Charlie Munger Was a Genius for This (Not What You Think)
Summary
- When faced with complex deals, Charlie Munger often says "too hard," demonstrating a strong commitment to simplicity.
- Charlie Munger is known as one of the greatest investors, and his approach reveals the importance of knowing your limits and focusing on what's manageable.
- Warren Buffett has remarked that you should aim for businesses so great that even an idiot could run them, but then ensure excellent people are in charge instead.
- This wisdom guides the selection of businesses to invest in as well as the business models to consider; simplicity can escalate to complexity at scale, but complexity at scale may turn into an unmanageable task.
- Making strategic business decisions often comes down to choosing between the slightly more complicated path and the simpler one; opt for simplicity as complexity will inherently grow with scale.
- Charlie's perspective gives permission to opt out of difficult situations, acknowledging that it's okay to let go of tasks that are excessively challenging.
- By rejecting overly complex tasks, you can conserve mental energy and focus on endeavors where you can actually make a difference.
Video
How To Take Action
I would suggest keeping things simple, just like Charlie Munger does. He says "too hard" to complex deals, and that's smart. When you've got a tough choice, pick the easier route. Here's how you can put this into action:
Assess Opportunities – When a new project or deal comes your way, think, is this simple or too hard? If it feels confusing or tricky, it might not be worth your energy.
Know Your Limits – Like Munger, know what you're good at and where you draw the line. Stick to what you can manage, and don't be afraid to say no to the rest.
Choose Simplicity – When you’re making business choices, go for the simpler one. Complex stuff gets even more complex when you grow, so start easy.
Focus Your Energy – Don’t waste time on impossible tasks. Let them go. This way, you’ll have more brain power for the things you're really good at.
Hire the Right People – Have a business that anyone could handle, but get great people to run it. A simple business model means you can attract excellent staff who'll make things thrive.
Give Yourself Permission – Just like Charlie, it's okay to pass on things that are too hard. It saves your mental energy for the big wins where you can make an impact.
Remember, as you grow, keeping it simple will save you from getting stuck. So stick to simple, and let your business bloom without getting tangled in complexity.
Quotes by Alex Hormozi
"Charlie's most common response to Deals was too hard"
– Alex Hormozi
"It just showed his absolute commitment to Simplicity"
– Alex Hormozi
"We want to have businesses that are so wonderful that an idiot could run it"
– Alex Hormozi
"Often times if it's simpler at scale it becomes complex and complexity at scale becomes impossible"
– Alex Hormozi
"Charlie gave me a lot of permission to just say too tough too hard for me"
– Alex Hormozi
Full Transcript
Charlie's most common response to Deals was too hard that shows so much humility in how he'd approached he's one of the greatest investors of all time and he was brilliant he would just say too hard obviously he could think about it harder and figure it out or he probably did already know what it was but it just showed his absolute commitment to Simplicity and I think Warren was uh quoted by saying we want to have businesses that are so wonderful that an idiot could run it and then have wonderful people run it instead I think about that a lot with the businesses that we want invest in and even the business models that we choose to pursue because often times you have strategic decisions you need to make in your business you're like okay well there's this slightly more complicated thing or this simple thing which one should I do well often times if it's simpler at scale it becomes complex and complexity at scale becomes impossible and so he takes the path of leas resistance when it comes to some of these decisions Charlie gave me a lot of permission to just say too tough too hard for me and I think a lot of times letting yourself off saving all that mental energy of trying to make an impossible or complex task work rather than just saying I'm opting out
