Charlie Munger


wealthymatters.comFor all those who are like who the heck is this Charlie?And there are many who would ask the question where I come from. Charles Thomas (Charlie) Munger is an investment manager. He is Vice-Chairman of Berkshire Hathaway Corporation and Warren Buffett’s long term associate. Munger is also the chairman of Wesco Financial Corporation, based in Pasadena, California. Wesco Financial is an 80.1%-owned subsidiary of Berkshire Hathaway. It began as a savings and loan association, but now controls Precision Steel Corp., CORT Furniture Leasing, Kansas Bankers Surety Company, and other ventures. Wesco Financial has an equity portfolio of over $1.5 billion dollars that is concentrated in Coca-Cola, Wells Fargo, Procter & Gamble, Kraft Foods, US Bancorp, and Goldman Sachs.

Buffett has often publicly stated that he regards Charlie Munger as his partner.  In fact Charlie Munger owns enough Berkshire Hathaway stock to be a bona fide billionaire in his own right. There are many similarities between these two long time friends.However the lesser known Charlie Munger is not a carbon copy of Warren Buffett.There are distinct differences in the way in which the two long -time friends think .Ofcourse what is so fascinationg is how both these people’s thoughts mesh to create a better whole.Also Warren Buffett is known to devote his time almost exclusively to his business, while Charlie Munger, who does not involve himself in the day-to-day operations of Berkshire, is a generalist for whom investment is only one of a broad range of interests.

Charlie Munger is a great admirer of Benjamin Franklin.His thoughts are compiled in a 500 odd pages tomb called “Poor Charlie’s Almanack”.

Charlie Munger believes in thinking about things by inverting. So to understand how to be happy in life, Charlie will study how to make life miserable; to examine how businesses become big and strong, Charlie first studies how businesses decline and die; most people care more about how to succeed in the stock market, Charlie is most concerned about why most have failed in the stock market. Read more of this post

Benjamin Franklin’s Will


wealthymatters.comWhile checking up the facts of the story at http://www.crackerjackgreenback.com/the-basics/compound-interest-a-lesson-from-benjamin-franklin/ , before posting  https://wealthymatters.com/2011/01/25/benjamin-franklins-gift/  , I came a cross the text of of Benjamin Franklin’s will at  http://fi.edu/franklin/family/lastwill.html .I have highlighted the parts I found interesting and added a few observations.I plan on using this will to help me draft my own.I hope you find this will as interesting to read as I did.

 The Last Will and Testament of  Benjamin Franklin

I, Benjamin Franklin, of Philadelphia, printer, late Minister Plenipotentiary from the United States of America to the Court of France, now President of the State of Pennsylvania, do make and declare my last will and testament as follows:

To my son, William Franklin, late Governor of the Jerseys, I give and devise all the lands I hold or have a right to, in the province of Nova Scotia, to hold to him, his heirs, and assigns forever. I also give to him all my books and papers, which he has in his possession, and all debts standing against him on my account books, willing that no payment for, nor restitution of, the same be required of him, by my executors. The part he acted against me in the late war, which is of public notoriety, will account for my leaving him no more of an estate he endeavoured to deprive me of.

Having since my return from France demolished the three houses in Market Street, between Third and Fourth Streets, fronting my dwelling-house, and erected two new and larger ones on the ground, and having also erected another house on the lot which formerly was the passage to my dwelling, and also a printing-office between my dwelling and the front houses; now I do give and devise my said dwelling-house, wherein I now live, my said three new houses, my printing- office and the lots of ground thereto belonging; also my small lot and house in Sixth Street, which I bought of the widow Henmarsh; also my pasture-ground which I have in Hickory Lane, with the buildings thereon; also my house and lot on the North side of Market Street, now occupied by Mary Jacobs, together with two houses and lots behind the same, and fronting on Pewter-Platter Alley; also my lot of ground in Arch Street, opposite the church-burying ground, with the buildings thereon erected; also all my silver plate, pictures, and household goods, of every kind, now in my said dwelling-place, to my daughter, Sarah Bache, and to her husband, Richard Bache, to hold to them for and during their natural lives, and the life of the longest liver of them, and from and after the decease of the survivor of them, I do give, devise, and bequeath to all children already born, or to be born of my said daughter, and to their heirs and assigns forever, as tenants in common, and not as joint tenants. Read more of this post

Benjamin Franklin’s Gift


wealthymatters.com Yesterday while searching for a graph to illustrate how important time is to compound interest,I came across a wonderful post at http://www.crackerjackgreenback.com/the-basics/compound-interest-a-lesson-from-benjamin-franklin/ .Here it is in full below. 

In 1785, French mathematician Charles-Joseph Mathon de la Cour wrote a parody of Benjamin Franklin’s ‘Poor Richard’s Almanack’. The Frenchman called his parody ‘Fortunate Richard ‘and, attempting to mock the American optimism so well-represented by Franklin, wrote that Fortunate Richard left a small sum of money in his will to be used only after it had collected interest for 500 years.

Mr. Franklin thought the idea was fantastic and wrote back to Monsieur de la Cour thanking him. Franklin decided to leave a bequest of £1,000 (about $4,550 at the time of his death) each to his native hometown of Boston and adopted hometown of Philadelphia on the condition that it gather interest for 200 years. Franklin believed 200 years was the maximum length of time any person should be able to control assets from beyond the grave.

The Strings

In 1789, Benjamin Franklin added a codicil, or supplemental provision, to his will providing about $4,550 each (about $108,000 in 2008 dollars) to Boston and Philadelphia. Mr. Franklin stipulated that the funds should be used to make loans at 5% interest to young craftsmen under the age of 25 to help them set up their businesses. The loans were to be given only to those craftsmen who were married, had completed their apprenticeships, and could obtain two co-signers to vouch for them.

After 100 years, each city was to take 75% of the fund to use for public works (like bridges, pavement, public buildings, and the like). They were to then continue loaning the money for another 100 years. At the end of that 100 years, each city would get about 25% of the money and their respective states would get the rest. Had Boston and Philly followed through with Franklin’s wishes successfully, they would each have had nearly $20,000,000 in their funds at the end of the 200 years. Read more of this post

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