Warren Buffett's Life Advice Will Change You - One of the Greatest Speeches Ever | Berkshire 2023
[Transcript]
J.C.
ood afternoon Mr. Buffett, Mr. Munger. Could you please advise us on what major mistakes we should avoid in both investing and in life? I would also like to have Mr. Munger’s thoughts too, please. Thank you very much.
WARREN BUFFETT
Charlie said the major mistake you could make, you know, you’re lucky if you’re in the United States. If you go around the world you don’t have a lot of choices in some places.
But you should write your obituary and then try and figure out how to live up to it.
And, you know, that’s something you get wiser on as you go along. The business mistakes, you just want to make sure you don’t make any mistakes that take you out of the game or come close to taking you out of your game. You should never have a night when you’re worried about investing, I mean, assuming you have any money to invest at all.
And you should just spend a little bit less than you earn. And you can spend a little bit more than you earn, and then you’ve got debt, and the chances are you’ll never get out of debt. I’ll make an exception in terms of a mortgage on your house.
But credit card debt, and we’re in the credit card business big time, and we’ll stay in the credit card business, but why get behind the game? And if you’re effectively paying 12% or 14% or whatever percent you’re paying on a credit card, you know, you’re saying, “I’m going to earn more than 12% or 14% of my money.”
And if you can do that, come to Berkshire Hathaway. So, it’s, I hate to say this when Charlie’s around me, but it’s straight out of Ben Franklin. I mean, (LAUGH) and it’s not that complicated. But you, well, I’ll give you a couple lessons.
You know, Tom Murphy, the first time I met him, said two things to me. He said, “You can always tell someone to go to hell tomorrow.” Well, that was great advice then. And think of what great advice it is when you can sit down at a computer and screw your life up forever by telling somebody to go to hell, or something else, in 30 seconds. And you can’t erase it.
And, you know, haven’t lost the option. And he said, you know, “Praise my name, criticize my category.” Well, what makes more sense than that? I mean, who do you like that criticizes you all the time? And you don’t need to vilify anybody to make your point on subjects of discussion.
And then the other general piece of advice, I’ve never known anybody that was basically kind that died without friends. And I’ve known plenty of people with money that have died without friends, including their family. But I’ve never known anybody, and you know, I’ve seen a few people, including Tom Murphy Sr. and maybe Jr., who’s here, (LAUGH) but certainly his dad, I never saw him, I watched him for 50 years, I never saw him do an unkind act.
I didn’t see him do very many stupid acts either. I mean, it wasn’t that he was non-discriminating, he just decided that there was no reason to do it. And wow, what a difference that makes in life. Charlie?
CHARLIE MUNGER
Well, it’s so simple to spend less than you earn, and invest shrewdly, and avoid toxic people and toxic activities, and try and keep learning all your life, et cetera, et cetera, and do a lot of deferred gratification because you prefer life that way.
And if you do all those things, you are almost certain to succeed. And if you don’t, you’re going to need a lot of luck. And you don’t want to need a lot of luck. You want to go into a game where you’re very likely to win without having any unusual luck.
WARREN BUFFETT
I’d add one more thought too, you need to know how people can manipulate other people, and you need to resist the temptation to do it yourself.
CHARLIE MUNGER
Oh yes, the toxic people who are trying to fool you or lie to you or aren’t reliable in meeting their commitments. A great lesson of life is get them the hell out of your life.
WARREN BUFFETT
Yeah.
CHARLIE MUNGER
And do it fast. (APPLAUSE) Do it fast.
WARREN BUFFETT
And I would add, Charlie would totally agree with me, do it tactfully, if possible, too. (LAUGH) But do get them out of your life.
CHARLIE MUNGER
Yes. Yeah, I don’t mind a little tact. (LAUGHTER) Or even a little financial cost. But the question is getting them the hell out of your life.
(Source: https://buffett.cnbc.com/2023-berkshire-hathaway-annual-meeting/)
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[YAPSS Takeaway]
“Praise my name, criticize my category.” ~Tom Murphy
