Nati Harnik/AP/Shutterstock / Nati Harnik/AP/Shutterstock
American businessman and investor Charles Munger, best known as Warren Buffet’s business partner and vice chairman of holding company Berkshire Hathaway, has announced partial retirement at age 98. Although he will retain a role at Berkshire Hathaway, he has stepped down from his position. as chairman of Daily Journal Corp, a newspaper publisher and software provider. He has served the company in this role since 1977. GOBankingRates has indicated that he will remain a director and focus on the Daily Journal’s securities portfolio.
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With a net worth of $2.7 billion, according to Forbes, he surely could have afforded to retire decades earlier. Even so, he is only enjoying a partial retirement as he will continue to help Buffett with key capital allocation decisions at Berkshire Hathaway, according to Reuters.
Munger: The Early Years
Born in 1924 in Omaha, Nebraska, Munger grew up close to his eventual business partner Warren Buffett. They both worked at Buffett’s grandfather’s grocery store as teenagers, but not at the same time, learning discipline, customer service and business acumen. The boys earned about $2 for every 10 hours worked.
After high school, he went to the University of Michigan. He dropped out in 1943 and enlisted in the Army Air Corps. The Army sent him to CalTech to learn meteorology, then stationed him in Alaska where he never saw combat.
Using the GI Bill, Munger tried several universities before attending Harvard Law School. Never having earned an undergraduate degree, he entered based on a recommendation from a family friend. Munger earned his Juris Doctor magna cum laud in 1948.
How did Munger amass his wealth?
In 1949, along with his wife and children, Munger moved to California to work for the law firm Wright & Garrett, later founding his own firm. He continued to practice law until the age of 41, when he decided to work full-time.
He also immersed himself in real estate development and investment management, founding his own company in 1962 with Pacific Coast Stock Exchange trader Jack Wheeler. The highly successful investment firm has generated average annual returns of 19%, according to CelebrityNetWorth.com.
When he returned to Omaha for his father’s funeral in 1959, he was reunited with his childhood friend, Buffet. The two have remained friends over the years, frequently discussing investment strategies. After closing his own company in 1976, Munger joined Buffett’s investment firm Berkshire Hathaway as a vice chairman in 1978, a position he has held ever since.
In 2020, according to Salary.com, Munger earned a base salary of $100,000 at Berkshire Hathaway.
Munger explains why he doesn’t take a salary
In 2017, Munger said in an interview with Yahoo! News, “I want our example to spread more because I think if you’re rich and own a part of a company and you decide what it does and if it winds up or if it continues, that’s is a good position and maybe you shouldn’t be trying to get all the extra money back in. And that’s my theory on executive compensation.
He added that many entrepreneurs throughout history, including Andrew Carnegie and Cornelius Vanderbilt, were also unpaid. Instead, they lived on investments and dividends from the business.
His real estate and his philanthropy
The same goes for Munger, who first made millions in real estate investments, including developing an upscale 22-acre beachfront community in Montecito. The homes sell for around $10 million to $20 million, according to CelebrityNetWorth.com, with a homeowners association (HOA) fee of $2,700.
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Munger is also recognized as a philanthropist. Some of his favorite donation recipients include colleges and universities like the University of Michigan, Stanford University, Pasadena Polytechnic, and University of California, Santa Barbara.
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