One of Munger's most classic speeches: How to live a rational and enjoyable life?

This article is a speech by Charlie Munger at the graduation ceremony of the University of Southern California Law School in 2007, compiled from: Yuedu Library

Some of you may find it strange that someone so old can still give a speech. Well, the answer is obvious: he is not dead yet.

Anyway, I think it is appropriate for me to be here giving a speech. I have raised many children myself, and I know that they are truly more honorable than the students sitting in front of me wearing graduation gowns. Parents have put in a lot of effort to nurture their children and impart wisdom and values to them, and they should always be respected.

I have written down a few key points for today's speech, and I will now introduce the principles and attitudes that have been most useful to me. I don't think they are perfect for everyone, but I believe that many of them have universal value and are tried and true principles.

If you want something, make yourself deserving of it

Which important principles have helped me? I was very fortunate to understand at a young age that the most reliable way to get something you want is to make yourself deserving of it. This is a very simple principle, the golden rule.

You should learn to treat others as you would like to be treated. In my opinion, this is the spirit that lawyers and everyone else should have. In general, people who possess this spirit can win many things in life, not just money and fame. They also win respect and naturally gain the trust of those they interact with. Being able to earn the trust of others is a very joyful thing.

Sometimes you may find that some complete scoundrels die wealthy and famous, but the vast majority of people around them believe that they deserved their fate. If the church is full of people attending the funeral, most of them are there to celebrate the fact that this guy has finally died.

This reminds me of a story: there was such a scoundrel who died, and the priest said, "Would anyone like to come forward and say something good about the deceased?" No one came forward, and no one came forward for a long time. Finally, someone stood up and said, "Well, his brother was even worse."

This is not the outcome you want, a life that ends with such a funeral is not the life you want.

True love should be based on admiration

The second principle that I understood at a young age is that true love should be based on admiration, and we should love those who have educational significance for us. I have understood and practiced this principle throughout my life. The love depicted by Somerset Maugham in his novel "Of Human Bondage" is a pathological love, it is a disease, and if you find yourself with this disease, you should quickly cure it.

There is one principle that is very important, and that is that you must commit to lifelong learning. Without lifelong learning, you will not achieve great success. Relying solely on existing knowledge will not take you far in life. After leaving here, you must continue to learn in order to go further in life. Let's take Berkshire Hathaway, one of the most respected companies in the world, as an example. Its long-term large-scale investment performance may be the most outstanding in human history. The methods that have made Berkshire Hathaway earn a lot of money in this decade may not be as effective in the next decade, so Warren Buffett has to become a constantly learning machine.

The same requirement applies to a lower level of life. I constantly see some people improving their lives, even though they may not be the smartest or the most hardworking. But they are learning machines. Every night when they go to sleep, they are a little smarter than they were that morning. Children, this habit is very helpful for you, especially when you have a long way to go.

You can only make progress after you have learned the method of learning

Alfred North Whitehead once said something very true. He said that only when humans "invent the method of invention" can human society develop rapidly. He was referring to the tremendous growth of per capita GDP and many other good things that we take for granted today. Human society only experienced significant development a few hundred years ago, before that, the progress made in each century was almost zero.

Human society can only develop after inventing the method of invention. Similarly, you can only make progress after learning the method of learning.

I am very fortunate. I learned the method of learning before attending Harvard Law School. In my long life, nothing has been more helpful to me than continuous learning. Take Warren Buffett as an example. If you observe him with a stopwatch, you will find that half of his waking time is spent reading. He spends most of the remaining time having one-on-one conversations with very talented people, sometimes over the phone, sometimes in person. These are people he trusts and who trust him. If you observe carefully, Warren is like a scholar, even though he is very successful in secular life.

The academic world has many valuable things. Not long ago, I encountered an example. I am the chairman of a hospital board and I came into contact with a medical researcher named Joseph Mira. This gentleman is a medical doctor who, after years of research, has become the most knowledgeable person in bone tumor pathology in the world. He wanted to spread this knowledge and improve the treatment of bone cancer. How did he do it? Well, he decided to write a textbook. Although I think this textbook can only sell a few thousand copies at most, cancer treatment centers around the world bought it.

He took a year off, digitized all the X-rays, carefully preserved and organized them. He worked 17 hours a day, seven days a week, for a whole year. That's also a vacation. At the end of his vacation, he wrote one of the best bone tumor pathology textbooks in the world. If your value is similar to Mira's, you can achieve as much as you want.

Continuously learn the most important knowledge points of various disciplines and practice them continuously

Another lesson that was very useful to me is what I learned in law school. At that time, a joking professor said, "What is a legal mind? If two things are intertwined and have an impact on each other, and you only focus on one of them and completely ignore the other, thinking that this way of thinking is practical and feasible, then you have a legal mind." "I know he's being sarcastic when he talks about that 'legal' method, it's ridiculous.

This gave me a great inspiration because it prompted me to learn all the important principles in every discipline, so that I wouldn't become the fool that the professor described. Since the truly important truths make up 95% of each discipline, it's not that difficult for me to absorb 95% of the knowledge I need from all disciplines and make them part of my thinking habits.

Of course, once you have mastered these principles, you must put them into practice. It's like being a pianist, if you don't practice continuously, you won't be able to play well. So in my life, I constantly practice this interdisciplinary approach.

This habit has helped me a lot. It makes life more enjoyable, allows me to do more things, makes me more constructive, and makes me very wealthy, which cannot be explained by talent alone. My thinking habits are really helpful as long as they are put into the right practice.

But this habit can also be dangerous because it is so useful. If you use it, you will easily surpass experts from other disciplines (even your boss) and hurt them. You will often find that your knowledge is richer than your boss's and that you can solve the problems he encounters. Sometimes you will know the right answer when he is at a loss.

Encountering such a situation is very dangerous because your correctness makes people with status and position lose face. But I haven't found a perfect way to avoid being seriously hurt by this problem.

Hide your wisdom until others discover it

Although I was good at playing cards when I was young, I wasn't good at concealing my thoughts when I thought I knew more than my superiors. I didn't make a conscious effort to hide my thoughts, so I always offended people.

Nowadays, people usually see me as an old man without malice who is about to die, but in the past, I had a difficult time. I advise you not to follow my example, but rather learn to hide your wisdom.

I have a colleague who graduated first in his class from law school, worked at the Supreme Court in the United States, and was a lawyer when he was young. At that time, he always appeared knowledgeable. One day, the senior partner of his firm called him into the office and said, 'Listen, Chuck, let me explain something to you. Your job and responsibility are to make the client think he is the smartest person in the room.

If you have any energy left after completing this task, you should use it to make your senior partner look like the second smartest person in the room. Only after fulfilling these two obligations can you show yourself.'"

To have a cross-disciplinary mindset and develop your own thinking framework

People must have a cross-disciplinary mindset in order to live efficiently and maturely. Here, I would like to quote an important idea from Marcus Tullius Cicero, one of the greatest lawyers in ancient times. Cicero has a famous saying, he said, "If a man does not know what has happened before he was born, he will always remain a child in life." This principle is absolutely correct. Cicero rightly mocked those who are ignorant of history. But if you extend Cicero's statement, I believe you should do so: besides history, there are many other things that people must understand.

These so-called "many other things" are the important ideas of all disciplines. However, if you simply memorize knowledge in order to achieve good grades in exams, this knowledge will not be of much help to you. You must master a wide range of knowledge and let them form a mental framework in your mind, so that you can automatically apply them in the days to come.

If you can do this, I solemnly guarantee that one day you will unconsciously realize, "I have become one of the most efficient people among my peers." On the contrary, if you don't make an effort to practice this interdisciplinary approach, many of the smartest people among you will only achieve mediocre results, or even live in the shadows.

To better solve problems, try to learn reverse thinking

I have discovered another principle in the story that Dean MacFarlane just told. The countryman in the story said, "If I knew where I would die, I would never go there." Although the words of the countryman may sound absurd, they contain a profound truth. For complex adaptive systems and the human brain, problems often become easier to solve if you adopt reverse thinking. If you think about the problem in reverse, you can usually think more clearly.

For example, if you want to help India, the question you should consider is not "How can I help India?" Instead, you should ask, "How can I harm India?" You should find the things that can cause the greatest harm to India and then avoid doing them.

Perhaps logically, the two approaches are the same, but those who are proficient in algebra know that if a problem is difficult to solve, using reverse proof often solves it easily. Life is similar to algebra, and reverse thinking can help you solve problems that cannot be solved by positive thinking.

Let me use a little reverse thinking now. What makes us fail in life? What should we avoid? Some answers are simple, such as laziness and lack of integrity will lead to failure in life. Even if you have many advantages, if you lack integrity, you cannot avoid a tragic outcome. So you should develop the habit of keeping your promises. Laziness and lack of integrity are obviously to be avoided.

Get rid of selfishness and biases, jealousy, resentment, and self-pity

There is a psychological factor called "self-serving bias" that often leads people to do foolish things. It is often subconscious, and everyone is inevitably influenced by it. You think that "self" has the right to do whatever it wants, such as overdrawing income to meet its needs. What's wrong with that?

There was a person in the past who was the most famous composer in the world, but he lived a miserable life most of the time, partly because he always overdrew his income. That composer was Mozart. Even Mozart couldn't escape the harm of this foolish behavior, so I think you should not try it either. In general, jealousy, resentment, hatred, and self-pity are all disastrous states of mind. Excessive self-pity can lead to near-paranoia, which is one of the most difficult things to reverse. You should not get caught up in self-pity. I have a friend who carries a stack of cards with him. Whenever someone expresses self-pity, he slowly and dramatically takes out that stack of cards and hands the top one to the person speaking. The card says, "Your story has touched me. I have never heard of anyone as unlucky as you."

Whenever you find yourself feeling self-pity, no matter the reason, even if it's because your child has cancer and is about to die, you must remember that self-pity is of no use. In such moments, you should give yourself one of my friend's cards. Self-pity always has a negative impact and is a wrong way of thinking. If you can avoid it, your advantage will far outweigh that of others.

You must also eliminate the preference for self-service in your thinking habits. Don't think that what benefits you is beneficial to society as a whole. Don't use this subconscious self-centeredness to justify your foolish or evil behavior. That is a terrible way of thinking. You must free yourself from this mindset because you want to be wise, not foolish, and you want to be a good person, not a villain.

In your cognitive actions, you must allow others to have a preference for self-service. Because most people cannot completely eliminate this mindset, that's just human nature. If you cannot tolerate others showing a preference for self-service in their actions, then you are the fool.

The legal counsel of Solomon Brothers, who was once a student editor of the Harvard Law Review, is a smart and noble person, but I witnessed him ruin his own future. At that time, the capable CEO said that a subordinate had made a mistake, and the general counsel said, "We have no legal obligation to report this, but I believe it is what we should do. It is our moral responsibility."

Legally and morally, the general counsel was correct, but his approach was wrong. He suggested that the CEO, who was already overwhelmed with work, do something unpleasant. The CEO kept pushing it off because he was busy, which is completely understandable. He didn't intentionally make a mistake.

In such a situation, the correct persuasion technique is the one Benjamin Franklin pointed out. He said, "If you want to persuade someone, appeal to their interests, not their reason." The general counsel should have said, "If this situation continues, it will ruin you. It will destroy your reputation and your family. My advice can save you from utter destruction." This approach would have been effective.

You should appeal to interests rather than reason, even when your motives are noble.

Avoid perverse incentive mechanisms and work with admired individuals

You should avoid being driven by perverse incentive mechanisms. Don't put yourself in a situation where the worse or more foolish you perform, the more rewards the perverse incentive system offers. Perverse incentive mechanisms have a powerful control over human behavior, and people should avoid being influenced by them. In the future, you will find that some law firms have particularly long working hours, at least a few modern law firms are like this. If I have to work 2,400 hours a year, I won't be able to survive, and that will bring me a lot of problems. I won't accept such conditions. I can't deal with the situation that some of you will face, and you will have to figure out how to handle these important issues on your own.

Abnormal working relationships should also be avoided. You should especially avoid working under people whom you do not respect or do not want to be like. It is very dangerous. Everyone is to some extent controlled by authority figures, especially those authority figures who provide us with returns.

To deal with this danger correctly, you must have both talent and determination. When I was young, my approach was to find someone I respected and then find a way to work under them, but without criticizing anyone. This way, I usually could work under a good leader. Many law firms allow this as long as you are smart enough to handle it properly.

In short, working under someone you admire will make the achievements you make in life more satisfying.

Maintain objective habits and checklists

Develop some habits that allow you to remain objective and impartial. We all remember how Darwin paid special attention to contradictory evidence, especially when he refuted a theory that he believed in and loved. If you want to make as few mistakes as possible when thinking, you need such habits.

People also need to develop the habit of checking checklists. Checklists can prevent many mistakes, not just for pilots. You should not just have a broad knowledge base, but also list them in your mind and then use them. There is no other way to achieve the same effect.

Life is full of competition, strive to become the most capable and willing to learn

Another important principle I think is that maximizing inequality often produces remarkable results. What does this mean? John Wooden provides an exemplary example. Wooden was once the best basketball coach in the world. He told five lower-level players, "You won't get any playing time, you are practice players."

Almost all the games were played by the seven higher-level players. These seven players learned more, don't forget the importance of being a learning machine—because they enjoyed all the game time. When Wooden adopted an unequal approach, he won more games than before.

I think life is like a game and is full of competition. We should let those who are most capable and willing to become learning machines play the greatest role. If you want to achieve very high achievements, you must become such a person. You don't want your child to have brain surgery done by one of the 50 doctors who take turns doing surgery.

You don't want your plane to be designed in a too egalitarian way. You don't want Berkshire Hathaway to adopt such a management style. You want the best players to play for a long time.

Having true abilities, not parroting knowledge

I often tell a joke about Max Planck.

After winning the Nobel Prize, Planck gave lectures all over Germany, with similar content each time, all about the new theory of quantum physics. Over time, his driver memorized the content of the lectures. The driver said, "Professor Planck, it's getting boring for us to do this all the time. How about this: let me give the lecture in Munich, and you can sit in the front row wearing my driver's cap. What do you think?"

Planck said, "Sure." So the driver went up to the podium and gave a long speech about quantum physics. Later, a physics professor stood up and asked a very difficult question. The speaker said, "Wow, I didn't expect to encounter such a simple question in a city as advanced as Munich. I would like to invite my driver to answer it."

I tell this story not to praise the protagonist for being clever. I believe that knowledge in this world can be divided into two types: Planck knowledge, which belongs to those who truly understand. They have put in the effort, and they possess that ability. The other type is driver knowledge. They have mastered the skill of parroting; they may have nice hair; their voices are usually pleasant; they leave a deep impression on people.

But in reality, what they possess is driver knowledge disguised as real knowledge. I think I just described all the politicians in the United States. If you want to strive to become someone with Planck knowledge in life and avoid becoming someone with driver knowledge, you will encounter this problem. At that time, there will be many powerful forces opposing you.

To some extent, my generation has let you down. We have left you a mess. Now, most of the legislators in the California legislature are foolish leftists and foolish rightists, and there is not a single one of them who can be removed. This is what my generation has done for you. But, you wouldn't like tasks that are too simple, right?

Do what you are most interested in and work hard to deserve it and your partners

If you really want to excel in a certain field, you must have a strong interest in it. I can force myself to do many things quite well, but I cannot excel at something that I am not deeply interested in. To some extent, you are similar to me. So if you have the opportunity, find a way to do the things that you have a strong interest in.

Also, you must be very diligent. I really admire hardworking people. All the partners I have encountered in my life have been extremely diligent. I think the reason I was able to partner with them is partly because I worked hard to deserve them, partly because I shrewdly chose them, and partly because I was lucky.

In my early business, I had two partners who started a construction design and construction company together during the Great Depression. They made a simple agreement: "If we fail to fulfill our commitments to clients, we will work 14 hours a day, 7 days a week until we complete them." Needless to say, as you can imagine, the company was very successful. My two partners were highly respected. Their simple old-fashioned mindset almost certainly provided a good result. Turning setbacks and troubles into opportunities for growth

In life, you may encounter heavy blows and unfair setbacks. Some people are able to overcome them, while others cannot. I believe that the attitude of Epictetus can guide people to respond correctly. He believed that every misfortune in life, no matter how unlucky, is an opportunity for growth. He believed that every misfortune is a chance to learn a lesson.

People should not sink into self-pity, but should use each setback to improve themselves. His viewpoint is very correct and has influenced the greatest Roman emperor, Marcus Aurelius, as well as many others in the centuries that followed.

I also have a simple saying. My grandfather Munger was once the only federal judge in his city. I admire him greatly. One of his values was that frugality is the servant of responsibility. When Munger was a federal judge, the widows of federal judges did not receive pensions. So if he didn't save money, my grandmother would have become a destitute widow. In addition, having extra money allowed him to better serve others. Because he was such a person, he lived within his means throughout his life and left his widow with a comfortable living environment.

You may say, "Who would expect troubles to come in life all the time?" Well, that's exactly how I am. Throughout this long life, I have always been expecting troubles to come. Now that I am 84 years old, I have lived a life of being favored, just like Epictetus. I always anticipate troubles and prepare myself for how to deal with them when they come, and it doesn't make me unhappy at all. It doesn't harm me in any way; in fact, it helps me greatly.

The highest level of civilization is a seamless web of trust among all parties

Because there are many procedures and red tape in the industry you are about to enter, the last thing I want to tell you is that complex bureaucratic procedures are not the best system for a civilized society. The best system is a seamless, non-bureaucratic web of trust. There shouldn't be too many fancy procedures.

There should only be a group of reliable people who trust each other correctly. That's how the operating room at Mayo Clinic works. If the doctors there were like lawyers, setting up many cumbersome rules like legal procedures, more patients would die.

So when you become lawyers, never forget that although you have to follow procedures in your work, you don't always have to be led by them. You live in a world where you should strive to cultivate a seamless web of trust as much as possible. If the prenuptial agreement you draft is 47 pages long, then I suggest you reconsider getting married.

Well, I've talked enough at this graduation ceremony (University of Southern California). I hope these old people's ramblings are useful to you. Finally, I would like to end this speech with the words that the Truthslinger in John Bunyan's masterpiece "The Pilgrim's Progress" could possibly say in his old age: "My sword is passed on to those who can wield it."