Charlie Munger Liked To Keep Things Simple, Saying, 'If Something Is Too Hard To Do, We Look For Something That Isn't Too Hard To Do'

In the realm of investment and decision-making, Charlie Munger, who died at age 99, championed a philosophy that simplicity improves performance. His approach, grounded in the principle of reducing complexity, has been influential across various industries and continues to resonate with professionals and enthusiasts alike.

In his book "Seeking Wisdom: From Darwin to Munger," author Peter Bevelin highlights Munger's methodology, emphasizing the importance of breaking down complicated problems into simpler components while maintaining a holistic perspective. This method, according to Bevelin, is crucial in navigating the complexities of the world efficiently.

Don't Miss:

• The world of startup investing is open to everyone. You have the chance to support groundbreaking innovations and secure your financial future.
• Peter Thiel, Mark Cuban and Warren Buffett funded early-stage startups and made millions. You don't need to be a well-connected billionaire to do the same.

Munger and his long-time business partner Warren Buffett frequently communicated the value of simplicity in their annual letters to shareholders. One of their core beliefs was that by focusing on easy decisions and avoiding difficult ones and eliminating unnecessary distractions, people can make significantly better decisions. 

Munger articulated this concept, stating at the 2006 Berkshire Hathaway Annual Shareholder's meeting, "If something is too hard to do, we look for something that isn't too hard to do. What could be more obvious than that?" He went on to explain that he and Buffett use a straightforward approach to investing: When faced with complex or uncertain investments, they place them in the “too hard” pile and instead focus on opportunities that are easier to understand and manage.

Trending: Investing in startups isn’t just for Silicon Valley elite. Ordinary individuals like you have the power to support innovative ventures and reap substantial rewards.

His strategy of "tuning out folly" and avoiding the clutter of unimportant matters aims to foster a clear mind, thereby enhancing the capacity to identify and act on sensible opportunities. This, Munger believed, not only simplifies the decision-making process but also leads to more favorable outcomes in investing and beyond.

The essence of Munger's philosophy lies in the power of simplicity and focus. By adopting a "simple" approach to complex problems and concentrating on what truly matters, people can achieve clarity of thought and improve their performance across various domains. 

For the average person, applying Munger's principles means adopting a more selective approach to information and focusing on simplicity. It's about recognizing that not all information is useful and that more knowledge doesn't always lead to better outcomes. By concentrating on the few key actions that produce the majority of desired results, you can prioritize more effectively and make more meaningful progress. 

Buffett and Munger's readiness to quickly categorize potential investments as “too hard” and move on embodies a crucial aspect of their success: the wisdom to know when not to engage. This approach has safeguarded their investments and emphasized the value of patience, discipline and a long-term perspective in investing.

Munger's legacy, characterized by his passion for simplicity, continues to offer valuable lessons on the effectiveness of a minimalist approach in achieving success.

Read Next:

• What decision made this 20-year-old a millionaire in 1 year?
• Copy and paste Mark Cuban’s startup investment strategy according to his colorful portfolio.