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Charlie Munger on His Early Years: The Cautious Squirrel Who Saved His Way Into Investing

MarketDash Editorial Team
1 day ago
The legendary Berkshire Hathaway vice chairman once revealed he didn't leap boldly into investing—he squirreled away enough nuts first, waited until he was confident, and only then made the move from law to managing money.

Charlie Munger had a way of deflating his own legend. When most people picture the transition from attorney to legendary investor, they imagine bold moves and calculated risk-taking. Munger's version? He was basically a nervous squirrel hoarding acorns.

Speaking at the University of Michigan's Ross School of Business in 2017, the then-vice chairman of Berkshire Hathaway explained that he didn't charge into investing with guns blazing. He practiced law first because he had five kids to feed and law school seemed like the "least bad" option available. Not exactly a ringing endorsement of the legal profession.

When asked about his shift into investment management, Munger was refreshingly honest about his risk tolerance. He'd saved up several years of living expenses before even considering the move, and he didn't go all in until he felt confident it would actually work.

"I was not a courageous, venturesome, admirable man," Munger said. "I was a cautious little squirrel saving up more nuts than I really needed and not going very deep into my pile of nuts. It wasn't that courageous."

The Independence Factor

So why leave a stable law practice? Munger wanted something money can't directly buy: independence. He saw the ceiling in legal work and didn't anticipate the compensation explosion that would hit major law firms decades later.

"I hated sending other people invoices and needing money from richer people," Munger explained. "I thought it was undignified. I wanted my own money, not because I loved ease or social prestige, I wanted the independence."

After departing the legal world, Munger threw himself into investing through Wheeler, Munger & Company. But even running his own partnership had drawbacks. During the brutal 1973-1975 financial crisis, Munger himself weathered the storm fine. Watching his investors panic as their portfolios collapsed? That was the painful part. The experience pushed him toward managing exclusively his own capital.

By that point, he had accumulated $3 million or $4 million, which represented serious wealth in the 1970s. More importantly, he'd developed the skills to manage it effectively.

"I had $3 million or $4 million, which was a lot of money then, and I also knew how to handle that $3 million or $4 million very well by that time," Munger said. "I knew I didn't need to get fees and override some other investors. I knew everything was going to work."

It's a reminder that even investing legends didn't start out swinging for the fences. Munger built his foundation slowly, cautiously, and only made big moves when he had both the financial cushion and the expertise to back them up. The squirrel saved his nuts first.

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Charlie Munger on His Early Years: The Cautious Squirrel Who Saved His Way Into Investing

MarketDash Editorial Team
1 day ago
The legendary Berkshire Hathaway vice chairman once revealed he didn't leap boldly into investing—he squirreled away enough nuts first, waited until he was confident, and only then made the move from law to managing money.

Charlie Munger had a way of deflating his own legend. When most people picture the transition from attorney to legendary investor, they imagine bold moves and calculated risk-taking. Munger's version? He was basically a nervous squirrel hoarding acorns.

Speaking at the University of Michigan's Ross School of Business in 2017, the then-vice chairman of Berkshire Hathaway explained that he didn't charge into investing with guns blazing. He practiced law first because he had five kids to feed and law school seemed like the "least bad" option available. Not exactly a ringing endorsement of the legal profession.

When asked about his shift into investment management, Munger was refreshingly honest about his risk tolerance. He'd saved up several years of living expenses before even considering the move, and he didn't go all in until he felt confident it would actually work.

"I was not a courageous, venturesome, admirable man," Munger said. "I was a cautious little squirrel saving up more nuts than I really needed and not going very deep into my pile of nuts. It wasn't that courageous."

The Independence Factor

So why leave a stable law practice? Munger wanted something money can't directly buy: independence. He saw the ceiling in legal work and didn't anticipate the compensation explosion that would hit major law firms decades later.

"I hated sending other people invoices and needing money from richer people," Munger explained. "I thought it was undignified. I wanted my own money, not because I loved ease or social prestige, I wanted the independence."

After departing the legal world, Munger threw himself into investing through Wheeler, Munger & Company. But even running his own partnership had drawbacks. During the brutal 1973-1975 financial crisis, Munger himself weathered the storm fine. Watching his investors panic as their portfolios collapsed? That was the painful part. The experience pushed him toward managing exclusively his own capital.

By that point, he had accumulated $3 million or $4 million, which represented serious wealth in the 1970s. More importantly, he'd developed the skills to manage it effectively.

"I had $3 million or $4 million, which was a lot of money then, and I also knew how to handle that $3 million or $4 million very well by that time," Munger said. "I knew I didn't need to get fees and override some other investors. I knew everything was going to work."

It's a reminder that even investing legends didn't start out swinging for the fences. Munger built his foundation slowly, cautiously, and only made big moves when he had both the financial cushion and the expertise to back them up. The squirrel saved his nuts first.