Charlie Munger Swore By Following 'Grandma's Rule' Of Eating Your Carrots Before Dessert If You Want Success in Life — Here's What He Meant

Charlie Munger, Warren Buffett’s longtime business partner and an accomplished investor in his own right, left an indelible mark on the investment community before passing away at 99. His sharp wit and profound insights continue to inspire and educate, offering valuable lessons for life and business.

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The Power of "Grandma’s Rule"

Munger introduced "Grandma’s Rule" during his famous 1994 speech at the University of Southern California (USC) Business School. He used this analogy to structure his lecture, saying:

"I’m going to play a minor trick on you today — because the subject of my talk is the art of stock picking as a subdivision of the art of worldly wisdom. That enables me to start talking about worldly wisdom. This much broader topic interests me because I think all too little of it is delivered by modern educational systems, at least in an effective way."

He explained, "Some of you may find it interesting that Berkshire Hathaway is now the most successful investment operation in the world … And I can teach you a lot about how that was done. However, I can’t do it if I don’t first teach you about a few basic notions."

Munger likened his approach to "Grandma’s rule," stating, "The carrot part of this talk is about the general subject of worldly wisdom, which is a pretty good way to start. After all, the theory of modern education is that you need a general education before you specialize. And I think to some extent, before you’re going to be a great stock picker, you need some general education."

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This concept of eating your carrots before dessert translates in business to tackling difficult but necessary tasks before indulging in more enjoyable activities. Munger advised, "The business version requires that executives force themselves daily to first do their unpleasant and necessary tasks before rewarding themselves by proceeding to their pleasant tasks."

This approach emphasizes:

1. Discipline: Prioritizing important work over immediate gratification
2. Long-term thinking: Investing effort now for future rewards
3. Personal growth: Embracing discomfort as a pathway to improvement

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The Importance of Worldly Wisdom

In the same USC lecture, Munger stressed the significance of "worldly wisdom," which involves having a wide-ranging understanding of various subjects. 

He suggested that one should develop "multiple mental models," meaning frameworks or ways of thinking drawn from different fields. Munger believed that by integrating experiences, both observed and personal, within these diverse models, individuals can better understand and navigate complex situations. He advocated for a broad, interdisciplinary approach to thinking and problem-solving.

Key Principles for Success

Munger’s wisdom extends beyond investment strategies:

1. Continuous learning: "I think a life properly lived is just learn, learn, learn all the time."
2. Avoiding negative behaviors: "You don’t have a lot of envy, you don’t have a lot of resentment, you don’t overspend your income, you stay cheerful despite your troubles."
3. Understanding incentives: "Never, ever think about something else when you should be thinking about the power of incentives."
4. Embracing mathematics: "First, there’s mathematics. You’ve got to be able to handle numbers and quantities — basic arithmetic. And the great useful model, after compound interest, is the elementary math of permutations and combinations."

By applying these principles, individuals can cultivate success in various aspects of life, from personal development to professional achievements. Munger’s enduring wisdom, as exemplified by "Grandma’s Rule" and his emphasis on worldly wisdom, continues to provide valuable guidance for both investors and those seeking personal growth.

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