Hi everyone! How’s your week going?

Welcome back to our series on Poor Charlie’s Almanack. We’re still diving into Chapter 10, all about Charlie Munger’s common sense. In this chapter, Munger points out that gaining wisdom is not just smart—it’s a moral responsibility. To succeed in life and learning, it’s important to gain cross-disciplinary knowledge and avoid extreme ideologies.

13. Make the Most of Your Resources, Don’t Spread Them Evenly

Munger says: maximize inequality to get the best results. What does that mean?

John Wooden, the legendary UCLA basketball coach, offers a classic example. He once told his five weakest players: “You won’t play in games; you’re just practice partners.” Almost all the game time went to his seven strongest players.

The result? Those top players learned more and improved faster. Wooden’s approach, focusing resources on those who could learn most, led to more wins.

Life is like a game—it’s competitive. You want the most capable, motivated people fully engaged. You wouldn’t pick a neurosurgeon by lottery, or design planes with extreme equality. Even companies, like Berkshire Hathaway, focus on top performers.

Munger often tells a joke about Max Planck. After winning the Nobel Prize, Planck gave the same talk on quantum physics across Germany. His driver memorized it. One day, the driver gave the lecture while Planck sat in the audience. When a tricky question came up, the driver said: “I’ll let my driver answer—it’s such a simple question here in Munich!”

14. Value Hard Work and Frugality

If you want to excel in any field, you must have strong interest. You can force yourself to do things decently, but without passion, you won’t achieve excellence. Passion drives focus, effort, and persistence.

Munger also emphasizes hard work. He admired extremely diligent partners. Early in his career, during the Great Depression, two partners formed a construction company with a simple rule: “Everything is split equally. If we fall behind, we work 14 hours a day, 7 days a week, until we catch up.” That discipline and diligence led to great success.

15. Failure is a Teacher

Life can hit hard and unfair. Some people overcome it, some don’t. Stoic philosopher Epictetus taught:

                  1.Misfortune is inevitable, but we can control our response.

                  2.Every setback is a chance to train your mind.

Munger highlights: turn misfortune into learning and self-improvement. Don’t wallow in self-pity—use challenges to grow. True luck comes from mindset and preparation, not external circumstances.

Munger himself practiced this: he expected problems, prepared for them, and approached challenges calmly. This mindset reduces anxiety and improves decision-making.

16. Trust is the Best System

In law and other fields, bureaucracy is common. But complex procedures aren’t always the best system. A network of reliable people who trust each other works better.

Example: Mayo Clinic’s surgery system relies on trust, not endless rules. Excessive bureaucracy could cost lives. In life and work, aim to build a seamless trust network rather than overcomplicate with rules.

Finally, Munger concluded his speech with a metaphor from Pilgrim’s Progress:

“My sword is left to those who can wield it.”

Life is like the journey of the Pilgrim: face temptations, overcome challenges, learn from setbacks, collaborate with trustworthy people, and persist to reach your ultimate goal.

That’s it for today’s episode!

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Start practicing financial wisdom now, so you can live a happier, richer, and more meaningful life. Take care,  and see you next time!