the record wouldn’t have been as good. And we were so extreme about it that we both spent the better part of our days reading, so we could learn more, which is not a common pattern in business…. We don’t read other people’s opinions. We want to get the facts, and then think.7
In the following excerpt from an October 2013 interview in Fortune, Buffett and Munger discuss how they were able to leap ahead of their peers and competitors:
Munger: We’ve learned how to outsmart people who are clearly smarter [than we are].
Buffett: Temperament is more important than IQ.
Munger: The other big secret is that we’re good at lifelong learning. Warren is better in his seventies and eighties, in many ways, than he was when he was younger. If you keep learning all the time, you have a wonderful advantage.8
Is there a better investment than self-improvement? Here is what Buffett has had to say on the topic:
“The best investment you can make is an investment in yourself.”
“The more you learn, the more you’ll earn.”
“Learn from your mistakes, and the mistakes of others.”9
Self-improvement is the best way to spend some of your time every day. And finding the time to read is easier than you think. One way to make this happen is to carve out an hour of each day just for yourself. If you need inspiration, consider how Munger would sell himself the best hour of each day.
In an interview for his authorized biography, The Snowball, Buffett shared this story about Munger:
Charlie, as a very young lawyer, was probably getting $20 an hour. He thought to himself, “Who’s my most valuable client?” And he decided it was himself. So he decided to sell himself an hour each day. He did it early in the morning, working on these construction projects and real estate deals. Everybody should do this, be the client, and then work for other people, too, and sell yourself an hour a day.10
It is essential to understand the opportunity cost of this one hour. On one hand, you can indulge in getting dopamine-laced rushes from emails and social media feeds while multitasking. On the other hand, you can dedicate the time to deep work and self-improvement. An hour’s time spent acquiring in-depth knowledge about an important principle pays off in the long run. This current investment is minuscule compared with the significant net present value that results over a lifetime. It is akin to buying a dollar for less than one cent. This is why good books are the most undervalued asset class: the right ideas can be worth millions, if not billions, of dollars over time.
Time is a resource that becomes increasingly scarce for everyone with each passing second. Learn to value your time highly. Buffett avoids long daily commutes to work for this very reason. No matter how much money you have, you can’t buy more time. We each have only twenty-four hours available to us every day. Time is the currency of life that appreciates in value the more it’s spent. Minimize your commute time to work and outsource all of the noncore time-consuming menial tasks to free up valuable time for self-development. The extra money spent on these small luxuries will pinch initially, but over time, you will realize that it was well worth it. In the long term, the daily investment in learning something new and improving yourself goes a long way. So, the best investment of time is to invest in personal development. I hope the time you are investing in reading this book today yields positive results for the rest of your life. After having successfully achieved financial freedom through my passionate pursuit of lifelong learning, I can happily say that I am a better investor because I am a lifelong learner, and I am a better lifelong learner because I am an investor.
It seems fitting to end this chapter with the golden words of wisdom from two of the greatest learners and thinkers to have ever lived.
An investment in knowledge pays the best interest.
—Benjamin Franklin
Develop into a lifelong self-learner through voracious reading; cultivate curiosity and strive to become a little wiser every day.
—Charlie Munger
Those who keep learning, will keep rising in life.
—Charlie Munger
The body is limited in ways that the mind is not. In fact, by the time most people are forty years old, their bodies begin to deteriorate. But the amount of growth and development that the mind can sustain has no limit.
Reading keeps our mind alive and growing. That’s why we should inculcate a healthy reading habit. Reading is also meditative and calming.
Books are truly life changing, particularly once you’ve developed the habit of reading every day while watching your every thought. The neuronal connections that compound through the effort will make you an entirely new person after a few years.
Warren Buffett and Charlie Munger estimate that they spend 80 percent of their day reading or thinking about what they have read.
Therein lies the secret to becoming smarter.
The way to achieve success in life is to learn constantly. And the best way to learn is to read, and to do so effectively.
When someone asked Jim Rogers what was the best advice he ever got, he said it was the advice he received from an old man in an airplane: read everything.
All successful investors have a common habit. They just love to read all the time.
As Munger says, “In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time—none, zero. You’d be amazed at how much Warren reads—at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out.”1
Vicarious Learning
The reading of all good books is like a conversation with the finest minds of past centuries.
—René Descartes
There is no better teacher than history in determining the future…. There are answers worth billions of dollars in a $30 history book.
—Bill Gross
Throughout the course of humanity, we have been recording knowledge in books. That means there’s not a lot that’s new; it’s just recycled historical knowledge. Odds are that no matter what you’re working on, somewhere, someone who is smarter than you has probably thought about your problem and put it into a book. Munger says:
I am a biography nut myself. And I think when you’re trying to teach the great concepts that work, it helps to tie them into the lives and personalities of the people who developed them. I think
