'Nobody Had Any Money. The Rich People Didn't Have Any Money,' Said Charlie Munger About The Great Depression – 'It's Been Very Helpful To Me'

Charlie Munger (1924-2023), the former Vice Chairman of Berkshire Hathaway and longtime partner of Warren Buffett, shared fascinating insights about the Great Depression in a conversation with Michigan Ross Dean Scott DeRue in 2017.

Munger, who was born in Omaha, Nebraska, in 1924, lived through the Great Depression (1929–1939), an era that shaped his life perspective and investment philosophy. He said he was very fortunate in the nature of his parents, their friends, and the public schools he attended, as they were “pretty remarkable by the standards of the time.” 

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He recalled the terrible economic conditions that characterized that era by saying, “It was so extreme that people like you have just no idea what the hell it was like. There was just nobody [who] had any money. The rich people didn’t have any money. People would come and beg for a meal at the door.” 

The extent of poverty was so overarching that Munger saw people living in “hobo jungles” near his grandfather’s house. Still, he viewed the experience somewhat positively, stating, “It’s been very helpful to me.”

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During the Great Depression, Munger also saw firsthand how people could bounce back and adjust when facing such tough times. He watched as families, including his own, found ways to support each other despite having little money. 

“My grandfather … he just determined to get out of poverty and never go back,” Munger explained. This drive to overcome challenges and make smart financial choices became a key part of Munger’s philosophy.

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Munger’s family also valued education and clear thinking. His paternal grandfather, a federal judge, believed that “you have a moral duty to make yourself as unignorant and as unstupid as you possibly can.” This way of thinking shaped how Munger approached problems and made decisions throughout his career.

Thinking back on his childhood, Munger highlighted how crucial it is to learn from your experiences and be willing to change your mind as you learn new things. He said, “The whole trick in life is to get so that your own brain doesn’t mislead you.”

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Seeing so many different things, like the Great Depression and World War II, helped Munger understand how to deal with complicated financial situations. 

Munger’s reflections offer valuable lessons for today’s world. His views on adaptability, rationality, and learning from history are as relevant now as they were during the 1930s. As Munger stated, “It’s amazing how if you just get up every morning and keep plugging and have some discipline and keep learning, it’s amazing how it works out.” 

Perhaps most importantly, he believed it’s not wise to have an ambition to be president of the United States or be a billionaire or something similar, as the odds are too much against you. He thought it was much better to aim low, saying, “I did not intend to get rich. I wanted to get independent. [I] just overshot!”

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