flow. Therefore, I have invested several hours each week to learning specialized knowledge regarding real estate investing. I began this habit when I was 21 and now, at the age of 24, I have accumulated 6 rental properties that pay me for minimal time invested. I would suggest doing something you’re super passionate about or have a knack for. I would also recommend steering away from the employee/self employed mindset of only making money when you physically work (aka getting paid for your time) and learn various ways to make money in your sleep on the business/investing side (aka royalties from a book, blog, real estate, owning a business that you can hire out people, etc). To me, true financial freedom doesn’t necessarily mean high earning power, but instead, creating multiple sources of income that require very little of your own time after they have been built. In this way, you truly have the freedom to focus on the important aspects of life such as family, religion, friends, hobbies, making a difference, etc. I hope this helps in some way
Create an opportunity for good things to happen for you, because it is unlikely others will do it for you.
Learn a new skill. Improve yourself.
Go out and visit some foreclosures and do a cash-flow analysis.
Start a blog for fun about your passion (skiing? collecting gold coin? parenting? gadgets?) and see what happens.
Read about investing and see what your knowledge brings. My findings keep my portfolio low in costs, tax-efficient, and passively managed. Charlie’s and Warren’s did not, but I am not either of those guys.
I think most of us have an idea of what we’d like to try or what we’d like to become.
@ JoetheBankgeek
United States worker hours rank among the top 3 in the world.
Number of hours worked doesn’t mean anything, its efficiency that matters. Say if we ranked #1 in hours and #26 in efficiency that would be very bad indeed despite our #1 ranking.
i run.
i figure the savings of a few pairs of shoes vs heart disease, diabetes, etc will be substantial.
an hour, 4 days a week.
money saved is as good as money earned.
IJustin and Mike, think the point Charlie Munger was trying to make is that you should set aside some time to work on something for yourself as opposed to working only for the man. Its true working more hours doesn’t mean you are efficient. But if you set aside some time to work on something you love (or think could make you some $$) rather than just going to your day job that gives you a steady paycheck, then you’ll reap benefits in the long run. He wasn’t trying to say work an extra hour just to work an extra hour
Exactly auntie-green. If you’re an administrative assistant making $10 an hour and you don’t want to be, don’t just sign up to work another hour for $10.
Work for *yourself*, give up the $10 (or $8 after taxes), and improve yourself in some way so you’ll be making a lot more.
Great! Problem is that by the time I’m done putting in 12 hour days at my low paying job and then am finished with my 1 hour (each way – that includes the bus) commute, I’m too tired to do much of anything except cook dinner and tend to the house. My days off are taken up spending a little time with the family and taking care of household chores and grocery shopping. Some of the free time is spent looking for another job, but then I realize the wages on IT professionals (server administration/etc) have bottomed out. I’ve seen sysadmin job postings that pay $12/hr now, and they expect you to also function as desktop support and the DBA. I applied anyway but never heard back.
Anyway, maybe I should start a lemonade stand.. but right now I have to get back to work, breaktime is over. 😐
You are amazing and awesome. I’m really in awe at the books you read and the information you’re sharing with us.
I just took a basic excel class as a refresher through the SBA. I’ve had classes before but wanted to see what else I could learn. And for $30 I met other SBA people who told me about their free counseling services on starting a business. I’ve noted these things in my notebook as an ongoing idea of where I want to be.
Thank you!
Your reading suggestions and reviews are always invaluable. Thanks for sharing with us. I’m going to get the Almanack as soon as the one copy in my statewide library system gets back; perhaps you should consider trying the same, unless you prefer to own your books.
Not one copy of Poor Charlie’s Almanack available in my city! Apparently they are stolen very often due to their scarcity. 🙁
Try getting hold of Poor Charlie’s Almanack here in the UK if you think you’ve got problems…
Re: The hour a day strategy, the best hour both Charlie and Warren Buffett every spent was surely when they first agreed to meet up properly! 😉
Number of hours worked doesn’t mean anything, its efficiency that matters. Say if we ranked #1 in hours and #26 in efficiency that would be very bad indeed despite our #1 ranking.
No, efficiency matters to the business owner, but number of hours worked matters very much to the worker, in that the more hours worked, the less time the worker has to devote to the rest of her life, whether that’s spending time with her family, exercising, educating herself, or starting a side business.
Workers in emerging markets like India and China work more hours than those in developed countires but unfortunately they are advised against entering more than 8 hours in their timesheets. That is the reason countries like USA show up as top #3 in the number of hours worked. I am saying this from experience.
Buffet is great. Lots of wisdom.
This is some of the best advice you can share or take to heart. I was driving with my daughter today and she informed me, at age 9, that she doesn’t want to get a job when she grows up. After our conversation she is on her way to figuring out how to be independently wealthy so she can enjoy life.
I’ll have to pick this up.
One I’ve been intrigued by for the last twenty years, since I read it when I graduated from college was: Three boxes of Life. Unfortunately, I never implimented the concept in it. Check it out if you have not already.
I know personally I would rather own my own business before I work for someone else. Yes it involves risk but I can’t think of anything more rewarding. You live and prosper on your own merits.
I attended a workshop years ago where we were asked to find one noun and one adjective to describe ourselves. I chose “creative learner.” I was an art teacher, but I always considered myself a learner first. Maybe everyone needs to think about finding that description of oneself in order to decide what your passion is or where you want to go. I’ve always done creative things such as art, writing, photography. I was always anxious to learn a new skill. And I was willing to change with the times. I was one of the first people among my friends or fellow teachers to own a personal computer and soon switched to digital art. It was never to get a better job or to make money, although I did make some money from art work and writing. It was about expanding my mind, trying something new, self-satisfaction, staying sane, relieving stress.
I can imagine that many people with full-time jobs and families cannot find the time or energy to do anything other than vegetate in front of the TV each night. One simple and not-so-time consuming thing to do might be to spend 10 minutes with a journal. Write some random thoughts or ideas, good things that happened that day or draw a picture, attach a photo, make the journal whatever you want it to be.
Another option is to listen to audio books while driving to/from work. Most libraries have them and will even search across the state or country for a book they don’t have. Or put them on an iPod and listen while doing laudry, walking, working in the garden, cooking dinnner. For me, being able to “read” while doing something else is glorious. I suggest alternating a book that will expand your knowledge with a good fiction read for entertainment. (But I learn a lot from fiction, too.)
Now that I’m retired, I put in at least 8 hours/day doing things I love: reading, writing, walking, creating art or photography, watching a movie, playing digital games to keep my mind active. For me, that’s what retirement is. I can’t imagine how I ever had enough time to hold down a full-time job.
The best investment available to each of us is often ourselves! Education, training, practice–they all can pay off in a big way over the long run.
Working an hour for yourself is such great advice, even if you actually already love what you do. Anything that can make you better — more qualified, better educated, higher skilled — makes your value skyrocket and get you closer to your goals sooner!
Great article. I think I’ll have to read The Snowball, even if I have to get up an hour earlier every morning to have some spare time. 🙂
I’m struggling and working on the concept of finding a side hustle that I can grow, while still maintaining my employed responsibilities (50+ hours per week) and personal goals (running, 4-7 hours per week) and family commitments.
Don’t even suggest cutting back on t.v., I don’t have time to include it in the first place! I’d love to get a side hustle off the ground this year, and believe I will. Carving out the time is likely the first and most obvious step.