Life and Money Lessons from Charlie Munger – Episode #469

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” On this Dentist Money™ Show, Matt and Jake talk about the late, great Charlie Munger, one of the most successful investors of all time, and how his perseverance, wit, and wisdom helped to make him a legend in the financial world.

 

Show Notes
Jake Elm’s Blog

 

 

 

 

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Podcast Transcript

Matt Mulcock
Jake, we got Jake Elm, we got Matt here. Jake, how are you?

Jake Elm
Hey, I’m doing great. I’m happy to be here. This is fun.

Matt Mulcock
We got back to back podcast today. Do you, do you, do you like that? Or do you feel so my take on the back to back podcast is you get warmed up usually, and I like kind of doing content back to back to back.

Jake Elm
I actually like that too. I like to structure most of my work week of I want to do kind of the same things all right in a row and you can get in a rhythm. We do this even with like client calls too, right? I actually feel like after I’ve done a few of them, I do get in a rhythm and it’s kind of easier to do rather than just doing more of a staccato spread out approach. So yeah, I like it. I’m bringing my vocabulary today, Matt, for this podcast.

Matt Mulcock
Time blocking.

Matt Mulcock
Oh, staccato. Good. Good word. All right. Uh, okay. So we would not be doing our job of being, uh, financial advisors, investment managers, uh, that do a lot of education and content. If we did not talk about Charlie Munger and we probably should have done this sooner. Uh, he passed away when he passed away within the last couple of weeks, I think.

Jake Elm
A couple of weeks ago, yeah, it was just, I think his birthday in my research I was doing, he was born on New Year’s Day in 1924. So it was just a couple of weeks before he turned 100. He was about to turn 100 years old here in 2024. So yeah, passed away a couple of weeks ago. We’ll get into it. But one of the greatest investors of the past couple of decades, a really important figure in kind of the whole finance and investment space.

Matt Mulcock
Yeah. So, yeah, so I guess we’ll just start there. So I get, first of all, before we go any further, we got to give a shout out to Jake. He does a weekly post, a weekly blog post, uh, on a sub stack. It’s called, uh, money talks, right? It’s it, you know, it’s, it’s awesome. Like you do a really good job. And so you wrote about Charlie a couple of weeks after he died, but this is last week before you wrote about him. And I was just like, Hey, we should do this. We should talk about.

Jake Elm
Yeah, mm-hmm. Yeah, pretty generic, yeah.

Matt Mulcock
You’ve already, you’ve already done the work to kind of break this down. Uh, we were talking about how, so Morgan Howesel, another one, we kind of fanboy over, he’s an amazing writer and investor and thinker and he’s written a couple of books, uh, I heard, I actually heard a podcast, him on a podcast today, this morning, and he said something that I think I agree with, it’s pretty wild statement, but I tend to agree with it. He said, Charlie Munger.

is probably the wisest person in the modern day. And I think that’s, I would actually say that’s probably true. Like one of the greatest thinkers.

Jake Elm
It seems. Yeah. It almost seems controversial nowadays. I know it’s popular where we kind of, what’s the right wording here? Crap on is probably think they’re not delicate. It’s like, Oh, well there are people like we kind of, you know, like there’s this thing where again, we’ll talk about Warren Buffett. We’ll talk, you know, kind of in this conversation as we’re talking about Charlie Munger, but like you said, he was 99. I mean, he’s been an old guy for a couple of decades now. And I feel like.

Matt Mulcock
Have a level of disrespect, yeah.

Jake Elm
it’s easy to pass off some of what he says. It’s just like, oh, you know, just some out of touch old person. But I think that’s cool that Morgan said that I, I don’t have a list of like, who are the wisest people, you know, in my mind, but that sounds, I mean, it sounds right. He has some pretty awesome quotes and teachings.

Matt Mulcock
Well, I think his superpower, and we’re going to get to this because Warren Buffett mentions this, I think his superpower is he takes complex, I don’t know if there’s been anyone better than Charlie Munger at being able to articulate things so simply. And so just like matter of fact, it’s such a simple concept and he says it and you’re like, oh my gosh, that was so…

Like that was so simple, but so profound. Like he, that’s his, for sure his superpower. And you actually have a quote in your, in your post about this, uh, where Warren Buffett says, so clearly Warren Buffett’s the more famous of the two, right?

Jake Elm
Yeah, I think we can give a quick introduction to the Charlie Munger. Yeah, like if you’re not super familiar with who that is, right. So this is yeah, just like quick, like this is the Wikipedia background on Charlie Munger, again, born in 1924 in Nebraska, in Omaha, kind of the same place that Warren Buffett was born and raised. They didn’t know each other as kids. They got they met each other later on in life. But they were born in the same place. He was just kind of like a classic. He went to Michigan for school, he enrolled the army, he was there for World War Two. He kind of then graduated there. He actually went to Harvard.

Matt Mulcock
Yeah, let’s actually let’s start there. Let’s break it down

Jake Elm
law school without a college degree. Like he never got a college degree. He just convinced them to let them into his law, their law program. It’s like, hey, can I get into Harvard Law? And he’s there just like, sure, I guess. Yeah, you can come in here. So he did that. And he was actually a lawyer early on in his career. He like dabbled in investing and stock trading and things like that. And then I think it’s around like 1960 ish is when he met up with Warren Buffett. They kind of knew each other from like acquaintances and things just growing up in the same town.

Matt Mulcock
I feel like that used to happen back in the day. Yeah. So crazy.

Jake Elm
And Warren Buffett was already doing this partnership, you know, his firm Berkshire Hathaway, right? That it came to be that they’re going to invest in stuff. And eventually Charlie went over and worked with Warren Buffett. They became like really good friends. Like they each call each other. We’ll get into this, but kind of their best friends really and partners, which is kind of a cool thing. And Berkshire Hathaway, their company really took off right from when they took over having 1960, he may have heard of it. It’s a huge, like almost a hundred billion dollar company. Yeah. It is funny. Warren Buffett is the more of like the

Matt Mulcock
You may have heard of it. May have heard of it.

Jake Elm
popular gold standard person that we talked about with investing. If I was just looking into their networks and things, Warren Buffett has a net worth of about 100 billion. Charlie Munger only about 2 billion. It’s funny to say only 2 billion, but there’s still some discrepancy. Warren Buffett is probably the more popular of the two kind of more from just like an average person standpoint, but we’ll get into it. Charlie Munger had a huge influence on Warren Buffett’s investment philosophy and things like that. So that’s quick to synopsis of who Charlie Munger was.

Matt Mulcock
random side note, I’m pretty sure at one point there was a third partner and he, uh, cause Morgan Halsell talks about this as well. There was a third partner who didn’t have the same level of discipline and risk management approach as they did and ended up getting himself into some hot water. They had to buy him out and all that. Anyway, so I wonder how he feels nowadays with, with their level of success.

Jake Elm
Mm. I know that’s crazy. It is a cool. Yeah. Can you, if you see Breaking Bad is kind of the same thing, right? Where he kind of gets bitter because you see a company go off and do something crazy. But yeah, that is, yeah, I can only imagine kind of to go and see their success yet. So Charlie Munger, he doesn’t have the, yeah, maybe not as popular as Warren Buffett is, but Warren Buffett kind of has a, some pretty high praise for who Charlie Munger is. It’s like, he just really touts Munger as a really awesome person. I was just looking here. I had this in my article.

Matt Mulcock
Yeah.

Jake Elm
One of the biggest influences that Warren Buffett says that Charlie Munger had on him is just a slight change in investment philosophy. So if you know about Warren Buffett, he is a disciple or a student of Benjamin Graham, who kind of wrote popular investment books. It really is like Matt releasing this seems like buying value companies, buying companies at a discount, right? Is essentially the main philosophy there of like if you buy cheap companies compared to the earnings, they’re going to tend to outperform over time. Right.

Matt Mulcock
Yeah, I think… Yeah.

Matt Mulcock
Yeah. And by the way, this is not something we talk about a lot, but this is a philosophy we follow, right? With the fund managers that we have kind of hitched our wagon to and that we utilize, we believe in this philosophy. Now, since Benjamin Graham, this has obviously grown into fund company and different books and different strategies around this. But yeah, Benjamin Graham was kind of the godfather of value investing. And then Warren Buffett’s famously, like his kind of a protege who ended up

Jake Elm
Mm-hmm.

Matt Mulcock
who ended up being even more famous, obviously.

Jake Elm
So Warren Buffett has talked about this before he brought on Charlie Munger. He would really just again look at spreadsheets, look at companies. So it’s like overall stock price was like cheaper than what they’re earning. So it’s like this is kind of their under price for what they’re doing. And Charlie Munger actually switched up their philosophy a little bit when he came in, he convinced Warren Buffett. There’s this quote here that Warren Buffett says. He said, Charlie convinced me to change our strategy from buying a fair company at a wonderful price to a wonderful company at a fair price. Essentially, meaning he’s just like

Matt Mulcock
Love that.

Jake Elm
Let’s stop looking at price so much. Let’s look more at these companies and what we believe in. Some of their famous investments like Costco, Charlie Munger is a huge fan of Costco, like Seas Candy and some of these other companies, again, they have a ton of money in Apple too kind of from early on. They really just said, okay, let’s forget about this stock price of what it is. Let’s just see, is this company awesome or something we believe in? And let’s just buy it if we think it’s awesome. And Warren Buffett says he’s like, he actually has a quote that said,

Matt Mulcock
Coca-Cola.

Jake Elm
If we wouldn’t have changed that philosophy, I’d probably be a lot poorer now than I am, you know, kind of the success we had, which yeah, isn’t interesting. So

Matt Mulcock
Isn’t that wild? Again, simple in concept, probably not exactly easy to implement, but somehow they’ve been able to, to do it and build an empire based off of that approach.

Jake Elm
Yeah.

Matt Mulcock
So one thing I was going to say, uh, and I was trying to find it in here, but to circle back earlier of just again, Charlie Munger’s super power, uh, Warren Buffett mentioned something about the brilliance of Charlie Munger and he says what would take me a full like page or whatever he says, like a full page to, to explain he does it in like a sentence. He was just so good. And we’re going to go through some of these quotes. Uh, please. Yeah.

Jake Elm
I have a funny one. Can I share a quick anecdote about that? I was reading this about him. Someone said in 2000, so again, Berkshire Hathaway really, if you’re like in the investment space, they have kind of been the gold standard. They have a meeting, a shareholders meeting every year that people kind of, they just Charlie mongers, like they spout their wisdom, my type of thing. So in 2000, this is, you know, 23 years ago now, um, there was speculation, again, the.com bubble, internet stocks and things like that. And someone said,

Matt Mulcock
It’s kind of become like legendary.

Jake Elm
that Warren Buffett had like a 550 word answer for like internet stocks and how that’s going to affect the economy and things. And then someone turned to Charlie and they said, you know, what do you think about this? And he just had one sentence that said, if you mix raisins with turds, there are still turds. It was like, all he, this kind of goes to that point of he was kind of this person of curmudgeonly one sentence. Like he just like, I’m just going to cut straight to the point of what I think, which I think is awesome.

Matt Mulcock
Yeah. I love that about both of them, but especially about Charlie, because he was, again, he was so to the point and Warren says it himself, like it takes him 500 words, Charlie says it in a sentence. He just like, didn’t care. He’s just like, this is what I think. And this even fast forwarding to even a little bit more recent, by the way, it blows me away that you just said 23 years ago and you said 2000, that is like mind blowing to me, uh, but even more recently we were talking about this, right?

Jake Elm
2000 and the reality check. Yeah.

Matt Mulcock
where during COVID, right, if we all remember that, not that long ago, where the meme stocks and crypto and everything was going just out of control. And people were putting a lot of pressure on like traditional advice, like this whole idea of, oh, you know, a diversified portfolio of stocks and buying value and that whole kind of mindset was getting…

Negative attention will say people were kind of coming at it and they were using Warren Buffett and Charlie Munger kind of as the poster child for that like old person advice. Very outspoken.

Jake Elm
Because they were very outspoken against cryptocurrency and they still are. I mean, you know, Charlie Munger was and you know, Warren Buffett still is very outspoken of like, I don’t think there’s any underlying value in this, right? This is essentially glorified gambling, right? Kind of with this kind of their stance on it.

Matt Mulcock
Yeah. And that was probably the first time that I remember there’s probably been other times, but that was the first time that like a collective group that was pretty loud was coming out against them, kind of saying like, Oh, we’ve passed them by. Like they’re out of touch.

Jake Elm
They’re out of touch essentially. Like, yes, like, yeah, they’re a little out of touch. You know, they have fun staying poor, you know, type of things. But it was more of like, yes, what they did worked for them back in the day. But that’s kind of a new era type of thing now. They don’t quite understand. I know. Yeah.

Matt Mulcock
Yeah, yep.

Matt Mulcock
Yeah. And, oh, how quickly did we learn that Warren Buffett and Charlie Munger were spot on with this time, these timeless lessons, uh, and that’s really what it is. Right. I mean, we’re going to go through this, but there, there’s some, in fact, let’s just go through this because there’s some quotes in here that really speak to that around this Warren Buffett talking about, you know, people think we have like this magic bullet or we’re like, we’re all like, what are the mysteries behind what we’re doing and they underestimate.

Really how simple the concept is that they approached all of life with. So.

Jake Elm
Yeah, let’s get into some of these quotes. I did want to bring up first before we get into these. This is another quote, but this almost doesn’t have anything to do with investing. It’s more kind of business. Something that struck me as I was writing this and looking at Charlie Munger, he has this one thing when speaking of him and Warren Buffett, it’s their partnership. Again, they’ve grown a huge company. He said at one time, he’s like, it’s almost hilarious how much fun it’s been working with Warren Buffett, which I don’t know. I just really, that struck me. It’s so simple, but it’s just like,

Matt Mulcock
I knew you were going to point that out. It’s so good.

Jake Elm
These guys really enjoyed working together and they had fun doing it. And it’s just almost as seems at odds with the other kind of bigger tech companies cutthroat type of things you hear about nowadays, but they’re like, we just had a really fun time doing this and we were in lockstep and we enjoyed it. And I kind of, it just seems like something we all strive for right in our professional interaction. Just how they had a lot of fun doing this.

Matt Mulcock
Totally. Well, he follows up with that or you follow up with that with another quote, speaking of Buffett talking about Munger again, where he says, Charlie has given me the ultimate gift that a person can give to somebody else. I’ve lived a better life because of Charlie. And like, how cool is that? That there are two billionaires, right? And maybe someone’s out there saying, well, like, yeah, you can focus on that because you’re a billionaire, but I think it’s cool that that’s what they’re emphasizing, they’re like their relationship, their friendship. Like when he’s talking with the

Jake Elm
Pretty great.

Matt Mulcock
best gift you can give me is you help you, the impact of helping me live a better life. Like that’s what this is about. And, and by the way, sometimes actually, this is just kind of hit me. Sometimes I really hate the, uh, the advice when people talk about like, for example, people will say, Oh, Charlie Munger or Warren Buffett and Charlie Munger sold out of X, Y, or Z stock. You should be scared. Like

When they try to liken our investment strategy to Warren Buffett, like we are. And I always tell people we are not, you are not Warren Buffett. I am not Warren Buffett or Charlie Munger. We’re not billionaires managing $800 billion. Yes.

Jake Elm
Good point. You’re not managing a multi-billion dollar portfolio. Yes, where you are trading and doing different things and maybe you can hold more cash. And so yeah, I think that’s a great point, Matt. And we often say like, well, what are the billionaires doing with their money? And it’s like, you’re not a billionaire. So you actually, the strategy for them is actually quite different than the average person.

Matt Mulcock
Yes. You’re not a billionaire. Yes. However, this is kind of opposite of that where they’re both just human beings. And at the end of the day, what is this all about? It’s having an impact, building relationships, having friendships, like that’s far more important than any of this. And I think they, those two quotes speak exactly to that.

Jake Elm
Which is what I think we want to do. I actually think we’re always reading, you know, kind of trying to stay up on top of things. I actually like reading quotes and things from, I guess, the older generation. We want to call them the older people because again, they’ve just passed through this. It’s kind of like at the end of your life, what do you think about most? And again, these guys have said, what I think about most is how much fun we had and what an impact he had on me, right? More than anything is what they think about. So pretty cool.

Matt Mulcock
Yeah, sorry. I think that’s worth, I think that’s worth hitting again. He says, it’s almost hilarious talking about Charlie. It’s almost hilarious. It’s been so much fun working together. Like that’s like, I think all of us want to look back on our life and our working careers and think that’s what you, that’s the mindset you want to have. So, so cool. Uh, okay. Let’s move, let’s move forward. I think we just go through this.

Jake Elm
Yeah. Goals. Yeah, cool. I think it’s cool. Do you just want to go through some of these and get our reactions to some of these quotes?

Matt Mulcock
I think there’s so many cool and amazing quotes here. Yeah, I think we just go through this.

Jake Elm
Can you start with one? I mean, you start, then I’ll go kind of the next one. If you have one.

Matt Mulcock
Yeah, let’s see. Again, there’s so many good here. Okay, so…

Well, you start, so you’re, you’re setting up kind of your article with one of the quotes. I think this is really, I love this is Charlie Munger says, I believe in the discipline of mastering the best that other people have figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart. There’s so many layers to that. First of all, just the humility of a billionaire to say that. Um, but I also think him acknowledging that you’re not like

Jake Elm
I love it. Yeah.

Matt Mulcock
Stop trying to reinvent the wheel. And there’s a lot of lessons here from an investment standpoint.

Jake Elm
Buffett has a quote, I actually think that’s separate from this, where he says, I don’t know if I’ve ever had an original idea is what he says one time, which I think is extremely humble. And I think, you know, I write these articles and we try and publish content and a lot of it. I’m just trying to like read about what smarter people than me have said and try and spit it out in my own way or trying to say in a simplified way. And I think, yeah, try not to reinvent the wheel. This is something that people with wealth building and investing where sometimes we think, think we need like a fancy strategy or something, this, or we got to be doing something that no one else is doing.

Oftentimes that’s not the case. Again, these guys have built a billion dollar empire on sound financial principles.

Matt Mulcock
Yeah, Jake, I can say with full confidence, zero doubt in my mind that I’ve never had an original thought in my mind ever. Yeah.

Jake Elm
Yeah, it’s kind of funny to think about that like do I have I ever had an original thought I don’t know

Matt Mulcock
No, no, I, I really, I genuinely don’t think I have like, and I, and I, that’s why I kind of love this quote. It’s like, that’s not the point, right? It’s like the discipline of mastering the best of what other people have figured out. Like, you know, you think about 2000 years ago of all the, the knowledge and, and breakthroughs that we had from, you know, from ancient philosophers that their, their knowledge and things that they’ve shared is, is just as true today.

Quotes from anything with stoicism or Buddhism or anything like that. It’s just this, again, this ancient wisdom. So yeah, I can guarantee you’ve never had an original thought in my life. Uh, but that’s why I like this is it doesn’t, that’s not the point, right? The point is using that to your advantage. Uh, and, and again, kind of mastering what other people have already figured out. I love it.

Jake Elm
I have another anecdote I wanted to share that kind of goes with this. Again, these older guys kind of being humble about their, you know, billion dollar empire that they built. If you’ve watched how I built this, you know, that podcast, which I think is very good, it still keeps going where they just interview entrepreneurs and very successful people. And one of the questions they have in there, right, they ask almost everyone is, what do you attribute your success to? Is it success too? Is it luck? Is it hard work? Is it something else?

Matt Mulcock
Great.

Jake Elm
I haven’t watched, listened to all the episodes, but on the ones I listened to, I think most of the founders are kind of like, oh, you know, it’s of course hard work, but a lot of it was kind of being at the right place at the right time. Charlie Munger, this is from Jason Zweig. He’s another again, investment writer. He wrote about the Wall Street Journal. He wrote about like a little like obituary to Charlie Munger and he has a story in here where he actually talks about again in 1931. So

Matt Mulcock
Oh great, Wall Street Journal, right?

Jake Elm
Charlie Munger is seven years old. He was on a swing set with another girl. They were just swinging and this dog comes running out and like starts attacking them. Like kind of this rogue dog just comes out starts attacking these kids. And it actually didn’t go for him. It bit this girl. Unfortunately, this, you know, poor girl got bit. She actually contracted rabies after that and she died. She actually passed away to get serious here. Sorry, we’re getting serious. But he actually talks about this in this piece. He’s like, you know, when someone asks him like, how much of your success do you do?

Matt Mulcock
Oh, whoa! Gosh!

Jake Elm
attribute to brilliance or hard work. And he says, he’s like, I think that whole hard work thing is nonsense. He’s like, if that damn dog wasn’t three inches from me all my life, I’ve wondered why did it bite her instead of me. It was sheer luck that I lived and she survived. And then he just says the records of people and companies that are outliers are always a mix of reasonable amount of intelligence, hard work and a lot of luck. So anyway, maybe a serious story there. But yeah, it’s true. It’s just like luck. He’s like, I could have been bit that day and we wouldn’t.

Matt Mulcock
Wow. No, yeah.

Jake Elm
not even be doing this podcast about him today type of thing.

Matt Mulcock
Yeah. And I think that you’ll see examples of this as we go through this, if you haven’t already, and I think the thing I admire the most about both of those Warren Buffett and Charlie Munger more than anything, it’s not the money, it’s not the success, it’s their level of humility. And that, like, even in that quote, even in that story or the quote that I just read, it comes through so genuinely, like they’re both so humble and they’ve been successful, but they’ve got no problem being like, no, a lot of this is luck. Like a lot of people work hard.

Jake Elm
Mm-hmm.

Matt Mulcock
we’re just taking what other people have already learned. Like that kind of mindset and it’s so genuine. I admire that so much. I think having humility through success is one of the most admirable qualities in a human.

Jake Elm
And I think they talk about it probably helps you have more success too, right? There’s a quote in here where Charlie says, if you think your IQ is 160, but it’s 150, you’re a disaster. It’s much better to have an IQ of 130 and think it’s 120. We’re essentially, he promotes like knowing the limits of what you know, and kind of your area of expertise is actually if we want to bring this back to building wealth and investing, it’s really important to be like, here’s what I know, here’s what I don’t know. Stay humble enough to be like, I don’t know everything and I’m not going to, you know, you know,

Matt Mulcock
Yeah.

Jake Elm
kind of put my foot in the wrong place type of thing. So

Matt Mulcock
I think that, that quote also speaks a lot to what we’ve talked a lot about in the past around, uh, kind of comparison, right. And the issues of lifestyle creep and comparing yourself to others. And, and I think what that speaks to, and I hear that as everything’s relative, right. And if you’re, you know, and also kind of this idea of like, are you playing the wealth game or you playing the status game? I think what he’s talking about there, what to start that quote, there’s one of my favorite quotes of all time from him. When you talk about that, that a happy life.

And he says the first, I think about this literally all the time, like this quote is in my head circling all the time. He says the first rule of a happy life is low expectations. If you have unrealistic expectations, you’re going to be miserable your whole life. You want to have reasonable expectations and take life’s results, good and bad as they happen with a certain amount of stoicism that to me is maybe the pinnacle of Charlie Munger’s quotes. Again, so simple, but

I’m thinking about that all the time as far as like your happiness is always just in relationship to the expectations you have for your life.

Jake Elm
But again, we know this, our expectations have gone crazy. Lifestyle creep, but social media is really, we’re not comparing ourselves to our neighbors anymore. We are comparing ourselves to the other hundreds of thousands of people that are on social media writing things there. This again, we’re just spouting off quotes here. Another one, like a really popular quote from Charlie Munger is, he says, the world is not driven by greed, it’s driven by envy, which kind of goes to this point where it’s, it’s not as much people being greedy, it’s just, I want to keep up with the Joneses and maybe be a little more rich than my neighbor is type of thing.

Matt Mulcock
Yep, yep. And I think, I heard another quote, just speaking of Envy, I don’t know who said this, but it was like, Envy of the seven deadly sins, Envy’s the only one that’s no fun. It’s like the least fun of all of them. Was it from him?

Jake Elm
You know? Yeah! Here we go. He has a scope here. I’ll just say a scope. Yeah. He says the idea of caring that someone is making money. The idea of caring that someone is making money faster than you are is one of the deadly sins. Envy is a really stupid sin because it’s the only one you can ever possibly have any fun at. There’s a lot of pain, no fun. Why would you want to get on that trolley? There you go. Yeah. It makes sense. Yeah.

Matt Mulcock
Oh, there you go. There you go. Yeah. So I heard some version of that probably recycled from like from his original quote, but it is true that envy is like the only one. It’s not any fun of the seven deadly sins. If you think about the other ones, they all have some level of fun, but envy. Yeah.

Jake Elm
Yeah, you get some pleasure out of it or something. Envy is just like your, you know, pickle juice every time, you know, you’re kind of getting jealous of somebody.

Matt Mulcock
Yeah, that’s so true. It’s so true. Uh, so again, we’re hopefully this is helpful. I, I love quotes and I think based on your article, a lot of it is just like the quotes and some, some impactful things that they said that some ideas, but, uh, shifting gears a little bit, I think, uh, where was the one? Oh, I love this one really simple, but he says I’ve never had any luck changing anyone’s mind in my whole life. There’s a lot of.

uh, wisdom in that, I think that pertains to our work, right. Any, any thoughts on that?

Jake Elm
Yeah, it hits really home with us. It hits home with us in our line of work. Again, we are financial advisors. The core of that is we try to give advice, right? Try and help people make smart financial decisions. And yeah, I have come across just plenty of times where we’re trying to talk to people and communicate and listen to them. And yeah, there are a lot of times where I was like, yeah, there’s no level of like research or data or anything is really going to change someone’s mind in the end. Really hard to do. I don’t know. This is a…

I guess mystery of life really hard to change people’s minds.

Matt Mulcock
Yeah, I think part of it is most, if not all decisions are based on emotion. I think we make emotional decisions and then we justify it with facts later. Uh, I think that’s kind of what most of us do, but yeah, this one resonates with me just because to your point, we’re always trying to the nature of our job is we’re giving advice or bringing education or trying to help people think about things in a certain way. And because we follow really at the foundational level, we follow a lot of what Charlie Munger and Warren Buffett.

Talk about, which is just basic financial principles that are not sexy. And what we’re constantly battling is people that want people listening to advice, quote unquote advice, that they want to be true, right? It’s just people that aren’t genuinely trying to be curious and actually like learn. A lot of times it’s just people that are seeking out like so I’ll give you an example.

People want it to be true that you can make a lot of money and pay no taxes. And so they’re going to seek out and confirm that advice. It helps confirm that. Right. And so we’re battling that all the time where we’re trying to speak the truth and say, Hey, that’s not possible. That’s not real life. But again, to Charlie Munger’s point,

Jake Elm
Yeah. Advice that helps them do that. It’s not sexy or it’s not, you know, you know, speaking to the inner, like I want this to happen faster and sooner and easier.

Matt Mulcock
Exactly. But again, to his point, and we probably fit in the same camp is like, we’ve never had any luck changing anyone’s mind because they’re, they emotionally so much want that to be true or want something to be true that we’re trying to tell them with facts. Like, Hey, that’s not, that’s not how this works.

Jake Elm
We battle with this all the time. I’m glad you brought this up. We battle with this all the time and talking to, again, the people we work with, the dentists we work with of how much like of our offering or our advice should be like what they want versus what they need. Right. We kind of always, cause sometimes those can be very different things. Like my, one of my biggest examples is we do like to go over budgets with our clients, right? Or a cashflow. Just like, how much are you spending? How much are you saving? What’s going towards taxes? What’s going towards debt? Things like that.

And that could get, you know, year after year, maybe monotonous or kind of boring or you could be like, Oh, this isn’t super exciting. It’s definitely way less exciting than some crazy investment strategy or some tax saving strategy that you heard on TikTok. But really that budget that we do every year is going to make such a big difference in the kind of your future trajectory of your finances, but it’s hard, it is kind of, it is kind of boring. It’s not super exciting where, yeah, it’s like, and so to try and get people to buy into that is a hard.

Concepts is to buy into the boring, consistent thing is tough.

Matt Mulcock
I mean, yeah, we liken things all the time to the fitness space because I think, um, well, Ryan and I do all the time. Cause we, we love it. And also, yes. Okay. All right. Yeah.

Jake Elm
I need to tell you, I am doing P90X. I just started doing this. Here’s the reason we’re taking a big tangent here. I don’t care. The other day it was a classic. I just needed to get the kids out of the house. My wife needed a little bit of a break. I went to my parents’ house and took them there. I’m like, well, while I’m here, they’re gonna watch the kids for a little bit. I’m just gonna work out, okay? I’m just gonna go and take use of my time, work out a little bit. They have a little gym in their basement. Anyway, I go down to work out and I was shocked at how weak I was. Like…

Matt Mulcock
I love it. Let’s do it. Yeah, get some pushups in, yeah.

Jake Elm
Truly like I was like, oh my goodness is like a huge wake up call of again It was crazier with kids and things. I hadn’t been working out as much as I wanted to I’m like I need to get back into this Anyway, I did I decided to do P90x someone telling me what to do every day. It’s giving me a routine Anyway, I’m like three weeks in it’s been fun so far It’s been great. Yeah, I really Again, this is not breaking news working out. It’s good for you. Not even just physically but mentally and everything, you know, so it’s been

Matt Mulcock
and, liking it?

Jake Elm
It’s been fun. Anyway, I just wanted to tell you that. Hope you’d be proud of me.

Matt Mulcock
Well, well, I am very proud of you. I’ve done P90X before. It is brutal. Uh, I, and now I’m going to have to extend this tangent. I’m sorry, but years ago, probably 10 years ago, I did P90X. We live in, we, my wife and I were living in a little shoe box condo, 500 square feet, and I’m an early morning guy. Love working out in the morning. If I don’t do it in the morning, it’s not going to happen. And, uh, so convince her to do P90X with me. Like, Hey, I’m going to get you up.

Jake Elm
Let’s do it.

Matt Mulcock
We’re going to get up at five in the morning and we’re going to do P90X first time ever. We’ve never done it. So wake her up five in the morning. We start the workout. We’re probably 10, 15 minutes in. She leaves the room. She goes and she throws up from the workout. I think it’s probably from waking up early and then she goes back to bed and she never did it again. She did one day of P90X. So back from, we’re going to bring this full circle.

Jake Elm
No way. Yeah.

Matt Mulcock
So anyway, I am proud of you. P90X is actually a great workout, very brutal. But to your point of saying, people don’t want the truth a lot of times because the truth a lot of times is so boring. It’s not sexy. It’s, it’s really simple. But again, to this whole point of like working out the concept of getting in shape or getting results from working out, the concept is so simple. I could probably give you three to five.

Jake Elm
Thank you. Or simple, yeah it’s not sexy, yeah.

Matt Mulcock
points that you need to start or, you know, inputs that you need to start doing to get in shape or get stronger, whatever your fitness goal is. And it’s really basic. In fact, I guarantee you, most people out there could probably list the things to do it. They, you, it’s not about knowledge, right? It’s that you’d rather have all the things, those things provide, like the outcome of those things in a pill. And so again, it’s the whole idea of like, people want to go seek out the pill as opposed to take the time to just focus on what actually like what actually has to happen to achieve that outcome. So.

Jake Elm
I’m going to bring this around again. Charlie Munger has a quote right to this where he says, It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid instead of trying to be very intelligent. Our ideas are so simple that people keep asking us for mysteries when all we have are the most elementary ideas.

Matt Mulcock
Again, humility, but also facts right there. There’s, uh, to bring another quote from the, another quote genius, in my opinion, someone who can take complex things and make it so simple. James clear, he wrote the book atomic habits. He’s amazing. Uh, this is something I quote ad nauseam all the time and it’s always rattling in my head, but to sum up what you just said there from Charlie Munger, he has a quote that says 90% of success is doing the simple and obvious for an uncommon amount of time.

Jake Elm
Mm-hmm.

Matt Mulcock
And it’s kind of what Charlie just said, like the sit that’s investing.

Jake Elm
That’s investing right there. That’s investing in a nutshell, right? Where it is the long game. It is, again, he has another quote here. The big money is not in the buying or the selling, but in the waiting is kind of his thing there where I think James Clear were just spouting off quotes here. He has another one similar to that where he says, the biggest threat to success is actually just boredom. He says most people just get bored of the routine and the consistency and they kind of switch it up and don’t stay consistent anyway.

Matt Mulcock
Thanks for watching! It’s actually really funny. Uh, this is a tangent, but it’s actually very on point. So I had a call last night. I had a call last night at consult. So, uh, people, you know, Dennis, we talked to probably between 350, 400 Dennis a year, uh, who call in or who set up calls with us. Uh, and so we knew we had it. We had a conversation. He’s with working with another advisor. I’m not going to give too many details here, but working with another advisor and everything he was explaining. Was.

Jake Elm
We love to end it here.

Matt Mulcock
Like pretty solid, like there was nothing bad. The advisor he’s working with seems really great and seems like they were doing a really good job. And there was a few things like that. He mentioned as far as like communication, like amount of communication, they do an annual meeting as opposed to what we do, which is, you know, more frequently meeting, but nothing that he was saying was bad. Right. And so, and I told him as much, I was like, look, nothing you’re saying is like, I’m not going to sit here and disparage this person.

To get you to come on board with us. Like, I’m gonna tell you honestly, it sounds like they’re doing a pretty good job. And his response was something along, it was really interesting, but he was like, well, yeah, I mean, I think things are great and maybe this is just life. I don’t know, but I’m just wondering if there’s maybe something else out there. I’m just kind of bored. Like, is there something else that you could provide for me a different strategy?

Jake Elm
Hehehe

Matt Mulcock
Or so, and he, he even caught himself through his sentence where he was like, I know there’s probably nothing. And, and I was very honest. I just said, it’s kind of what you’re, you’re saying is he’s just bored. He’s been with this group for two or three or four years. And he says things are just moving along well and we’re making progress, but nothing’s sexy. And I was like, I told him straight up. I said, that’s what this is. Like there’s nothing fancy about this. They’re doing their job but he was stuck in this boredom train of like, I gotta go do something else, cause I’m bored.

Jake Elm
I sympathize with that though. I’m glad that he like, he’s like, he gave you his honest feelings then he tried to take it back because sometimes it’s not, he’s like, I want to be socially acceptable here and say the right thing. But I honestly think, yes, so we just get bored in life sometimes. I think this happens in particular with dentists because a lot of the dentists we work with are very smart, they’re very ambitious, they’re very, very entrepreneurial. And a lot of their life is scripted out for them, right? It’s like, I go get my undergrad, I go to post-grad.

Matt Mulcock
Yeah.

Jake Elm
I get my degree, I become an associate, I buy my practice, I work on getting that practice up and running. And then I feel like a lot of dentists too, as they get later on in their career, they’ve like, they’ve made their practice really efficient, they’re maximizing things there, and they kind of look back and say, well, what’s next? You know, like, do I expand? Do I build that new building? What am I, what’s the next step I need to take? They get a little bit antsy, because it was like things are moving almost too smoothly, right? Where maybe again, I’m not saying like that you shouldn’t expand or do that, like that’s great.

Matt Mulcock
Yeah.

Jake Elm
But in the investment side of things, when we’re talking about like having a good investment strategy, a lot of it is pretty, it’s just, it’s all about consistency, about discipline, right? There’s a marathon, not a sprint. And so I like to say like, be exciting with other things in your life, investing done right is, is somewhat boring, right? It’s really just consistent. Yeah, yeah.

Matt Mulcock
It should be boring. Yeah. And, and I think you’re right, Jake. I really appreciated his honesty and he was very honest. He was very honest and very, very much like this is just how I’m feeling. And I really appreciated that. And in no way do we ever shame anybody for those feelings. We feel the same thing sometimes. Like we, this is the hard part. This is the hard part. But I guess my response to that or anyone that’s feeling those same feelings is like, okay, acknowledge those feelings and, and break the trend.

Jake Elm
This is the hard part, it’s the behavior is the hard part. Yeah.

Matt Mulcock
but not with something that has a long-term consequence like on your retirement. Meaning find excitement elsewhere in your life. If you’re just take up P90X, go on a vacation, buy something that’s not going to put you in a massive, like, you know, don’t go buy a Lamborghini unless you can afford it, but like change it up, change it up. Just don’t change it up with something that requires time and discipline like your investment portfolio. Like don’t.

Jake Elm
Take up P90X. Ha ha. Yeah.

Matt Mulcock
Don’t try to repress the feelings of being bored. Okay. Like you’re bored. I get bored all the time, but find something else to change up as opposed to bounce from strategy to strategy or go find another advisor because you’re just bored. Cause you’re going to do the same thing. And I told him this too. I said, Hey, guess what? You’re going to hire us. You can hire us. Awesome. But guess what? In a few years, if this is the trend you’re going to follow, you’re going to be doing the same thing down the road. So find ways to break the trend elsewhere.

Jake Elm
Yeah, in a few years you’re going to feel the same thing. Which is probably, yeah, which is funny because that’s probably why you need an advisor though, someone to talk you off the ledge or just a sounding board, you know, like, hey, don’t make a big mistake here.

Matt Mulcock
Yeah. So, so he’s using me to tell him to stay with his advisor basically. Cause that’s kind of what I told him. Yeah. I was like, just stay. It’s okay. We’re doing a good job. Uh, okay. What were we kind of getting close to wrapping this up, but there’s several other quotes here, uh, any others that stand out to you.

Jake Elm
There we go. It happens a lot of times. We’re happy to do it. Yeah. I went through a lot that I really like. I have this one kind of at the beginning, which isn’t necessarily towards investing, but it’s more just like Charlie Munger has three basic rules for career success that I think is pretty interesting. Where he says meeting all three is kind of impossible, but you should try anyway. Where he says number one, don’t sell anything, you wouldn’t buy yourself. Number two, don’t work for anyone you don’t respect and admire. And number three, work only with people you enjoy. And that’s it.

Matt Mulcock
Love this. Yeah, yep.  You think that’s impossible?

Jake Elm
Well he says that, I don’t know, I-

Matt Mulcock
Yeah, no, I’m just curious. Like, do you, when you hear that, those three things.

Jake Elm
I don’t think it’s impossible. I do think it’s rare. But do you think it’s rare?

Matt Mulcock
I think it’s rare. Very rare. Yeah.

Jake Elm
Um, I think most people try to find careers where they, they like, they’re selling something that they would buy too. I think most people kind of try and navigate into something that they would do. You know, they would buy themselves. I think that’s pretty common. I think it’s probably harder to work for someone you admire and work with people you enjoy type of thing. Where does, cause you don’t have a lot of control over that as much where it’s like, I like this job, I like this career, I like the money it makes me. I don’t really like my coworkers, but I’m just going to stay here because of the other things, right.

Matt Mulcock
Yeah. I think if you’re saying exclusively, like he doesn’t say this, but if it’s like work exclusively, I guess he says the word only work only with people you enjoy. So that’s probably the, yeah, that’s the, he is saying exclusively. I think that’s where it probably gets tough is number three. Uh, the more than anything, uh, he says like he’s been incredibly fortunate in my life with Warren, I had all three. Uh, I’m not saying perfect, but like I’m pretty, we’re

Jake Elm
Yeah.

Matt Mulcock
I feel like we’re pretty dang close. Like if I’m just thinking in our situation, I am incredibly proud of the team we have and what we’re quote unquote selling. And I can say with a total straight face, we’re not selling anything. I wouldn’t buy myself. And I think the people we have here, like not only the people we work with, but if we get to work for being our clients, like I feel pretty grateful and fortunate, kind of like Charlie said.

Jake Elm
Yeah, I did too.

Matt Mulcock
We’re pretty, in my opinion, we’re pretty dang close, or I’m pretty dang close in this situation.

Jake Elm
Yeah, but why I like this too of like career advice is he doesn’t mention anywhere in here, like find a job that’ll pay the most money, right? That’s not part of his career. Assess your like, find it. You know, like he really just says if you can find something like sell something that you would buy yourself, if you can work with the right people, like kind of those three ingredients should work up to some sort of success, right? Is what he’s trying to say here is if you can do those things, the money should follow after if you really do if you really do enjoy working and doing what you’re doing. So I think it’s a good advice there.

Matt Mulcock
Yeah, totally agree. And maybe people are sitting here thinking like, well, yeah, it’s easy. You’re a billionaire, of course. But like there is some, so yes, there is some, we got to acknowledge that, you know, it’s like, yes, he’s lived a very, he lived a very good life. And it’s one of those things where people that say money doesn’t matter are always people that have money. So we do need to acknowledge that.

Jake Elm
Yeah, this guy’s lived a very good life. Yeah, I just view this though here is like he’s not saying don’t shoot for money. The way I interpret this is he’s saying if you do these three things, the money will come. Like if you want the success and the money, if you can kind of focus on these three things, he’s kind of saying to you money should fall after that is the way I read it. But anyway.

Matt Mulcock
Yeah, I think you’re right. I think you’re totally right. And I think there’s a lot of lessons there for dentists when we talk about, you know, whether it’d be an associate trying to be an associate or buying a practice, the factors that should go into that, like we just talked to your client Abishek, it just came out and it was fantastic. Shout out to Abishek is a fantastic episode, but talked about the priorities of how to find a practice if you’re trying to buy one or don’t going to be an associate, I think these three points here are a great lesson. So.

Jake Elm
Shout out.

Matt Mulcock
If just to come back to this really quick, number one, don’t sell anything. You wouldn’t buy yourself to me. That speaks to the philosophy of dentistry. If you’re an associate going to work for someone, what’s that philosophy? Is this, is this the type of approach you’d take for yourself? Would you be a patient there? And then the other two are pretty self-explanatory. Don’t work for anyone. You don’t respect and admire and then only work with people you enjoy. Again, that comes to the staff, the team that you’re working with. If you.

Jake Elm
Mm-hmm. And as a practice owner, just try and be somebody that other people would respect and admire, right?

Matt Mulcock
That’s the other key, right? I love that you just said that like, be that person. Number two, if you’re the person people are working for, try to be that person that they respect and admire. I love that. Okay, we just mentioned this on the last podcast we did that’s coming out before this one, Will. But Will mentioned this quote that I love. We’re bouncing all over the place, but hopefully it’s helped, I think it’s great. Okay, so the quote goes,

Jake Elm
Yeah.

Matt Mulcock
Rise in life who are not the smartest, sometimes not even the most diligent, but they’re learning machines. They go to bed every night a little wiser than they were when they got up. And boy, does that help particularly when you have a long run ahead of you. There’s a lot to that one. I think a lot of layers to that. Uh, what, I guess, do you have thoughts on that quote?

Jake Elm
No, it just, it really speaks to what we’ve been talking about, which is just having that long term mindset, right? A long term vision of, it’s not trying to know everything tomorrow. Whenever, a lot of times we go through this job and I feel like I know less about it now than I did a year ago as I learn more about it, but it’s, yeah. But it really is just kind of having that long term mindset and saying, the way I’m going to get there is not by knowing everything now, but just kind of slow and steady if I can learn something new every day, every month and try and improve a little bit, little bit.

Matt Mulcock
Donnie Krueger effect.

Jake Elm
Over time that’s going to compound to be pretty great things in the long run.

Matt Mulcock
Yeah, totally. I think this speaks to the concept of compounding. That’s why I love it so much is we think of compounding in the sense of investment returns. But I think he’s speaking to the fact that compounding is more than just investing. Right. It’s, it’s all of life. And I love what you just said, Jake, it’s really easy to get overwhelmed when we’re thinking about like the end goal, whatever that is, whether it be retirement or the person we want to be, the wealth we want to create, what, you know, whatever, but he’s speaking to.

Breaking this down bit by bit, day by day. I love what he said. Just going to bed a little wiser than when you woke up. That’s, that’s the goal. And if you do that enough, I think again, the compounding effect will lead to astronomical results. Again, quote, I don’t know where this came from. Maybe it was Charlie Munger, but there’s a quote I heard a while back. Actually in a webinar, by the way, we were doing a webinar and somebody wrote this in and I loved it.

Jake Elm
Mm.  Oh cool.

Matt Mulcock
Uh, it’s just a random dentist. I don’t think he’s, he or she is a client. They just like posted it. And, uh, the quote goes something along the lines of we tend to underestimate or sorry, we tend to overestimate what we can do in a year and underestimate what we can do in 10. And I think that kind of speaks to this is like, don’t try to take it all at once, don’t get overwhelmed just like step by step and over the course of a decade or more, you’ll be shocked at what you can accomplish. Uh, okay. Let’s wrap this up.

Jake Elm
Hmm.

Matt Mulcock
Jake, I think this has been packed with the Charlie Munger wisdom. Again, we’re just sharing what people have already mastered, which is the idea of Charlie Munger. Uh, do you have any quotes you want to finish up with or, or kind of close this out with?

Jake Elm
Mm-hmm. I don’t see, is there like a funny one here? Like in kind of, let’s see. Oh, again, this just speaks to, I just liked this one. He says, I’m personally skeptical of some of the hype that’s gone into artificial intelligence. I personally think old fashioned intelligence works pretty well. That’s just like speaks to his kind of way and kind of some of his, you know, humor there. And I, yeah, I think that’s great.

Matt Mulcock
Hahaha. Yeah. Uh, I love that. And I’ll finish with this one. I did not intend to get rich. I just wanted to get independent. I think that speaks to a lot of what we do and the, and the goals that we have, or there are clients have, and then we’re trying to help them accomplish is. It’s not about being rich. It’s not about a specific number on the screen. I think it’s about creating independence or freedom or, or I think what that speaks to a lot is like his individual value was getting independent.

Doesn’t have to be yours. Doesn’t have to be anyone else’s like being rich was a result of him focusing on getting independent. He just happened to get ridiculously wealthy. Uh, but as he says there, that was never his focus. It’s just kind of a result of it.

Jake Elm
Nothing to add, that’s great.

Matt Mulcock
So awesome. Well, uh, Jake, fantastic article. Uh, where can people find it if they want to read not only this one, but more of what you’re writing, we post them on the website.

Jake Elm
Yeah, it’s just again, it’s on Substack. Yeah, they’re on the website. If you just that’s probably the best place if you go to DennisAdvisor.com, there’s like our education library, I think they have tabs for each of kind of the advisors there.

Matt Mulcock
Hang on. Is it dennisadvisors.com slash Jake? It better be. Let’s see.

Jake Elm
That might be it.

Matt Mulcock
I’m finding out. Yeah, it is. Okay. There it is. Booyah. I’m glad I just figured that out. Dennisadvisors.com slash Jake. And, uh, you can find all his articles. Jake posts a weekly article weekly, which is fantastic. It’s just incredible, man. I’ve, I’ve tried, I’ve tried the writing thing for a consistent period of time. It is amazing that you can do it that, uh, that often.

Jake Elm
Real time. Yeah. That’s the easiest way. Yeah. Go to DennisFisher.com backslash Jake. There we go.  Weekly, yeah. I just try and keep them really short. That’s what helps. I want them to be longer than a tweet but shorter than kind of a full-blown article. Hopefully it takes you a minute to read or so, right? Is kind of the goal there.

Matt Mulcock
Yeah. No, it’s great. I’m a slow reader, so it takes me a little longer, but, uh, this was awesome. Jake, thank you so much. Everyone. Thank you for listening. If you want to talk to us about Charlie Munger or anything else, you want to just tell us your story. We love to hear your story. And even if it’s one of those things that we just want to answer some questions and give, point you in the right direction. We love to do that. Again, we talked to hundreds of dentists every single year. We would love to talk to you. Dennisadvisors.com click on the big green book.

Uh, free consultation button again, share your story. We don’t know when this is coming out, but probably in the new year, I’m going to guess. So, uh, I’m going to go with that. Happy new year, everyone. By the time you listen to this until next time, uh, have a great day. Bye bye.

Jake Elm
See ya.

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