Charlie Munger on reliability and education
Poor Charlie’s Almanack is a book comprising a series of talks by the billionaire Charlie Munger, former Vice Chairman of Berkshire Hathaway. While much of the book focuses on his approach to investing, there are some good takeaways for parenting.
Reliability
In the first talk in the book, Munger talks about his rules for life. His first is to be reliable, which he describes as “faithfully doing what you have engaged to do”. Anyone can be reliable; you don’t need a high IQ or athletic prowess, but you do need consistency, follow-through and integrity. As he edited this idea later, he commented:
“As I review in 2006 this talk made in 1986, I would not revise a single idea. If anything, I now believe even more strongly that 1) reliability is essential for progress in life and 2) while quantum mechanics is unlearnable for a vast majority, reliability can be learned to great advantage by almost anyone.”
Being reliable is certainly a foundational element of almost any successful career. How, then, can we teach this to our children?
Fortunately, at the beginning of the book, there are some letters from Munger’s children and stepchildren, and in one of them, we get a glimpse of how he taught the principle of reliability. His stepson Hal Borthwick writes:
“One of my jobs as a driving-age teen was to pick up and deliver the housekeeper from the town of Cass Lake. This wasn’t just a drive down the street; the boat had to be driven across the lake to the marina, where I would hop into the car and drive into town, and then the process was reversed. Part of my job in the morning was to pick up a newspaper while I was in town.
Well, one day, a big storm blew in: rain, waves, wind etc. big time. With all the excitement and difficulty, I did get to town in the morning and returned with the housekeeper, but I forgot the paper. Charlie and I had a one-second or so discussion after I answered the question “Where’s my paper?” in the negative. “Go back and get the paper, and never forget it again!”. So back I went through the storm to get the paper, bouncing in the waves with rain sheeting off the boat, thinking to myself that I wasn’t going to allow anything like this ever to happen again.”
In short, he taught his children reliability by not accepting unreliability. He put his stepson through the discomfort of having to correct his actions. He also must have commanded much respect from the teenager, Hal, for him to have gone straight back rather than telling his stepfather no.
I like this story because it gives us a tool for intentionally teaching our children the values we want them to have. We can call this one ‘holding the bar’ for them. Where Hal had accepted he would not deliver the paper that day, Munger held the bar for him and told him he absolutely would deliver on what he was supposed to.
Or he just really wanted his paper that day.
Education
The other idea from the Almanack that I want to share is about education, or what Munger calls “building elementary worldly wisdom”. Munger credits a lot of his success with understanding the foundational mental models of many disciplines. He talks of about a hundred mental models that should be studied to really understand the world and, for him, different investment opportunities.
He ranks these models according to how foundational they are overall. For example, models from the hard sciences of maths, physics and chemistry come first, economics and psychology come after. The mental models he speaks of are things like distributions from mathematics, thermodynamics from physics, agency loss from economics and social proof from psychology. A good list can be found here. A strong understanding of these hundred or so mental models (and an ability to run through them in rank order against a checklist) creates for him a “lattice on which all knowledge or information hangs”.
More importantly, they enable him to think independently because he has a set of structured tools through which to assess information. In a world of increasing information and disinformation, one of the greatest gifts we can give to our children is the ability to think independently and rationally.
Our children aren’t going to learn these models comprehensively in school or even in University, and Munger didn’t learn them in any formal education. He learned through reading voraciously, which is accessible to almost anyone and has a much lower cost than tertiary education. We can teach these models to our children in two ways: 1) actively including them in our discussions of the world (for example, talking about how ecosystems work when out in nature) and 2) as they get older, helping them build a reading list that covers these ideas.