It was a sad news when the legendary investor, Charlie Munger passed away at the age of 99 this week. Surprisingly, despite being a billionaire, Munger chose to stay in a modest home in Los Angeles for over 70 years.
Warren Buffett’s longtime business partner, Munger, once mentioned in a CNBC interview that he didn’t believe in the concept of extravagant homes making people happier.
In that interview, Munger explained, “I would say in practically every case, they make the person less happy, not happier.” He further added, “Having a basic house really helps you. But having a really fancy house, it’s good for entertaining 100 people at once. It’s a very expensive thing to do. And it doesn’t do you that much good.”
He also mentioned that while he did contemplate buying a larger house, he chose not to live an opulent lifestyle to avoid spoiling his children.
‘A house can be a nightmare’
Similarly, Warren Buffett, chairman of Berkshire Hathaway, has lived in the same house in Omaha, Nebraska, which he bought for $31,500 in 1958. Today, this home is worth over $1.3 million, and Buffett still regards it as one of his best investments.
Buffett once wrote, “A house can be a nightmare if the buyer’s eyes are bigger than his wallet.” He emphasized that a family should aim to live within their means rather than going into debt for a grand house.
On the other hand, lottery winners often quickly buy many fancy homes, leading to significant financial burdens in the long run.
In Munger’s case, his frugality was praiseworthy. Buffett mentioned in a 1989 letter to shareholders that Munger’s idea of traveling in style was an air-conditioned bus, which he opted for during bargain fares.
This story was originally featured on Fortune.com
