You squander time as if you drew from a full and abundant supply, though all the while that day which you bestow on some person or thing is perhaps your last. You have all the fears of mortals and all the desires of immortals. You will hear many men saying: "After my fiftieth year I shall retire into leisure, my sixtieth year shall release me from public duties." And what guarantee, pray, have you that your life will last longer? Who will suffer your course to be just as you plan it? Are you not ashamed to reserve for yourself only the remnant of life, and to set apart for wisdom only that time which cannot be devoted to
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any business? How late it is to begin to live just when we must cease to live! What foolish forgetfulness of mortality to postpone wholesome plans to the fiftieth and sixtieth year, and to intend to begin life at a point to which few have attained!
Life is too short to waste. Samuel Johnson said: "It matters not how a man dies, but how he lives. The act of dying is not of importance, it lasts so short a time." We only have one life so we should try to create a life we enjoy. Comedian George Burns said: "You can either do what you love or love what you do. I don't
see there's any other choice."
We all have 24 hours in the day. We can't save time, only spend it wisely or foolishly. How do we use our time? What is the best use? What do we want out of life? Do we live in a way to make that possible? The shorter the list, the more likely it is to focus on things that matter. Know what we want and don't want. Do we do what we want to do or what others expect us to do? Who or what is most important in our life? Do we have a sense of meaning?
Part of avoiding misjudgments and improving our lives is having the right attitude toward life. Since people are different, there is no one-size-fits-all strategy. We each must figure out our own style. But there are guidelines that apply to us all.
We should act in a way that agrees with our nature, advantages and limitations and we should establish (and follow) some values.
How can we expect to succeed in a field we don't understand? We reduce the likelihood of making mistakes if we deal with things that agree with our nature, and things we understand and do well. We have a better chance solving problems and evaluating statements if they are within our area of competence. Confucius said: "To know that we know what we know, and that we do not know, what we do not know; that is true knowledge." We must determine our abilities and limitations. We need to know what we don't know or are not capable of knowing and avoid those areas. As Warren Buffett says:
You have to stick within what I call your circle of competence. You have to know what you understand and what you don't understand. It's not terribly important how big the circle is. But it's terribly important that you know where the perimeter is.
Charles Munger adds:
We'd rather deal with what we understand. Why should we want to play a competitive game in a field where we have no advantage - maybe a disadvantage - instead of playing in a field where we have a clear advantage?
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Each of you will have to figure out where your talents lie. And you'll have to use your advantages. But if you try to succeed in what you're worst at, you're going to have a very louse career. I can almost guarantee it. To do otherwise, you'd have to buy a winning lottery ticket or get very lucky somewhere else.
Ask: What is my nature? What motivates me? What is my tolerance for pain and risk? What has given me happiness and unhappiness in the past? What things and people am I comfortable with? What are my talents and skills? Do I know the difference between what I want and what I'm good at? Where do I have an edge over others? What are my limitations?
How can we do what is important if we don't have any values? If we don't stand for something, we fall for anything.
Be honest
Honesty is the first chapter of the book of wisdom.
- Thomas Jefferson (American President 1743-1826)
Act honorably. Listen to the words of Mark Twain: "Always do right. This will gratify some people and astonish the rest."
Tell the truth. Follow Lou Vincenti's rule (former Chairman ofWesco): "If you tell the truth you don't have to remember your lies."
Honesty pays. Charles Munger says: "More often we've made extra money out of morality. Ben Franklin was right for us. He didn't say honesty was the best morals, he said that it was the best policy."
Act with integrity and individuality. Heraclitus said: "The content of your character is your choice. Day by day, what you choose, what you think, and what you do is who you become. Your integrity is your destiny.. .it is the light that guides your way."
Every human being is unique so we have the right to be different. Why is integrity the real freedom? Because if we have nothing to hide we have nothing to fear.
Charles Munger says:
We think there should be a huge area between ... what you are willing to do and what you can do without a significant risk of suffering criminal penalty or causing losses. We believe you shouldn't go anywhere near that line. You ought to have an internal compass. So there should be all kinds of things you won't do even though they're perfectly legal. That's the way we try to operate.
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Stay out of anything questionable and deal with honorable people. Use the Warren Buffett "front-page test:" "Would I be willing to see my action immediately described by an informed and critical reporter on the front page of my local paper, there to be read by my spouse, children and friends?"
Trusting people is efficient. Charles Munger says: "Good character is very efficient. If you can trust people, your systems can be way simpler. There's enormous efficiency in good character and dis-efficiency in bad character."
Act as an exemplar
Wealth is a blessing to those who know how to use it, a curse to those who don't.
- Publius Terentius
Observe what signals you send out. Charles Munger tells us that some people have a duty to create the right appearance: ''A person who rises high in the Army or becomes a Supreme Court justice is expected to be an exemplar, so why shouldn't someone who rises high in a big corporation act as an exemplar?"
He continues:
You don't want your first grade teacher to be fornicating on the floor or drinking booze in the classroom. Similarly, I don't think you want your stock exchange to be all over the headlines because of its wretched excess. And I certainly don't think that you want to turn the country's major stock exchange into even more of a casino than it is already.
The military has the right model. Munger continues:
One of the things that's been horribly underdone is the concept where the military equivalent is conduct unbecoming an officer. When you rise to a certain point in a civilization, you ought to have a duty to behave as an exemplar. When is the last time you heard in a boardroom, 'Is this consistent with our duties as exemplars?' I mean the very word has an antique ring to it 'exemplar'. But that's exactly what is horribly lacking.
And everybody can see that that's what's required. The military concept of conduct unbecoming an officer is an important one. Your duty is to not cause resentment and envy and a lot of other things. You have a big duty as an exemplar."
How can we teach ethics? Charles Munger says:
I think the best single way to teach ethics is by example. And that means if you take in people who demonstrate in all their daily conduct an appropriate ethical framework, I think that has
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enormous influence on the people who watch it. Conversely, if your ethics slip, and if people are being rewarded for ethical slips, then I think your ethics cascade downward at a very, very rapid rate.
I think ethics are terribly important, but I think they're best taught indirectly by example. If
you just sort oflearn a few rules and remember 'em well enough to pass a test, my guess is it doesn't do all that much for people's ethics. But if you see people you admire behaving a certain way- particularly under stress - I think you're likely to remember and be affect
ed by that for a long, long time.
Treat people fairly
Warren Buffett says that: "The only way to be loved is to be lovable. You always get back more than you give away. If you don't give any you won't get any." Lao Tsu said: "Respond intelligently even to unintelligent treatment." Be nice to people and if they are not nice to you - don't be nasty - just avoid them in the future. Follow the advice of Charles Darwin - avoid controversies:
I rejoice that I have avoided controversies, and this I owe to Lyell, who many years ago, in reference to my geological works, strongly advised me never to get entangled in a controversy, as it rarely did any good and caused a miserable loss of time and temper. ..
All that I think is that you [letter to E. Haeckel) will excite anger, and that anger so completely blinds every one that your arguments would have no chance of influencing those who are already opposed to our views.
Don't take life too seriously
Life is too important to be taken seriously.
- Oscar Wilde
Have perspective. Remember Samuel Johnson's words: "Distance has the same effect on the mind as on the eye." When we fail we should view it as a learning expenence.
Have a positive attitude. Mayo Clinic researchers report that optimists report a higher level of physical and mental functioning than pessimists. Studies at the Mayo Clinic also show that optimists live longer than pessimists. Having a positive attitude also causes the body to produce pain-suppressing hormones, called endorphins, which work like morphine.
Warren Buffett says on the value of enthusiasm:
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I do think enthusiasm is a good quality to have generally. It has helped me... I like managers in our businesses that are enthusiastic. These people are enthusiastic about their work in the same way people can get enthusiastic about golf, and that translates into results. If you are in a job that you are not enthusiastic about, find something else. You're not doing yourself any favor, and you're not doing your employer any favor and you're going to make a change anyway at some point. We're here on earth only one time, unless Shirley MacLaine is right, so you ought to be doing something that you enjoy as you go along, and can be enthusiastic about.
He also says that we should do what we enjoy: "Do what turns you on. Do something that if you had all the money in the world, you'd still be doing it. You've got to have a reason to jump out of bed in the morning... Don't look for the money. Look for something you love, and if you're good, the money will come."
Have reasonable expectations
Blessed is he that expects nothing, for he shall never be disappointed.
- Benjamin Franklin
If we don't hope for much, reality often beats our expectations. If we always expect the best or have unreal expectations, we are often disappointed. We feel worse and make bad judgments.
Expect adversity. We encounter adversity in whatever we choose to do in life. Charles Munger gives his iron prescription for life:
Whenever you think that some situation or some person is ruining your life, it is actually you who are ruining your life... Feeling like a victim is a perfectly disastrous way to go through life. If you just take the attitude that however bad it is in any way, it's always your fault and you just fix it as best you can - the so-called "iron prescription" - I think that really works.
When bad things happen, ask: What else does this mean? See life's obstacles as temporary setbacks, not disasters. Mark Twain says: "[Our] race, in its poverty, has unquestionably one really effective weapon - laughter... Against the assault oflaughter nothing can stand."
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Live in the present
The superior man does not waste himself on what is distant, on what is absent. He stands in the here and now, in the real situation.
- Confucius
Often we tend to emphasize the destination so much that we miss the journey. Stay in the present and enjoy life today. Blaise Pascal wrote:
Let each of us examine his thoughts; he will find them wholly concerned with the past or the future. We almost never think of the present, and if we do think of it, it is only to see what light it throws on our plans for the future. The present is never our end. The past and the present are our means, the future alone our end. Thus we never actually live, but hope to live, and since we are always planning how to be happy, it is inevitable that we should never be so.
Be curious and open-minded. Always ask "why''
Curiosity is one of the permanent and certain characteristics of a vigorous mind.
Samuel Johnson
Thomas Henry Huxley said: "Sit down before facts like a child, and be prepared to give up every preconceived Notion, follow humbly wherever and to whatever abysses Nature leads, or you shall learn nothing." A child is curious and asks "why?" As grown-ups we seem to forget the "whys" and accept what others say. We should all be children again and see the world as if through the eyes of a curious child without preconceptions.
The End
I confess that I have been as blind as a mole, but it is better to learn wisdom late than never to learn it at all.
Sherlock Holmes (Arthur Conan Doyle, The Man with the Twisted Lip)
I hope this book is helpful in both understanding and improving your thinking. I also hope that you will continue in your search for wisdom. We are still going to make misjudgments (at least I still do them), but we can improve.
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- APPENDIX ONE -
CHARLES T. MUNGER HARVARD SCHOOL COMMENCEMENT SPEECH
jUNE 13, 1986
Prescriptions for Guaranteed Misery in Life
Now that Headmaster Berrisford has selected one of the oldest and longest-serving trustees to make a commencement speech, it behooves the speaker to address two questions in every mind:
Why was such a selection made? and,
How long is the speech going to last?
I will answer the first question from long experience alongside Berrisford. He is seeking enhanced reputation for our school in the manner of the man who proudly displays his horse which can count to seven. The man knows that counting to seven is not much of a mathematical feat but he expects approval because doing so is creditable, considering that the performer is a horse.
The second question, regarding length of speech, I am not going to answer in advance. It
would deprive your upturned faces oflively curiosity and obvious keen anticipation, which I prefer to retain, regardless of source.
But I will tell you how my consideration of speech length created the subject matter of the speech itself. I was puffed up when invited to speak. While not having significant public speaking experience, I do hold a black belt in chutzpah, and, I immediately considered Demosthenes and Cicero as role models and anticipated trying to earn a compliment like Cicero gave when asked which was his favorite among the orations of Demosthenes. Cicero replied: "The longest one."
However, fortunately for this audience, I also thought of Samuel Johnson's famous comment when he addressed Milton's poem, Paradise Lost, and correctly said: "No one ever wished it longer." And that made me consider which of all the twenty Harvard School graduation speeches I had heard that I wished longer. There was only one such speech, that given byJohnny Carson, specifying Carson's prescriptions for guaranteed misery in life. I therefore decided to repeat Carson's speech but in expanded form with some added prescriptions of my own.
After all, I am much older than Carson was when he spoke and have failed and been miserable more often and in more ways than was possible for a charming humorist speaking at younger age. I am plainly well-qualified to expand on Carson's theme.
What Carson said was that he couldn't tell the graduating class how to be happy, but he could tell them from personal experience how to guarantee misery. Carson's prescriptions for sure misery included:
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Ingesting chemicals in an effort to alter mood or perception;
Envy; and
Resentment.
I
can still recall Carson's absolute conviction as he told how he had tried these things on occasion after occasion and had become miserable every time.
It is easy to understand Carson's first prescription for misery - ingesting chemicals. I add
my voice. The four closest friends of my youth were highly intelligent, ethical, humorous types, favored in person and background. Two are long dead, with alcohol a contributing factor, and a third is a living alcoholic - if you call that living. While susceptibility varies, addiction can happen to any of us, through a subtle process where the bonds of degradation are too light to be felt until they are too strong to be broken. And I have yet to meet anyone, in over six decades of life, whose life was worsened by overfear and overavoidance of such a deceptive pathway to destruction.
Envy, of course, joins chemicals in winning some sort of quantity price for causing misery. It was wreaking havoc long before it got a bad press in the laws of Moses. If you wish to retain the contribution of envy to misery, I recommend that you never read any of the biographies of that good Christian, Samuel Johnson, because his life demonstrates in an enticing way the possibility and advantage of transcending envy.
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