Remembering Charlie Munger: A Life of Wit and Wisdom Part 1 5/2/25
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Hi, this is CNBC's Becky Quick, the co-host of Squawk Box. Ahead of the 2025 Berkshire Hathaway Annual Shareholder Meeting, we're re-releasing our special podcast series on the life of billionaire Charlie Munger. A close friend of investor Warren Buffett and longtime vice chair of Berkshire Hathaway, died a few weeks shy of his 100th birthday in late 2023. What I am is a lover of the progress of civilization. That turns me on.

Munger was irreverent. He was one of a kind. He was the man Warren Buffett called the architect of Berkshire Hathaway. Hear his last interview in Charlie Munger, A Life of Wit and Wisdom, coming up next. Is there anything left on your bucket list? Anything you'd like to do? Well, that's an interesting question. I am so old and weak compared to what I was when I was 96. Alma loves it. I love it. Charlie loves it. We're glad to have you here. We're celebrating King Charles and

We've got our own King Charles here today. I would say that every time I'm with Charlie, I've got at least some new slant on an idea that causes me to rethink certain things. And we've had absolutely, we've had so much fun in the partnership over the years. It's been almost hilarious. It's been so much fun.

Charlie Munger was one of the smartest people I've ever met. He was an investor. He was a teacher. He was a Renaissance man who taught himself so many different things. And he was one of a kind. My father grew up in a world where if you wanted to go around Lincoln, Nebraska, you had to use a horse and buggy. In the 100 years I've lived, it's been even more remarkable. That's pretty much all of modern biology, modern medicine, modern chemistry.

I'm Becky Quick of CNBC, the co-host of Squawk Box, and the last time I interviewed Charlie Munger, of many times, he was 99 years old. It was Charlie at his best, 100% mental acuity, so thoughtful, and reflective in ways that he hadn't been before. There isn't any spending in the next world, not for Warren Buffett or Charlie Munger or anybody else. It turned out to be our last interview. He passed away two weeks later.

There is so much more to say, but Charlie can say it better than I can. We knew enough to take a good helping when we were over there tripping on the bike out. This is Charlie Munger, a life of wit and wisdom.

The last time I saw Charlie was at his home in Los Angeles, and it was just two weeks before he passed away. You wouldn't have guessed it. Obviously, when you're 100, there's no real surprise to hear about someone's passing, but it didn't seem imminent. And we talked a little bit about something that he had told Warren Buffett. I think he told Warren back when Warren was still in his 30s, maybe. At least that's how Warren remembers it.

Charlie, Warren Buffett told me that a long, long time ago. You told him he should write his obituary the way he wants it written and then live his life accordingly. Yeah, sure. I assume you've done the same thing for yourself. Well, no, I've written my obituary the way I've lived my life. And if people want to pay attention to it, it's all right with me. And if they want to ignore it, that's okay with me too. I'll be dead, but what difference does it make? All you succeed in doing in your life.

is to get early rich from passive holding of little bits of paper. And you get better and better at only that for all your life. It's a failed life. Life is more than being shrewd at passive wealth accumulations.

Charlie Munger was best known as Warren Buffett's right-hand man. Their investing partnership dates back decades. Warren has credited Charlie with teaching him the importance of paying up for high-quality businesses instead of just looking for really bargain basement prices on so-so businesses.

That willingness to pay for quality paid off for both of them in deals like their 1972 purchase of See's Candies and their decision in the late 1980s to buy a substantial stake in Coca-Cola, not to mention later stakes in companies like Apple.

Charlie Munger had really only been a part of Berkshire Hathaway dating back to the mid-1970s. That's when he formally got involved. But Charlie and Warren had been friends for long before that. Their friendship goes all the way back to a dinner they had in 1959 when they first got to know each other. At that point, Charlie was living in Los Angeles, but he grew up in Omaha just like Warren. Back in the 1960s, when they were first friends, they spent hours each week on the telephone talking about investments and theories about life.

Buffett actually urged Munger to trade in a career in law for one in investing. I met Charlie and he was practicing law and I told him that was okay as a hobby, but it was a lousy business. Fortunately, I listened. Munger formally joined Berkshire in 1978 as vice chairman. He was risk-averse, pragmatic. He's always been seen as sort of the moral compass of the company. He

He helped Berkshire Hathaway grow into a multi-billion dollar conglomerate that owns well-known businesses, everything from Dairy Queen and Geico to Helzberg Diamonds and Burlington Northern. They developed a public image as part of the Berkshire Hathaway shareholder meetings where they would hold court for hours, answering questions and offering some deadpan humor, too. What I needed to get ahead was to commit against idiots. And luckily, there's a large supply.

professional traders that go into trading cryptocurrencies, it's just disgusting. It's like somebody else is trading turds and you decide I can't be left out. Charlie's big on lowering expectations. Absolutely. That's the way I got married. My wife lowered her expectations.

Here they are at the 2023 Berkshire Annual Meeting in Omaha. They're touring one of many Berkshire businesses that exhibits there in the big hall. This one's a model from Clayton Holmes. Charlie lives in the house that he was building in 1959 when I met him. And I had just moved into my house in 1958. And we're both in the same houses. I don't know how many people...

that have changed their situation financially. I had a friend who built a marble palace in Beverly Hills, a marble stream that ran through the foyer. I went to dinner there and I said, you know, I don't need a marble stream. I think he fell into it eventually. Charlie built a little house for me in the back. But he's

I've got one house still. And how many houses do you have? Seven. What? Seven. Seven. Yeah. He's real estate poor. I went to Los Angeles the second week of November to meet with Charlie. Hey, Charlie, first of all, I just want to thank you for inviting us to your home today and for hosting us here. We appreciate it. It's easier for me. Not harder. Easier.

We sat down in the backyard of his home, a home that he has lived in for the last 70 years. I'm not doing you a favor. I'm doing myself a favor and inconveniencing you. We appreciate it. We like being here. Listen, Warren and I both lived in the same house for decade after decade after decade. All our friends get rich and build bigger and better houses. And naturally, we both considered bigger and better houses. And I had a huge number of children, so it was...

justifiable even. And I still decided not to live a life where I looked like the Duke of... ...Wichester or something. And I was going to avoid it. I did it on purpose. I didn't think it would be good for the children. That it would spoil them? Yeah. It's... When you're in a rich family, you think your duty is to use the wealth to live grandly.

That's what everybody's doing with the money. You will learn from the people who are doing it. Is the plan for your life, the obituary you would write in your 30s the same you would write today? Sure. I basically believe in the soldier-on system. Lots of hardship will come and you're

You've got to handle it well by soldiering through. And a few rare opportunities will come. You've got to learn how to recognize them when they come and not make too minor a trip to the fight counter when the opportunity is available. And those are simple lessons.

Talking to someone who has lived a century really helps you put things in perspective. I mean, this country isn't even 250 years old yet. So Charlie Munger was around for 100 years of that. Charlie is someone who lived through World War II, grew up in the Great Depression. This is the greatest generation. And when you talk to Charlie, you see why.

So Charlie, you were born on the first day of 1924. You have seen a century of history. I lived in the aftermath of a previous century of history. In fact, you could argue that about 90% of the progress of man has happened in civilization, has occurred in the last two centuries.

and that I lived in the immediate aftermath of one. That's when they opened all these coal mines and created all these steam engines and so on. And of course that's what brought the economic system up so man had enough leisure, enough time to think when he wasn't getting enough food to eat. So it was an amazing time to be born and to be born in the place

in that century where all the growth was going to occur. And then you come along in 1924. Immediately after that, my father grew up in a world where if you wanted to go around Lincoln, Nebraska, he had to use a horse and buggy. There was no car. There was no broadcasting. It was a very different world. The railroads were primitive. And that's what he grew up in.

But the last two centuries created almost all the growth. Before that, everybody's, not everybody, but like something 80% of all people are farmers. And what's happened over the last 100 years has been pretty remarkable too. Yes, in the 100 years I've lived, it's been even more remarkable. That's pretty much all of modern biology, modern science.

medicine, modern chemistry. Just imagine what the world would be like. We had photographs for a hundred years before we had modern chemistry. But now it was done by a guy who was a natural, very good chemist. But nonetheless, he created a mighty company, a great growth stock and so forth.

and it finally wiped out the shareholders in bankruptcy. - Eastman Kodak. - Yes, Eastman Kodak, which is an amazing story that could happen. And of course, it helped me because if somebody is brilliant as old Eastman,

and somebody who hired as many brilliant people as Will Leesman did could take the company into bankruptcy. I figured that lesser people could easily take big companies into bankruptcy eventually, in spite of their best efforts. It wasn't like Kodak didn't try. They hired the most brilliant graduate students. They gave them all kinds of time to think.

They learned everything any important man on earth learned as quickly as they could and so on and so on. And even so, they wiped out the common shareholders. And that taught you what as an investor, as a businessman? Sure. And I was going to be a common shareholder someday in some

and it would help me to know that it was very easy to wipe out the common shelters, even a great company run by a genius. Let me ask you about the Great Depression. You were just a child then. I know your family struggled. Yeah, but I was an unusual child, and I was curious, and I saw what was happening.

And it was just clobbering my family everywhere it looked. It wasn't a little clobber. It was a major clobber. What happened? Well, my mother had two sisters and my father had two sisters. And all four of those sons-in-law who were my uncles got utterly clobbered by the Great Depression. One was an architect and the other just stopped building practically everything. And he finally got a job somewhere.

doing drafting work for the County of Los Angeles. And they paid him $108.08 per month for doing that drafting work, which was above what they would have paid an architect, but not much above. And that's what he was earning. And then they passed the FHA rules, and that was competitive civil service examination.

and he was a brilliant man, and so he took the examination and came in first. They made him chief architect for the FHA in Los Angeles, which is a huge program during the '30s to revive at least some building. And he set the standards for that. He wouldn't let the subdivider get by with much. You know, there was a rule as to how many electrical outlets there had to be in every bedroom. And he'd make them put in the right number instead of the lesser number.

That was an important job, builders under depression incentives being what they would naturally be and a good architect being what he would naturally be. The FHA, which was then fostering a great percentage of the total building that was going on in terms of houses, just said, "If you're going to build a house, you got to have so many outlets for a bedroom."

Well, it was useful work my uncle was doing. He was enough of an architect that he could force in a little bit of grace too as well as the right number of electrical outlets. One of the things he was very interested in was the plaster screen. It's a tiny little incremental cost to stick a little

thing on the bottom of the flaster as it comes to the end near the ground. And you put in that flaster screen, it can't suck that water out of the ground into your flaster. He made out, my uncle made everybody put in a flaster screen. And saved all these houses as a result. Yes, yes, yes. And of course, was a good example for somebody like me.

to watch that being done. To put in the hard work early on and the extra step. The extra thing that could be added at a tiny incremental cost and would last for 100 years. Wow. You saw your family getting clobbered on all sides on the Depression. Yes. One was an architect. One was a builder who was broke. He had loans he wasn't even paying off from the '20s. Boom. Bubble. When he was a builder.

And he made himself an appraiser. And finally, he was Omaha's best appraiser. And he made a good living, too. But he had terrible years in the early 30s. And he had a terrible medical problem. It's one of his children died very slowly of meningitis. And it cost a lot of money. He just couldn't pay it.

He had not paid off that fully until the war came. He finally paid it off and got quite prosperous in the post-war vote. But he had a long period of his being utterly without money. He moved into an extra house that my Grandfather Russell owned.

And that at least didn't have to pay rent. What did all these impressions mean for you? I mean, these are formative years for you as you're watching this. Well, this is quite serious. A little boy of his cousin who's the same age is dying next door and it takes forever and calls the fortune. And there's no money.

to pay the doctors, the hospitals, anything. That's a serious growing up experience. People don't realize how high the death weight was among children until about the middle of the century that preceded the one in which I was born. And if you wanted, you know, in those days if you wanted three children, you had six and you shoveled three out of the graveyard before they even grew up. That was the system.

That was mankind's system. That's an awful system. It was an awful system. When we come back, Charlie Munger as Warren Buffett's closest advisor and how the pair made the most of their investing opportunities. We knew enough to take a good helping when we were over there tripping on the bike out of it.

Bye.

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USAA knows dynamic duos can save the day, like superheroes and sidekicks, or auto and home insurance. With USAA, you can bundle your auto and home and save up to 10%. Tap the banner to learn more and get a quote at USAA.com slash bundle. Restrictions apply. This is Charlie Munger, a life of wit and wisdom. I'm Becky Quick. Thanks for joining us.

Charlie, let's talk a little bit about bureaucracies, because you have duly noted the problems with bureaucracies, whether it be a big company, whether it be the government. Have I ever. Right. So how would you fix some of the bloated bureaucracies out there? Let's start with the federal government. That comes in my too hard pile. I can't tell you how to do that. That would be really hard because you have the problem of A, figuring it out and B, getting it done.

And to solve both those problems are really, that is really climbing a, it's like picking the high pick on Everest and saying, I'll waltz up there in a day, you know. You aren't going to waltz up there. It takes several days to do. There was a presidential candidate who recently said,

that his solution for that would just be to fire everybody in the federal government whose social security number ends with an odd number. Does that sound like a good way to fix it? No.

It does not. It's too arbitrary. It may be that you need some bigger fix than that. And it may be you're never going to get it, too. It may be that it's just something like old age that we're never going to get rid of. But you are still a believer in the need for a government. Of course. I'm a...

If you get right down to it, what I am is a lover of the progress of civilization. That turns me on. Oddly enough, the man whose name I bear, my father's father and my father's mother, both thought exactly the same way. And the great moral book, they took me to church in the Presbyterian Church and all that, and Sunday school to take my lessons and all that. But when they really wanted to teach me something, it turned them on.

It was the legend of Robinson Crusoe created by Daniel Defoe. They just loved that guy creating a little English civilization and I got him Bacon Island. And that he could do it if he worked at it. And of course that was the lesson they were trying to teach the grandchildren. And I was so amused by it, I could see immediately what they were trying to do. And I could see immediately they were right.

Of course, even if you're given a goddamn stethodont, you turn into a civilization if you can. Civilization is important. I accepted all those moral lessons. Now, they never said this is what we're trying to teach you, A, B, C. But they did make me read Robinson Crusoe, not just every week, but every night. Before I went to bed, I got a little dose of Robinson Crusoe. I was a little tiny boy.

And of course it was good for me. And of course I never got over it. My grandfather's teaching worked. That was a funny way to raise grandchildren. And I was the first grandchild on that side. And so I went down and lived there for weeks on end sometimes. Then I was lucky with my ancestors on the other side of the family. I am very good at learning things from dead people. That's what everybody should learn.

And so I had one grandfather on the other side whose life never overlapped mine. He was dead before I was born. But he was the richest man in his town and had an immense old house. And he invited all the grandchildren to come in and stay every summer, as many of us wanted. And of course, it's fun to go stay with a rich old grandfather.

You know, kind of owns the town. And he was the majority owner of the main bank. And his army's a grandchildren. And the old man had been a pioneer. He'd come there as a pioneer and lost all his money in some bank failure in the East. So from absolute nothing as a pioneer in Iowa, he eventually made himself the richest man in his town and so forth. What he loved to do was talk.

about the hard old days of living in a sod house, which is a cave. You moved into a cave in the winter. How many people want to raise two little children in a cave? You can imagine yourself doing it? No. An Iowa winter living in a cave with two little children. Well, that's what he gave his wife in marriage. And they, from that poor start, ended up with this huge success. And

by the standards of his time and place. But Grandfather Abraham just talked endlessly about the inner days and how he'd surmounted all these hardships. And what he taught the grandchildren of a fiscal nature, he says, "You know," he says, "people think Iowa's the best farmland in the world and I own a lot of it." And he says, "It looks pretty easy looking back in retrospect, but it was damn hard, I want you to know." And he said, "When they give you a real opportunity,

The world's not going to do it very often. And you're only going to get three or four of these invitations to the pie counter. And when you get your invitation, for God's sakes, don't take a small helping. He basically said, lever up when you're sure you're right. And of course, that's good advice. But be sure you're right is what makes it hard.

I thought, "How can you be sure you're right?" You can't do it very often. There's a few times in a lifetime. Even if you're a Grandpa Ingham or a Warren Buffett, you only get a few trips to the pie counter. If you take out of Warren Buffett's life the 10 most important trips to the pie counter, the whole record would look like dung. It would be just worthless. We knew enough that

Take a good helping when you're over the trip from the bike counter. Now, we did take way smaller a helping than we could have easily handled. Berkshire could easily be worth twice what it is now. And the extra risk we would have taken would have been practically nothing. All we had to do was do a little more leverage that was easily available. In hindsight, you're glad you didn't? Just from the potential risk? It's an interesting example. The reason we didn't.

is the idea of disappointing a lot of people who had trusted us when we were young under a thing that left us. If we lost three quarters of our money, we were still very rich. That wasn't true of every shareholder. Losing three quarters of the money would have been a big letdown. So we were very cautious in dealing with our shareholders' money. If Warren and I had owned Berkshire without any shareholders that we knew, we would have made more. We would have used more leverage.

It's interesting that a man who started out to be a lawyer ended up with an identity that's more like a guru's than a lawyer's. I called you a lawyer once, and I think that was the most irritated you've ever been with me, because that was how you started things, but you really...

Have studied every field out there and tried to take things from different studies and different models in life. That was what I would call naturally arrogant. And I wasn't that good a mind. I was in the top 1%, but no prodigy. So I never would have succeeded in a field that required a mind to be that of a prodigy. But it was a much better mind than ordinary people had.

And I recognized that quite early and I just played the hand I was dealt. When did you recognize that? Were you a child still? Very young. When I was taking courses in grade school, I was often revising the textbook and the course in my head to make it more correct because I realized the professor was doing it wrong.

Age 10, are we talking? Yeah, sure. What kind of things would you recognize that they were doing wrong? For instance, my Latin teacher was a maladjusted

woman who was a devote follower, Sigmund Freud. And I recognized that Sigmund Freud was a horse's ass when I first read him when I was in high school. And of course, it was an odd little boy whose Latin teacher is teaching him Freud. But she was peculiar and so was I. And of course, when I read, I bought the complete writings of Sigmund Freud from the American Library. It was one big book.

And I went through it very laboriously. And I realized he was a goddamn lunatic. And so I decided I wasn't going to learn that from my Latin teacher. The best teacher I had in my life was Lon Fuller. But he was the best contracts teacher in any law school. And contracts is the best subject in every law school. At least I think it is. Because it integrates so beautifully with the

new doctrine of economics that came along with Adam Smith and all those people. Of course, I could see the integration and so could this Lon Fuller, who was a damn contract teacher. Now, he'd been the leading contract teacher in some other law school. That's what got him to Harvard by transfer, which was rare in those days. I was just awestruck.

We'll be right back.

Bye.

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At age 99, Charlie is an incredibly impressive man, a learner, someone who's been a lifelong learner. It didn't start overnight. It's something that he started even as a child. He had some pretty unusual people that he modeled himself after, even when he was very, very young.

He looked all the way back to the founding fathers of this country. Let's talk about Benjamin Franklin. Yeah. He's one of the framers of our nation. He very famously gave out very... And he was a prodigy. And he was a prodigy. And he trained himself in lots of different disciplines. Well, and he self-trained himself with like two years of grade school education. This is a very remarkable thing. And when he found late in life,

He needed something like algebra. He went back and pulled down the textbook and taught himself algebra. How could a man who taught himself everything, you know, like Latin, how could a man like that go to so many different fields and be the top guy in the whole country?

And we were lucky to have him. Yes. You found Ben Franklin when? How young were you when you first came across what Ben Franklin did? Well, I think high school. I liked the mixture of financial life and regular life. And I couldn't copy. I didn't have any musical ability. And so, Franklin played four different musical instruments. One

One of which he invented. This is a lot of musical ability that God simply left out of me. You started out in college at the University of Michigan. Yes. You were young when you went there because you had skipped some time in grade school. And you went for mathematics. Why did you choose mathematics? Because I could get an A in it without doing any work. Laughter

That's why I took mathematics. And then World War II interrupted things. You were 17 still when Pearl Harbor happened. Then I decided that biology was not the proper science to handle a war, so I took physics. And then you focused on... No, I didn't take it very much because as soon as I'd mastered the first part of physics, I actually entered the Air Force Corps as a private.

and marched around in some field in the middle of winter and slept in a tent. And I must have say it was pretty damn unpleasant to be outside in the winter, sleeping in a tent. Look, this is the middle of November. We're in Southern California. Look at it. Yeah, this is pretty nice. Yes. And of course, I noticed that it was like that. It wasn't like that in Omaha at the time I was at Caltech.

And it was the middle of the winter and it was like this. And so I naturally thought this is better. - Yes, I understand why you moved permanently. - I don't know what it takes to live to 100.

But I do know all of the people I know at or near that age are incredibly active still. Even if their body fails them from time to time, their brains are incredibly active. They stay young. They have curiosity. They read voraciously. And Charlie is the best example of that. I know reading is the one way that you say the only way people can really get smart. You don't know anyone who's gotten smarter who doesn't read a lot. Well,

Well, yes, even the fiction of the world, which includes a good deal of the Bible. The Bible and the Shakespeare and the great novels and all that stuff. People were good at painting pictures and painting and telling stories. And people learned best when the

When they learn a story, it looks more like a piece of a life story. So it works. What are you reading right now? People know I'm not on books. So what do they do? They send me books, gifts. So I get so many books in this house as gifts. I no longer buy books. I just select from those that people give me. Now, I would guess that that would happen. Would I be sitting 99 years old?

All over the world, people who speak a different language, Indian or Hindu or Chinese. I think I heard that you've been binge watching Seinfeld. Is that right? Well, I've finally gotten so I've seen so many reruns twice that I don't want to see them a third time. But I do like a bunch of self-centered people making the wrong decisions. It is ridiculous. And these people go out of their way to get insane reviews.

worries and so on. And they solve some of their problems with humor. It's a show about nothing, though. Yes, yes, but it's not really about nothing. It's about the humor of life being used to make life quite endurable by kidding one another, which is what they're doing because they're really kidding the audience. They are amusing us all.

Thank you for listening to Charlie Munger, A Life of Wit and Wisdom. This is an expanded podcast version of the Berkshire Hathaway vice chairman and legendary investors final interview. Please listen to part two. Charlie and I talk about his greatest investments, building Berkshire with Warren Buffett and his personal philosophy soldiering through.

If you soldier through, you can get through almost anything. It's your only option. You can't bring back the dead. You can't cure the dying child. You can't do all kinds of things. You have to soldier through, and you just somehow you soldier through. USAA knows dynamic duos can save the day, like superheroes and sidekicks or auto and home insurance. With USAA, you can bundle your auto and home and save up to 10%. Tap the banner to learn more and get a quote at USAA.com slash bundle. Restrictions apply.