Read on Twitter
Charlie Munger has said that accumulating the first $100,000 from a standing start, with no seed money, is the most difficult part of building wealth.
Making the first million was the next big hurdle. To do that a person must consistently underspend his income
1/
Making the first million was the next big hurdle. To do that a person must consistently underspend his income
1/
Getting wealthy, he explains, is like rolling a snowball.
It helps to start on top of a long hill—start early and try to roll that snowball for a very long time.
It helps to live a long life.
There is another quote from him from a shareholder meeting:
2/
It helps to start on top of a long hill—start early and try to roll that snowball for a very long time.
It helps to live a long life.
There is another quote from him from a shareholder meeting:
2/
“The first $100,000 is a bitch, but you gotta do it.
I don’t care what you have to do—if it means walking everywhere and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000.
After that, you can ease off the gas a little bit.” 3/
I don’t care what you have to do—if it means walking everywhere and not eating anything that wasn’t purchased with a coupon, find a way to get your hands on $100,000.
After that, you can ease off the gas a little bit.” 3/
Just for reference, $100,000 in 1960 has the same purchasing power as $875,065 today.
Perhaps the modern version of this story is that the first million is the hardest. 4/
Perhaps the modern version of this story is that the first million is the hardest. 4/
The first $100,000 is the hardest
https://www.dividendgrowthinvestor.com/2020/06/the-first-100000-is-hardest.html
https://www.dividendgrowthinvestor.com/2020/06/the-first-100000-is-hardest.html
Charlie has said the following about his net worth:
For the first 13 years I practiced law, my income [from practicing law] was $300,000 total.
At the end of that 13 years, what did I have?
A house, 2 cars and $300,000 of liquid assets
5/
For the first 13 years I practiced law, my income [from practicing law] was $300,000 total.
At the end of that 13 years, what did I have?
A house, 2 cars and $300,000 of liquid assets
5/
Everyone else’d have spent that slender income, not invested it shrewdly, and so forth.
I just think it was, to me, it was as natural as breathing, and of course I knew how compound interest worked!
6/
I just think it was, to me, it was as natural as breathing, and of course I knew how compound interest worked!
6/
I knew when I saved $10 I was really saving $100 or $1,000 [because of the future growth of the $10], and it just took a little wait.
And when I quit law practice it was because I wanted to work for myself instead of my clients, because I knew I could do better than they did 7/
And when I quit law practice it was because I wanted to work for myself instead of my clients, because I knew I could do better than they did 7/
Charlie became financially independent in 1962 at 38
The median value for an LA area house in 1962 was about $15K, while median cost of a new car was about $3K
This all up means his net worth in 1962 was about $321k
That's when he started his real estate development firm 8/
The median value for an LA area house in 1962 was about $15K, while median cost of a new car was about $3K
This all up means his net worth in 1962 was about $321k
That's when he started his real estate development firm 8/
