Very few people are born rich. Most people’s wealth accumulation takes a long time. In fact, before everyone becomes rich there will be some signs of a change in your thinking and actions from before. If you can recognize and continue to maintain, you will be able to get closer and closer to success.
So what are these signs? Thanks to his rich experience, Warren Buffett’s investment advisor, billionaire Charlie Munger once gave the following 3 suggestions.
1. Be less judgmental, have multi-dimensional thinking
Referring to Charlie Munger, many people will immediately think of his multidimensional thinking. In the eyes of this billionaire, an incident can be viewed and explained from many different angles.
This may have been influenced by Munger’s multidisciplinary experience. At first he studied Mathematics, but then because of the war, he was interrupted. Munger moved on to study the natural sciences and engineering in the military. After moving to California, he specialized in thermodynamics and meteorology. When he retired, he attended Harvard Law School and eventually became a lawyer.
In Munger’s eyes, an event can be viewed and interpreted from many different angles. Photo: ST
So how can we ordinary people achieve multidimensional thinking like Munger? In fact, this method is not difficult, but first you have to reduce your subjective judgment. The less you rush to comment, and instead think about the movement or interpretation of an event, which will help you gradually form rich thoughts.
For example affirm that this company is good, that company is not good, what you do is wrong, what is right. These things have many interpretations from many different angles, are you thinking multidimensionally or always just thinking from one direction?
Munger often cites a proverb: “To the man with the hammer, the whole world is like a nail.” That is the limitation of one-way thinking. On the contrary, when you have a multi-dimensional mindset, you will gradually be able to see things thoroughly, make business decisions, invest more accurately, and take one step closer to wealth.
2. Have a clear and focused principle, don’t follow the crowd
According to Munger, to become rich, you need to know what you want and don’t change it easily.
For example, he and Buffett have long adhered to a “value investing” strategy. Regardless of whether in the industrial age or the age of the Internet, their consistent style is “only invest in projects they can understand and have potential value”.
Unlike many ordinary investors who conduct a superficial assessment of a company before investing or following a trend, Munger will always use multi-dimensional thinking to collect and process information, and ultimately act. According to the analysis results, every step is extremely smooth. Regardless of how people around him judge or there are times when thoughts waver, Munger never deviates from these principles.
Buffett and Munger have always adhered to a “value investing” strategy. Photo: AFP
Set your own clear principles and seriously implement it, you can be right on your planned journey. If you don’t already have principles in your work and life, Munger recommends making a list now.
Charlie Munger also listed a number of psychological tendencies that cause people to misjudge in a speech at Harvard in 1995. In it he mentioned the contagion effect, the effect that causes people to imitate each other’s actions without causing harm. no matter what the reason is. Munger found many entrepreneurs in the market just followed what everyone else did, pouring money into trend-following investments. This certainly does not make you rich, you need to have principles and decide things according to them.
3. Know how to simplify complexity
In Munger’s view, if one could see the simplest nature through complex phenomena, one would not be far from success. Think about it, if in your eyes everything can be solved by some simple methods, what else could be difficult for you?
Investors often find it difficult to choose between options. For Munger, just go through the list and it will be very clear whether to invest or not.
So how can we “simplify complexity”? In addition to having the ability to think multi-dimensionally and clear principles, you also need to have a “big picture”.
For example, when learning to drive at a driving school, you must first learn traffic laws and principles of car mechanics. But when on the road, the principles will be of little use. What you should do is to observe the general situation to make a decision according to the traffic situation at that time.
With each incident, you can find many angles, research and prepare carefully. But before you act, you must look at things in a simple and straight-forward way to solve problems quickly and efficiently and achieve success.
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