40 Years, 40 Lessons

Forty life lessons — with a Kingswell twist

I turn 40 years old today. 🎉

To commemorate the occasion, I’ve compiled forty quotes and lessons that particularly resonate with me. And I’ve tried to do it with a Kingswell twist — tying many of them to the timeless teachings of Warren Buffett, Charlie Munger, and the other characters who regularly appear in these pages.

First off, though, I’d like to lay out my plans for the near future of this newsletter. I couldn’t be more excited about the future of Kingswell and sincerely appreciate everyone’s support over the last eighteen months.

Starting this month, I will be releasing one additional “bonus” each month for paid supporters. I haven’t worked out all of the details yet, but the first one will be an annotated transcript of Todd Combs’s recent interview with the NFM podcast — complete with footnotes that provide additional information and context to Combs’s statements. (It will be similar to my Charlie Munger transcript from February.)

But notice that I said “bonus”. This will not affect free subscribers, who will continue to receive 1-2 articles (including The Berkshire Beat) each week per usual.

I truly appreciate everyone who takes the time to read this newsletter. Thanks for everything!

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If you follow me on Twitter, then you probably know that I love a good Warren Buffett quote or two. So I’ve gathered together some of my favorites — plus some additional bits of wisdom from others — into a list of the forty lessons that I’ve learned in my forty years of life.

(1) Take care of yourself. “You have only one mind and one body for the rest of your life,” says Buffett. “If you aren’t taking care of them when you’re young, it’s like leaving [a] car out in hailstorms and letting rust eat away at it. If you don’t take care of your mind and body now, by the time you’re forty or fifty, you’ll be like a car that can’t go anywhere.”

With over 70% of American adults classified as overweight — and 42% obese — we’re not doing a very good job at treating our bodies like the once-in-a-lifetime gift that they are. Decades of successful compounding will mean very little if we’re not around to enjoy the spoils.

(2) And, sometimes, that means ignoring the examples set by your role models and heroes. In other words, when it comes to your health, listen to what Buffett preaches — not what he practices. The Oracle of Omaha might be the only person on the planet who can drink can after can of Cherry Coke and make regular trips to McDonald’s and Dairy Queen — and still remain healthy at 92 years of age. Maybe it’s genetics, maybe his prodigious brainpower burns off all those extra calories, maybe it’s something else entirely. All I know is that The Buffett Diet doesn’t work for me.

(3) Guard against jealousy. “Envy is a really stupid sin because it’s the only one you could never possibly have any fun with,” says Charlie Munger. “There’s a lot of pain and no fun. Why would you want to get on that trolley?” Jealousy is a corrosive, counter-productive, and pointless waste of time. Just say no to the green-eyed monster.

(4) Shoot your shot. It sounds cliche, but you’ll regret not taking chances. Take Todd Combs, for example. While running a little-known fund in Connecticut, he cold-called Charlie Munger’s office in hopes of setting up a meeting with the legendary investor. After navigating his way past Munger’s assistant, Combs scored a sit-down with Munger — which resulted in a fast friendship and, ultimately, Combs’s job at Berkshire Hathaway. All because he picked up the phone and took a shot.

(5) A little humility can go a long way. “We have two classes of forecasters,” John Kenneth Galbraith once said. “Those who don’t know — and those who don’t know they don’t know.” In life, no one likes a know-it-all. And, in the money game, such an attitude can be downright fatal. Get used to saying, “I don’t know.”

(6) Correct course as quickly as possible. Successful investors are often contrarians. And, for better or worse, contrarians tend to be stubborn. Don’t fall into that trap. When Munger showed Buffett a better way to invest his money — prioritizing excellent businesses with franchise and brand power — the Oracle could have blown off his friend’s advice. After all, Buffett’s partnership had thrived (to put it mildly) by applying Benjamin Graham’s cigar-butt philosophy. But, instead, he swallowed his pride and changed course — much to Berkshire Hathaway’s ultimate benefit.

(7) “Praise by name, criticize by category.” This Buffett quote pretty much speaks for itself.

(8) And don’t be stingy with the praise. Every year, whether in the annual letter or at the shareholders meeting, Buffett sings the praises of the men and women who run Berkshire’s many subsidiaries. It’s not the kind of phony, rah-rah platitudes that other CEOs dole out — but, rather, a genuine expression of gratitude for a job well done.

(9) Small acts of kindness can pay big dividends. Buffett’s penchant for praise does not go unnoticed. In fact, it just might explain his uncanny ability to get founders to spurn retirement — and, instead, keep their noses to the grindstone — after joining the Berkshire family. “I’ve turned over all my shares to my children,” says Ike Friedman of Borsheim’s, “but now I’m working harder than ever — because there’s nobody like Warren Buffett as a human being.”

(10) Weak minds complain. Strong minds adjust. “Both Warren and I sometimes wonder what would have happened if we’d started in better businesses instead of trading stamps, aluminum, and textile companies,” says Munger. “We even had a windmill company at one time. It took us a long time to wise up.”

Buffett and Munger didn’t wallow in their early mistakes. Instead, they buckled down, made hard decisions, and turned Berkshire — a dying textile company — into a money-spinner. Even if you’re dealt a bad hand, play it as well as you can.

(11) Heed the truth — no matter how it is told. “We often refuse to accept an idea merely because the tone of voice in which it has been expressed is unsympathetic to us,” said Friedrich Nietzsche.

(12) You don’t have to do extraordinary things to get extraordinary results. “Some people think that if you jump over a seven-foot bar that the ribbon they pin on you is going to be worth more money than if you step over a one-foot bar,” says Buffett. “And it just isn’t so in the investment world — at all.”

(13) Control your temper. “You can always tell someone to go to hell tomorrow,” said Tom Murphy. There’s no expiration date on an angry outburst — but no rewind button, either. Rather than saying something in the heat of the moment that you’ll later regret, remain calm and coolly assess your options before making any move.

(14) Do the work. “Most people would probably be surprised how few people actually read annual reports and 10-Ks — let alone trade magazines and so forth,” says Todd Combs. “I still read trade magazines and they’re a phenomenal source of information.” So many of us cut corners and do the bare minimum needed to get by. If you really dive into whatever you’re doing — and commit to putting in the work — you’re already ahead of the game.

(15) Ignore the doubters (including yourself). There’s never a perfect time to start any big project or dream. Even Warren Buffett was warned to hold off on starting his first investment partnership. “When I got out of Columbia, the two people I respected most in the world — my dad and Ben Graham — both thought it was a terrible time [to enter the securities business] … Both of them thought that it might be a good idea to wait a while. I had about $10,000 then. If I’d waited, I’d probably still have $10,000.”

(16) Embrace a messy start. If you wait until you have the perfect tools and process, you’ll be waiting forever. When Buffett opened his partnership in 1956, he masterminded the complex operation from a sunroom adjacent to his bedroom — in a rented house with a young family to support. Hardly ideal circumstances for success, but he didn’t let that stop him.

Your time is better spent making an imperfect start — even one filled with mistakes — than sitting around waiting for everything to be just so. Start now and iterate as you go.

(17) Never stop learning. “Anyone who stops learning is old,” said Henry Ford, “whether at twenty or eighty. Anyone who keeps learning stays young. The greatest thing in life is to keep your mind young.”

(18) Widen your aperture. “One of the things I’ve learned a lot from Warren … is he’s absolutely spectacular about keeping a very wide aperture,” says Todd Combs. It would be very easy for Buffett and Munger to adopt a self-satisfied attitude towards life, resting on the laurels of their legendary accomplishments.

Not so.

Both men remain insatiably curious — and continually strive to expand their circles of competence. How else could a “technophobe” like Buffett end up buying 5.8% of Apple?

(19) Just don’t stretch yourself too thin. “Our job is to find a few intelligent things to do,” says Munger, “not to keep up with every damn thing in the world.” You don’t have to be right about the things you ignore, Buffett adds.

(20) Make friends with the eminent dead. “Some of my best friends don’t even know I exist,” admits Lex Fridman. “Actually, most of my friends are dead.” He, of course, is referencing the one-way friendships that we build with writers and thinkers when we study their work. For this very reason, Charlie Munger is an avid reader of biographies.

Crack open an old book and let Father Time be your curator. There’s more timeless wisdom in a single chapter of George Goodman or Fred Schwed’s writing than can be found in a lifetime subscription to the Wall Street Journal. (No offense, WSJ.)

(21) You can’t opt out of the money game. “You’re always gonna have to play it — no matter what your profession — so learn how to play it well,” Lauren Templeton’s father once told her. This quote is basically the mission statement for Kingswell.

(22) Real wealth is time, not money. “Your calendar is a better measure of success than your bank account,” says bestselling author James Clear. I don’t know if money can buy happiness, but an empty calendar sure can.

(23) Commit yourself to rationality. “If you stay rational yourself, the stupidity of the world helps you,” says Munger. If you can’t understand it, don’t do it. In fact, Munger’s lasting wish is that others will follow in his footsteps by embracing rationality and eschewing lesser behaviors. “I would like my legacy to be a more relentless determination to develop and use what I call an uncommon sense.”

(24) Accept who you are — and who you are not. “The cheetah looks at the squirrel and wonders why it can’t climb trees,” says David Perell. “The squirrel looks at the bird and wonders why it can’t fly. The bird looks at the cheetah and wonders why it can’t run fast.” Cultivate your intrinsic talents — don’t fight them.

(25) No debt. “If you’re smart, you don’t need debt,” says Buffett. “If you’re dumb, [debt] is poisonous.” Particularly consumer debt like credit cards.

(26) To win big in life, you need to help everyone around you win big, too. “98.5% of my net worth is in Berkshire stock,” says Buffett, “and it’s all going to charity. My goal is for my last check written in the world to bounce.” Lots of options to help others: earmark part of your estate for charitable causes, provide a helping hand to the next generation through mentorship, or donate your time by volunteering.

(27) Every day is an opportunity to reinvent yourself. “You have just as much right to rise from the ashes as anyone else,” says SelfMadeMastery on Twitter. “Even if those ashes came from a fire you started yourself.” You owe the past no loyalty. You are not required to be the same person you were even five minutes ago.

(28) Find the lesson in every setback. Don’t ask, “Why is this happening to me?” Instead, “What is this trying to teach me?”

(29) Send thank-you notes. Bonus points if they’re hand-written. “Posting a letter and getting married are among the few things left that are entirely romantic; for to be entirely romantic, a thing must be irrevocable,” said G.K. Chesterton.

(30) Live a life of gratitude and abundance. I’m about the farthest thing you’ll ever find from a new-age, hippie type. But it’s undeniable that living life with a spirit of gratitude and abundance will lead to great things. Share your talents and knowledge. You’ll get back much more than you ever expected.

(31) Going your own way may not be popular, but it’s (usually) worthwhile. “It took Noah twenty years to build an ark,” says Buffett. “People said he was being silly because the skies were beautiful. And, of course, the whole time, he looked stupid — until it started raining. You can spend a long time building an ark while everybody else is out there enjoying the sun.”

(32) Visualize your goal and, then, work backwards from there. “You should write your obituary and figure out how to live up to it,” Buffett said earlier this year. So, to piggyback off Buffett’s example, if you want the kind of obit that will inspire others, write it out and then determine what you need to do to make it happen.

(33) But, ultimately, it’s all about the journey. “You know a man is really at his best, his most fulfilled, when he’s on the way to becoming what he’s going to become,” says Mister Johnson (Fidelity’s Edward C. Johnson II) in The Money Game. “After he’s become it, he loses an infinitesimal bit of sharpness, like a star after his best role.”

(34) Don’t major in minor things. It’s way too easy to get bogged down on the unimportant minutiae of life. Allocate the vast majority of your time and attention to the big stuff — and send everything else packing.

(35) Earn mailbox money. “Life is about more than working hard,” says Buffett. “Plenty of people went to work early and left late while losing to Charlie Munger, who was raising an army of kids. He found a way to get mailed checks.” Work smarter, not harder. And building streams of passive cash flow is just about as smart as it gets.

(36) Choose optimism. “The world is indeed full of peril, and in it there are many dark places,” wrote J.R.R. Tolkien, “but still there is much that is fair, and though in all lands love is now mingled with grief, it grows perhaps the greater.”

(37) Some things can’t be rushed. “You can’t produce a baby in one month by getting nine women pregnant,” Buffett once quipped. The best things in life take time.

(38) Aim for wisdom. “Knowledge is knowing that a tomato is a fruit,” says British journalist Miles Kington. “Wisdom is knowing not to put it in a fruit salad.”

(39) Don’t take unnecessary risks. “When forced to choose, I will not trade even one night’s sleep for the chance of extra profits,” says Buffett. Peace of mind is priceless. That’s one of the reasons I like Berkshire so much. Not much chance of waking up to find a Buffett- or Munger-related scandal splashed across the headlines.

(40) Family comes first. “I don’t keep score [with investing],” says Peter Lynch. “I’ve got ten grandchildren … That’s what I keep score on.” In 1990, at the height of his fame, Lynch walked away from money management to spend more time with his family. His all-too-rare decision to prioritize his wife and daughters — at the possible expense of an extra zero or two of net worth — should be an example to us all.

Thanks for reading along and celebrating my 40th birthday with me!

(And I can’t imagine any better birthday gift than a few more paid supporters!)