What separates people who achieve something from people who do not may not be talent at all. It may be one habit that everybody can adopt but 90% of people cannot sustain: reading every day. Charlie Munger said that most of the smart people he met in his life shared one excellent habit — they read every day. Buffett is a library on wheels; Munger is a bookshelf with two legs. The sheer volume they read astonishes me. ...
Thinking is a skill — and most people, myself included in the past, are not very good at it. Why? Because we tend to think in a straight line: we only approach a problem from the front, so some problems never get solved. The fix is simple. When a problem has resisted you for years, try Charlie Munger’s inversion: think it through backwards. Always invert. One example makes it clear. ...
Charlie Munger says an amateur investor only needs to ask two questions to decide whether index funds are right for them. First: how good am I as an investor? Is my own ability above the market average? Second: can I find an excellent fund manager? And are the managers I pick actually able to beat the market? Answer those two questions honestly, and you will know whether — as an amateur investor — you should be buying index funds. ...