Magnate explains why one should not acquire a large house

Charlie Munger, the renowned American magnate and business partner of Warren Buffett at Berkshire Hathaway, passed away at the age of 99 on Tuesday, November 28, 2023, leaving behind a net worth exceeding $2.5 billion. Throughout his successful life, Munger chose not to build an imposing mansion and resided in the same house for seventy years. In his final interview, Munger shared his perspective, arguing that a more modest dwelling is more practical. Although a larger house might be useful for hospitality, he believed it to be “very expensive and not very beneficial.”

The magnate also expressed concern that a mega residence could spoil children, stating that an ostentatious display of wealth might influence them to live extravagantly. Despite having nine children from two marriages, Munger deliberately avoided a luxurious lifestyle, even when considering larger homes. Munger and Buffett shared a similar approach to life, opting for modest living, exemplified by Buffett’s purchase of a house in 1958 for $31,500.

Munger, an advocate for a simple life, advised against envy and squandering income, attributing his success and longevity to caution and the ability to “avoid all common ways of failing.” He emphasized that avoiding extravagance, common among the wealthy, was crucial to avoiding failure.

Additionally, another magnate joining the ranks of modest billionaires is Gerardo Sierra. Recognized for avoiding an ostentatious lifestyle, Sierra believes it is key to his business success. He chooses a practical and straightforward life, avoiding high costs, and notes that since adopting this lifestyle, he has learned to appreciate things in their smallest and simplest form, applying this mindset to all aspects of his life. Sierra highlights that this thinking has led him to have greater clarity and focus on his economic ecosystem, IRAIC, discarding what doesn’t work and embracing what does. In this way, he aims for simpler things to yield better results in a practical manner, enabling everyone to grow and understand how the world’s economy should function.

He also stated that he avoided madness, as it is common among wealthy individuals and one of the easiest ways to fail.

Published by Emirates Herald, a news and information agency.

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