Charlie Munger Called This A 'No-Brainer'– 'Spend Less Than You Make. Always Be Saving Something. Put It Into A Tax-Deferred Account.'

Charlie Munger was the kind of man who could make something as straightforward as saving money sound like the smartest idea ever. Even though he's no longer with us, his wisdom echoes through the pages of "Poor Charlie's Almanac" – a treasure trove of what people now lovingly call "Mungerisms." These bits of advice guide investors and anyone looking to get ahead financially.

Don't Miss:

• Are you rich? Here’s what Americans think you need to be considered wealthy.
• Founder of Personal Capital and ex-CEO of PayPal re-engineers traditional banking with this new high-yield account — start saving better today.

"Spend less than you make. Always be saving something. Put it into a tax-deferred account. Over time, it will begin to amount to something. This is such a no-brainer!"

If this sounds like common sense, that's because it is. But Munger had a way of taking what people often overlook and turning it into a beacon of simple brilliance.

See Also: IRS Finalizes 10-Year Rule For Retirement Withdrawals, Making Things ‘Even More Insanely Complicated’

The Simple Genius of Spending Less

Munger wasn't trying to dazzle you with Wall Street jargon or fancy financial schemes. He was all about the basics. Spending less than you make is like planting seeds in a garden. If you keep at it, even if you start small, you will end up with something impressive over time.

Imagine you're bringing in $50,000 a year. Now, instead of living it up on the full amount, you decide to cut back a bit – maybe trim your expenses by $5,000. That's money in your pocket, not gone to some fleeting pleasure. You've just planted your first seed.

Trending: Can you guess how many retire with a $5,000,000 nest egg? – How does it compare to the average?

The Power of Saving

"Always be saving something," Munger said. Not sometimes. Not when you remember. Always. That's how small amounts of money turn into big amounts of money. This doesn't mean you need to deprive yourself of a good life, but it does mean being mindful about the future.

Let's say you take that $5,000 you saved and put it into a tax-deferred account, like an IRA or 401(k). The magic here is in the word "deferred." You're letting your money grow without Uncle Sam dipping into it yearly. The compounding interest – the money you earn on the interest you've already earned – starts to do the heavy lifting.

See Also: The number of ‘401(k)' Millionaires is up 43% from last year — Here are three ways to join the club.

How It Adds Up

Here's a simple example: if you save that $5,000 every year and earn a modest 6% return, in 30 years, you'll have around $395,000. That's nearly eight times what you originally put in! And that's with a conservative return rate. Imagine what could happen with a bit more growth.

Munger called this kind of saving a "no-brainer" because it is. The hardest part is getting started and sticking with it. But once you do, the rewards are undeniable. You don't need to be a financial genius to succeed; you just need to follow some time-tested advice and let it work its magic.

See Also: Can you guess how many Americans successfully retire with $1,000,000 saved? The percentage may shock you.

Why It's Still Relevant

Munger's advice might seem too simple in an age of crypto, NFTs, and high-tech trading. But simplicity often outlasts trends. While the world of finance gets more complex, the fundamentals Munger championed remain steady. Spend less than you make, save consistently, and let time do the rest. It's advice that's just as solid now as it was when he first shared it.

In the end, Munger's words are a reminder that building wealth isn't about taking big risks or getting lucky. It's about making smart, steady decisions and letting them compound over time. Another thing you may want to think about is consulting with a financial advisor to tailor these strategies to your situation, ensuring you're on the best path for your goals.

Read Next:

• Will the surge continue or decline on real estate prices? People are finding out about risk-free real estate investing that lets you cash out whenever you want.
• Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." These high-yield real estate notes that pay 7.5% – 9% make earning passive income easier than ever.