I’ve been thinking a lot about our society’s obsession with wealth lately. We’re constantly bombarded with images of luxury lifestyles and the message that getting rich is the ultimate achievement. But a recent video featuring Robert Herjavec recounting his meeting with the legendary investor Charles Munger made me reconsider this perspective entirely.
Munger, who recently passed away, was one of the most successful investors of all time alongside his business partner Warren Buffett. Yet what struck me most about Herjavec’s account wasn’t Munger’s financial success, but his philosophy about money itself.
The Process vs. The End Goal
What stands out in Herjavec’s recollection is how Munger never spoke about wanting to “be rich” as an end goal. Instead, he viewed making money as part of a larger process – one business would generate profits that would then fund another business, creating a cycle of wealth building.
This is fundamentally different from how most of us think about money. Many of us, myself included, have fallen into the trap of seeing wealth as the destination rather than the journey. We say things like “I want to be a millionaire” without considering what that money is actually for.
Munger’s approach reveals a more sophisticated understanding of wealth:
- Money is a means to create more opportunities
- Financial success should fuel further growth and development
- Wealth building is a continuous process, not a finish line
This perspective shift changes everything about how we might approach our financial lives. Rather than chasing a number in our bank account, we should be asking what that money enables us to build or create.
Substance Over Style
Another aspect of Munger’s life that challenges conventional thinking about wealth was his lifestyle choices. Herjavec notes the “lack of pomp and circumstance” in Munger’s life. Despite his billions, Munger lived in the same modest house he purchased in the 1950s.
This runs counter to our cultural expectations that wealth must be displayed through mansions, luxury cars, and other status symbols. Munger clearly understood something that many wealthy people miss: true financial freedom means being unburdened by the pressure to impress others.
His choice to live simply wasn’t about being frugal for frugality’s sake. It reflected a deeper understanding that:
- Authentic happiness rarely comes from material possessions
- Financial security provides more value than flashy displays of wealth
- Long-term thinking often requires rejecting short-term indulgences
This approach allowed Munger to focus his resources on what truly mattered to him, rather than what society expected of someone with his net worth.
Reframing Our Relationship With Money
The most powerful insight from Herjavec’s story comes at the end: “Money is a tool, no different than a hammer or a saw. If you want to build the house of your dreams, you need to know how to use the tools.”
This metaphor perfectly captures what’s missing in most conversations about wealth. We wouldn’t obsess over collecting hammers without having a plan to build something. Similarly, accumulating money without a vision for its purpose misses the point entirely.
I believe we need to start asking better questions about our financial goals. Instead of “How can I get rich?”, perhaps we should ask:
- What am I trying to build with my financial resources?
- How can money help me create the life I truly want?
- What tools and skills do I need to use money effectively?
When we view money as a tool rather than a goal, we gain clarity about our true objectives. The focus shifts from accumulation to application, from having to doing.
Charles Munger’s example reminds us that the wealthiest life isn’t measured by dollars in an account, but by how effectively we use our resources to build something meaningful. That’s a lesson worth far more than money itself.
Frequently Asked Questions
Q: How did Charles Munger view wealth differently from most people?
Unlike many who see wealth as an end goal, Munger viewed money as part of a larger process. He focused on using profits from one business to fund another, creating a cycle of wealth building rather than accumulating money for its own sake. His approach emphasized money as a tool for creating opportunities rather than as the ultimate objective.
Q: Why did Munger choose to live in a modest home despite his billions?
Munger lived in the same house he purchased in the 1950s because he valued substance over style. His lifestyle choices reflected his understanding that true financial freedom comes from being unburdened by social pressures to display wealth. This allowed him to focus his resources on what truly mattered to him rather than on impressing others with material possessions.
Q: How can viewing money as a tool change our approach to personal finance?
When we see money as a tool rather than a goal, we focus more on how we can use our financial resources to build the life we want. This perspective shift encourages us to develop skills in using money effectively, much like learning to use a hammer or saw properly. It also helps us clarify our true objectives beyond simply accumulating wealth.
Q: What can we learn from Robert Herjavec’s meeting with Charles Munger?
Herjavec’s account highlights how even successful entrepreneurs can benefit from reconsidering their relationship with money. His realization that he had been talking about money as an end goal rather than as a process shows how pervasive this mindset is, even among financially successful people. Munger’s example demonstrates that a more sophisticated understanding of wealth can lead to both greater financial success and more meaningful outcomes.
