Charlie Munger: How to Invest Small Amounts of Money

I just came across a long lost clip of Charlie Munger explaining the three things he would do to generate 50% annual returns investing small amounts of money. This clip looks like it was shot on an iPhone 4 but it is Munger at his absolute best. If you want to build real wealth, you need to see it. There is an old saying that it “takes money to make money”. This saying may be true, but the amount of money you need to get started generating high returns is not as much as many would believe, according to Munger.

Charlie Munger is the Vice President of Berkshire Hathaway and Warren Buffett’s business partner. There are three important principles you need to understand if you want to follow Munger’s advice on generating high returns on small sums of money.

The first principle is “Look in the inefficient markets”. Munger is the Vice Chairman of Berkshire Hathaway. As of the making of this video, Berkshire has a market cap approaching 0 billion. That makes Berkshire the 9th largest company in the world by market cap and the biggest non-tech, US based company in the world.

To most people, Berkshire’s massive size would seem like a huge advantage when it comes to investing, right? Well, actually, that’s not the case. Charlie and Warren have repeatedly said that Berkshire’s size is an impediment to generating high investment returns. Because Berkshire has so much money, Warren and Charlie are forced to only focus on large investment opportunities. The odds of these large investment opportunities being mispriced, or to use an investing term, inefficient, are extremely low.

*Disclaimer: Neither this video, not any content produced on this channel should ever be considered investing advice or official financial advice. All content is made for entertainment and educational purposes.

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19 Comments

  1. Learning how to invest even a small amount of money at a young age matters. A Teenager’s Guide on how to Invest Like Warren Buffett and Charlie Munger teaches the principles to their investment success.

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