Charlie Munger Was Asked How To Avoid Spoiling Children When You're Rich — Warren Buffett's Longtime Partner Gave His Realistic Advice: 'Lose Your Fight As Gracefully As You Can'

Billionaire investors and Berkshire Hathaway executives Warren Buffett and Charlie Munger will forever be known for their annual shareholders meetings that often included advice on investing and life lessons.

A question at the 2011 annual shareholders meeting highlighted advice on how rich people should handle their children.

What Happened: At the 2011 annual Berkshire Hathaway shareholders meeting, Buffett and Munger took turns answering a unique question about parenting from an audience member.

The question was how to get rich people’s kids to stay incentivized.

"How would you incentivize him or her to compete against the hungry and highly motivated kids from emerging markets like China, Brazil, Russia, or India?" the audience member asked.

Buffett, who has three children, attempted to answer the question first by sharing his perspective on parenting while being wealthy.

"If you are very rich and you bring up your kids to think that they are more important in society or that they have some special privilege… that's just a terrible mistake," Buffett said.

Buffett later said he was rich when his kids got into high school and college.

"I certainly didn't want to give them the idea that they were special just because their parents were rich."

The billionaire, who is also known as the Oracle of Omaha, said you don't want to get a bad result or have children who don't have any incentive because their parents are rich. He noted that while it’s crucial to avoid stifling ambition, it’s equally important not to create incentives for them to compete with their parents’ successes.

"I don't think that makes sense."

Buffett added that if you’re wealthy and your children lack motivation, the responsibility ultimately falls on the parents.

He emphasized that it’s crucial for children of wealthy parents to be raised with the understanding that they shouldn’t rely on others to do the work for them, as this could lead to poor outcomes.

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Charlie Munger's Advice: When discussing entitlement, Buffett remarked that none of Munger’s children seemed to have that mindset. Munger, the longtime Berkshire Hathaway vice chairman, who passed away in November 2023 at 99, said it's important to have the right expectations when it comes to parenting while being wealthy.

"I don't think you can raise children, an affluent family, and have them love working 60 hours a week," Munger said. "That's not going to work."

“To some extent, you are destroying certain kinds of incentives,” he added.

Perhaps, Munger's ultimate parenting advice that applies to being rich and raising kids and maybe life itself is something many will find familiar.

"My advice to you is lose your fight as gracefully as you can."

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Image created using artificial intelligence via Midjourney.