1: Growing up, billionaire Charlie Munger learned an important lesson from his father.
His dad was a lawyer. “One of his best friends, Grant McFayden, Omaha’s Pioneer Ford dealer, was a client,” Charlie writes in Poor Charlie’s Almanack.
“He was a perfectly marvelous man, a self-made Irishman who’d run away uneducated from a farm as a youth because his father beat him,” he notes. “So he made his own way in the world. He was a brilliant man of enormous charm and integrity—just a wonderful, wonderful man.”
Charlie’s father had another client “who was a blowhard, an overreaching, unfair, pompous, difficult man,” he remembers.
“And I must have been 14 years old or thereabouts when I asked, ‘Dad, why do you do so much work for Mr. X, this overreaching blowhard, instead of working more for wonderful men like Grant McFayden?'”
His dad responded: “Grant McFayden treats his employees right, his customers right, and his problems right. And if he gets involved with a psychotic, he quickly walks over to where the psychotic is and works out an exit as fast as he can.
“Therefore,” he said, “Grant McFayden doesn’t have enough remunerative law business to keep you in Coca-Cola. But Mr. X is a walking minefield of wonderful legal business.”
Charlie was trained as a lawyer but eventually left the law business to join forces with Warren Buffett at Berkshire Hathaway.
2: Getting better at getting better is what RiseWithDrew is all about. Monday through Thursday, we explore ideas from authors, thought leaders, and exemplary organizations. To end each week, I’ve been sharing some of Charlie’s wit and wisdom. This is my twentieth and final post on Charlie.
His father’s story taught Charlie a vital lesson: “As you go through life, sell your services once in a while to an unreasonable blowhard if that’s what you must do to feed your family. But run your own life like Grant McFayden.”
Looking back, Charlie admires his father not only for the lesson but for the clever way he taught it.”
“Instead of just pounding it in, he told it to me in a way that required a slight mental reach. I had to make the reach myself in order to get the idea that I should behave like Grant McFayden. And because I had to reach for it, he figured I’d hold it better.
“And, indeed, I’ve held it all the way through until today, through all of these decades. That’s a very clever teaching method.”
3: Which may also explain something else about Charlie. He was well-known for relying on a specific set of mental models to make decisions. While he talked extensively about the power of mental models, he never shared those models he relied upon in a simple, comprehensive fashion.
“Good literature makes the reader reach a little for understanding. Then it works better. You hold it better,” he reasons. “If you’ve reached for it, the idea’s pounded in better.”
His father’s lesson stuck: “I’ve been trying to imitate Grant McFayden ever since, for all my life,” Charlie writes. “I may have had a few lapses. But at least I’ve been trying.”
More next week!
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