The Munger Technique: The Best Way To Improve Yourself

Today's blog post is based on an article by Darius Foroux:

We’ve all heard about the magic of compounding interest. Something equally powerful is mental compounding interest. Here’s some advice from the investor Charlie Munger that I read in the book, University of Berkshire Hathaway:

“He (Munger) got the idea to add a mental compound interest as well. So he decided he would sell himself the best hour of the day to improving his own mind, and the world could buy the rest of his time. He said it may sound selfish, but it worked. He also noted that if you become very reliable and stay that way, it will be very hard to fail in doing anything you want.” 

I’ve been calling this idea the Munger Technique since I learned about this. But when I mention this to my students, team, or friends, the majority assumes that Munger is talking about a morning ritual.

That’s a wrong assumption. Munger said that he sold himself the best hour of the day. He used that hour to improve his mind.

If you don't know who Charlie Munger is, he's Warren Buffet's business partner at Berkshire Hathaway.

This ties in with the idea of kaizen, which I wrote about here.

You need to figure out which hour of the day is your best hour:

One of my key beliefs is that life is cyclical. I learned this from studying successful investors like Howard Marks. 

They often stress that on a day to day basis, stocks go up and down a lot. But if you look at the stock market over ten, twenty, or thirty years, you see a steady upward trend. 

Something similar happens to our days. One day you might feel good, another day, you might feel tired. It’s just like the stock market. And that’s why I’m not a fan of morning rituals. It’s simply unrealistic to expect you to feel the same way every single day of your life. 

I understand the argument for morning routines. The idea is that a good morning ritual will make your day better. But in my experience, that’s not the case. 

Sometimes you simply wake up with less energy. Sometimes you have an emergency. If you have kids, your mornings are dedicated to them. In those cases, you can meditate all you want, you’ll still be tired or have to deal with that emergency. 

You can think of many reasons morning routines don’t work. But the Munger Technique always works. Let me explain why.

As you can see, your best hour of the day may not be the same hour every day. Darius then talks about one of my childhood heroes, Bruce Lee:

If we adopt the mindset of an investor, and realize that our days might be up and down, how can we still be reliable over the long-term?

We can do that by adopting what I call a “Water Mindset.” I named this after Bruce Lee, who believed that we must be like water. Water always adopts the shape of its surroundings.

If you didn't already know this, I lived across the street from Bruce Lee for several years before and after "The Green Hornet".

And the Munger Technique will help you to become like water. Give yourself the best hour of the day. And your best hour might be in the morning one day, and it might be after dinner the next. But it must be your best hour (not what some blogger says). 

This technique has massively shifted the way I learn. I no longer get frustrated if I can’t learn in the morning, I simply realize it’s not my best hour. When it comes to improving your mind, you want to be in a relaxed, more flow-like state. You want to feel good, energetic, and rested.

And yes, as Munger says, it sounds selfish, but it works. Over the long-term, it will make you more reliable. When you improve your mind a bit every day, that results in mental compounding interest. It will become very hard to fail at anything in life that way.
You know what I realized over the last few months as I’m applying this technique? My best hour is often after dinner. Especially if I’ve worked out that day and was productive at work. I’ll have dinner, maybe relax a bit, grab a cup of tea and get down to it.

Before this, I would often watch some videos on YouTube or browse the internet. Often, you don’t even realize what’s the best hour of your day. You must be conscious and always keep adapting your habits so that it’s in line with your energy. Look, maybe my best hour will be the first hour after I wake up again. Who knows? But as long as you adopt the shape of water, you will adapt. 

Give this Munger Technique a try. From tomorrow, give the best hour of your day to improving your mind. If you do it every day, the knowledge will compound.

Interesting days

Today - Hammock Day, Hot Dog Day, Creme Brulee Day, Mango Day and Penuche Fudge Day

Tomorrow - Peanut Butter and Chocolate Day, Sprinkle Day, International Yada, Yada, Yada Day, Gorgeous Grandma Day and Vanilla Ice Cream Day

Week long celebrations:

Jul 18 - Jul 26: Moth Week

Next Wednesday - International Chicken Wing Day, International Tiger Day, Rain Day, Lipstick Day and Lasagna Day

August 22 - Be An Angel Day, Eat A Peach Day, Pecan Torte Day and Take Your Cat to the Vet Day