April 24, 2014

If Charlie Munger Didn’t Quit When He Was Divorced, Broke, and Burying His 9 Year Old Son, You Have No Excuse

At 31 years old, Charlie Munger was divorced, broke, and burying his 9 year old son, who had died from cancer.  By the time he was 69 years old, he had become one of the richest 400 people in the world, been married to his second wife for 35+ years, had eight wonderful children, countless grandchildren, and become one of the most respected business thinkers in history.  He eventually achieved his dream of having a lot of money, a house full of books, and a huge family.  But that doesn’t mean he didn’t face unbelievable challenges and tragedies.

Charlie Munger at Berkshire

Charlie Munger at Berkshire, Made Available Through Attribution License by Nick

In 1949, Charlie Munger was 25 years old. He was hired at the law firm of Wright & Garrett for $3,300 per year, or $29,851 in inflation-adjusted dollars as of 2010. He had $1,500 in savings, equal to $13,570 now.

A few years later, in 1953, Charlie was 29 years old when he and his wife divorced.  He had been married since he was 21.  Charlie lost everything in the divorce, his wife keeping the family home in South Pasadena.  Munger moved into “dreadful” conditions at the University Club and drove a terrible yellow Pontiac, which his children said had a horrible paint job.  According to the biography written by Janet Lowe, Molly Munger asked her father, “Daddy, this car is just awful, a mess.  Why do you drive it?”  The broke Munger replied: “To discourage gold diggers.”

Shortly after the divorce, Charlie learned that his son, Teddy, had leukemia.  In those days, there was no health insurance, you just paid everything out of pocket and the death rate was near 100% since there was nothing doctors could do.  Rick Guerin, Charlie’s friend, said Munger would go into the hospital, hold his young son, and then walk the streets of Pasadena crying.

One year after the diagnosis, in 1955, Teddy Munger died.  Charlie was 31 years old, divorced, broke, and burying his 9 year old son.  Later in life, he faced a horrific operation that left him blind in one eye with pain so terrible that he eventually had his eye removed.

It’s a fair bet that your present troubles pale in comparison.  Whatever it is, get over it.  Start over.  He did it.  You can, too.  It is The Cinderella Principle.

  • Michael Clay

    This is one of the most inspiring things I have read in a long time. I usually have a “glass half empty” mindset. Like Charlie, I am 31 years old….like Charlie, I dealt with a son who had leukemia. Unlike Charlie, I am happily married to a supportive wife, I am not broke, and I get to celebrate this year that the chemotherapy and advancements in medicine have saved my son’s life. I have a lot to be thankful for and any present troubles are really no comparison. Thanks for posting this; it really puts everything into perspective.

  • Joshua Kennon

    You’re falling prey to the halo and horns effect of psychology. You can read about it here: http://www.joshuakennon.com/mental-model-horns-effect-and-halo-effect/

    Charlie Munger’s personal beliefs have no influence whatsoever on whether or not his ideas are good or bad. An idea is a self-contained thing. It is either useful, profitable, and beneficial to humanity or it is not.

    If I say, “We should water plants to make them grow” it is either a true statement or it is not. Whether I am a Christian, atheist, or believe in the Church of the Flying Spaghetti monster, it has no influence on the idea itself. Either the idea is wise or it is not. Either it is true or it is not.

    Munger has talked about his personal beliefs, both religious and political, at various shareholder events over the years. He doesn’t bring it up because it is inconsequential to the discussion.

    If you can’t get past the horns and halo bias, from the comments I heard personally over the years at the stockholder meetings, he tends to skew far to the right of Warren Buffett on most matters.

    P.S. Secular Humanism and belief in God are not mutually exclusive. They are not two sides to a coin or opposing forces. Some of the founding fathers were deeply religious and radical secular humanists. The entire American governmental system is built upon a foundation of secular humanism borne out of the 18th Century Enlightenment movement in Europe. Men like Locke had a vastly more profound impact on the formation of the Republic than, say, the Christian Bible did. That didn’t in any way negate the deeply held belief of several of those founders as to the divinity of Christ or the importance of God.

  • FratMan

    Have you ever written a letter to Charlie?

    • Joshua Kennon

      Oddly enough, no. Perhaps because I was introduced to his intellectual framework as an adult so all the big stuff – how to value a business, how to think about costs, etc. – had already been settled in my mind.

      I also keep detailed case studies of the people I admire so I typically know what is going on, in so far as it can be known. Right now, for example, he is in a … fight is not quite the right word … with Brentwood because he has been trying to develop something called Green Hollow Square. I look at the size, location, economics of it, and see if there is anything to learn. Digging into records, and reading a lot, it’s fairly easy to reverse engineer most things so I can get an idea of what he considers appropriate or how he does business.

      I’d love to meet him but not just to “meet Charlie Munger”, but to have a conversation. Most of it probably wouldn’t even be related to finance – it would be things like whether the electoral college still has use in a republic like ours today or whether or not a global financial system is even feasible based on psychological factors.

  • Amanda Altamirano

    Stupid article. Just another loser, losing his way all the way through life. No one ever reports that he was an ass as the reason for his first divorce. On the brink of stepping off into an etenity in hell. So just “how???” successful WAS he??