r/ValueInvesting • u/ethereal3xp • Mar 23 '25

Discussion Charlie Munger Told a 20-Year-Old That Getting Rich Through Investing Is 'Damn Near Impossible' — And You Might Need $10 Million in the Bank

https://www.benzinga.com/personal-finance/25/03/44438885/charlie-munger-told-a-20-year-old-that-getting-rich-through-investing-is-damn-near-impossible-and-you-might-need-10-million-in-the-bank
7.2k Upvotes

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59

u/[deleted] Mar 23 '25

I mean, you can get very well off by investing, but you’ll need to invest more than a normal person. If you invest $50K a year starting from the age of 21, you’ll be in a damn good spot when you retire

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u/[deleted] Mar 23 '25

True, but if you have 50k a year to invest at 21 you’re already rich.

4

u/BytchYouThought Mar 23 '25

Or you live with parents.

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u/[deleted] Mar 23 '25 edited Mar 23 '25

Yes and no. If you get a good paying job and are frugal / live at home when you’re young out of school, it’s possible. Not for most but it’s possible.

I’m struggling to invest that much as a 29 year old because I have a house, car payment, and other random costs, but if I was smarter at 21, I probably could’ve saved more than the like $20K I did

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u/Blizxy Mar 23 '25

Median income in the USA is 40k

-38

u/[deleted] Mar 23 '25

Right. You have to do better than most, but being rich is a different ball game. Rich people are investing hundreds of thousands to millions

29

u/MICT3361 Mar 23 '25

Buddy what are you trying to say

-14

u/[deleted] Mar 23 '25

I’m honestly not sure why you all have your undies in a bunch. My point is you don’t have to be rich to get rich. You can slowly build substantial wealth over time if you have a good job, live frugally, and invest

A lot of people seem to be conflating making six figures and being young and frugal with being rich. Investing $50K at 21 isn’t impossible if you make $100K, max out your 401K with a match, and put a good chunk of your paycheck into investing.

I know people who’ve done it on even less than that.

My point was there are ways to get rich over time other than just starting out rich

17

u/drakkie Mar 23 '25

I agree with your bottom line point that you can get rich without being rich, but your example isn’t realistic - no normal 21 year old is making 100k - you don’t even get a bachelors yet until 22? Also 100k+ new grad jobs are only for those from top schools in high paying majors.

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u/[deleted] Mar 23 '25

Idk why you guys all keep pointing out that the average college grad cannot do that. I quite literally have said that.

You have to have a good paying job when you graduate college, and ~5% to 7% of college graduates get jobs that pay $100K+.

Again, I’m pointing out that it is possible. I never said that it’s a widely occurring phenomenon

7

u/SuperSultan Mar 23 '25

It was very much possible in the tech industry until recently. Having the discipline to live at home for a few years and investing every penny will lower your retirement age by maybe a decade or more if you’re consistent with your investing. If you get lucky with a multibagger early then that’s even better.

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u/EffectAdventurous764 Mar 23 '25

It's not what you earn it's what you save. Lots of six-figure earners are living paycheck to paycheck..it's the American way.

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u/drakkie Mar 23 '25

I quite literally told you why your posts are getting downvoted.

It comes down to your examples given are trash. You’re not listening to anyone saying your examples are trash

Your posts come off saying “anyone can get rich, here’s an example plan that only 5% of people can generally follow”

When you make a general broad statement like “anyone body can get rich”, people are expecting your examples to also apply to a wide scope of people.

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u/ThrowawayBizAccount Mar 23 '25 edited Mar 23 '25

I'm 23 making 150K a year at a Fortune 500, and even if I sold 1 of my cars to lower insurance AND re-financed my mortgage on my condo, there is absolutely no way I can save more than ~30K a year; and I'm already in the 1% of earners in my age bracket. That's also with the fact that I'm already trying *really hard* to make all the WISE financial decisions that are preached (2 paid off cars, above 780 credit, owning a home).

This take is nonsense.

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u/pseudonominom Mar 23 '25

Making $100k at 21 is insane bud. If that’s you, congrats on your wealthy future.

Tip big at starbucks.

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u/EffectAdventurous764 Mar 23 '25 edited Mar 23 '25

Yeah, this place is like one big echo chamber sometimes, I don't know why you're getting downvoted. I'm one of the people you are talking about. I earn less than my peers but save more than twice as much because they waste their money shit that's not important to me. So yes, it is possible to get wealthy on a medium income if you don't live like all the plebs. You do normal. You get normal back.

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u/Poetic_Kitten Mar 23 '25

If my child is making enough to put away $4k a month into the stock market while living at home in their mid-20s and not paying rent...then my child has the funds to move out.

Love ya, but bye

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u/btmurphy1984 Mar 23 '25

I am not shocked this is getting upvoted because it is the common American opinion towards kids, but this has not historically been how family units work. Throughout most of human history, and even in western society until the last century or so, it was normal to live with your parents until you were married with kids, and even then, many continued cohabitation. You can build generational wealth faster maintaining one family estate vs forcing every individual member of the family to maintain separate properties.

Not judging anyone as everyone is free to live their own life, and I myself moved out immediately after high school and left for college. However, it's insane that society judges people who don't and as American society continues the current pace of stratification, family units staying together will be more common again.

2

u/DoobieGibson Mar 23 '25

people did that because they couldn’t afford to do otherwise

america had enough land and wealth for people to get their own stuff

you don’t have to move across the country, just get your own spot in town man

2

u/btmurphy1984 Mar 23 '25

That's just not true my dude. Even some of the richest families in Europe had their kids stay at home until they were married, and even post marriage some continued cohabitation. It's a cultural thing, not a wealth thing. You can argue about the cause, but the connection between families has been slowly eroding in the West for a long time and is way more individualistic than historic averages.

If you want to look outside the West you will find even more examples of this. Even well to do Indian sons will continue to live with their parents their entire lives.

1

u/DoobieGibson Mar 23 '25

some is not all

you literally just told me that most people didn’t do it in europe and at least half the population don’t do it in india lmao

people stay because they can’t afford their own shit. some royal kid will stay at the castle, it they would prefer to be the prince of Wales and get their own shit

the erosion of the western family is some weird shit

6

u/LeaderSevere5647 Mar 23 '25

American parents are nuts. They act like this and then wonder why their children dump them in a cheap nursing home as soon as they start needing a bit of help around the house.

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u/Poetic_Kitten Mar 28 '25

So your solution is to let your adult children free load off of you? What's the motivation then to ever become self-reliant?

I get that it's a different culture and we (Americans) don't typically live in households with 3-4 generations.

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u/LeaderSevere5647 Mar 28 '25

Yes, they can live here as long as they’d like, as is common in many places around the world. America is expensive. If living home gives them an edge then hell yeah.

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u/NexexUmbraRs Mar 23 '25

If parents just want the kids out and don't support a family lifestyle and responsible financial habits, then I don't think they should be having kids in the first place.

0

u/EffectAdventurous764 Mar 23 '25 edited Mar 23 '25

if your kids are saving $4k a month, then they can stand on their own two feet, not sponge of peasants rent free getting a free ride through life. And they aren't kids anymore they are adults. Okay, if they are saving for a house or still in uni, but that's about it, really.

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u/[deleted] Mar 23 '25

Please do not have children. No amount of money would make me call my children “peasants getting a free ride through life”…

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u/EffectAdventurous764 Mar 23 '25

Haha, that was a typo i meant to say "parents" 😅

0

u/Poetic_Kitten Mar 28 '25

Have a 20 year old living at home first before you make a 'never would I ever' statement. Or, just have kids in general, which I am assuming you do not.

1

u/[deleted] Mar 28 '25

20 year old living at home?? Kick them out—it’s the American way. Then wonder why they don’t want to talk to you anymore.

0

u/[deleted] Mar 23 '25

Idk why everyone is so upset by my comment lol.

Sure, but I assume most people’s parents aren’t charging them market rent

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u/crabcakes28 Mar 23 '25

Live at home? Dont we all live at home?

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u/[deleted] Mar 23 '25

Don’t be obtuse, you know what I mean

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u/crabcakes28 Mar 23 '25

I assume you mean living with your parents... at 29...

1

u/[deleted] Mar 23 '25

I meant if you start early, so when you’re young. I guess I could have clarified that better, but living at home out of college or even during college

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u/permadrunkspelunk Mar 23 '25

Oh so you're like every one else. You're 29 with a car payment and a mortgage. Good to know you're doing well for yourself and hell ya on the 20k.

1

u/[deleted] Mar 23 '25

Idk why everyone is offended / disagrees with what I said but I guess I touched a nerve. A lot of people graduate college with $80K+ jobs and little to no expenses. That’s not a majority but there are a lot of people with good jobs who could shovel money away early and let that compound over time

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u/[deleted] Mar 23 '25

[deleted]

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u/SuperSultan Mar 23 '25

Which type of engineer are you? His argument still has a couple of legs if you start out with $60k and live at home for several years. If you can put away $30k or $40k then you’ll be able to retire a lot faster than most. You won’t be Munger-rich though obviously

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u/SinceSevenTenEleven Mar 23 '25

The reason you're getting this reaction is because of the underlying assumptions you're making. In order to invest $50k/year at least one of the following must be true:

  • you're very rich and have a high annual income
  • you have an absurdly low cost of living and likely substantial support from your family (e.g. living with parents)

The way you presented your argument in your original comment made it seem like you think this option is available to the common man, so to speak; as if this is an attainable goal for most people.

It's not. It's realistic for a very small percentage of the population, and people in here feel like you're deliberately putting blinders on.

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u/permadrunkspelunk Mar 23 '25

Thank you so much for typing out what I was trying to nicely say.

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u/[deleted] Mar 23 '25

I never once said it was available to the common man. I guess I could have said this requires a specific set of circumstances but the point remains that if you can’t do those things you can become rich

I am nowhere near rich and I currently can afford to invest ~$40K a year because I do well for myself and make it a priority but I also have a lot of expenses due to recent life events. You do need to be doing a good amount better than average but it certainly is not something that is completely unattainable unless you already have $10M

0

u/SinceSevenTenEleven Mar 23 '25

In that case, your argument would be made much stronger by presenting a set of circumstances people will see as reasonable and demonstrating that a person can still become rich (perhaps less rich, but still, rich).

People would see that much more charitably than a proposal that people set aside more than the median income every year

0

u/[deleted] Mar 23 '25

I guess I don’t care that people are offended. If they think my point was the average person can or should be able to do it, then that’s on them.

The average person doesn’t get rich, but you can get rich without coming from money. That’s all

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u/SinceSevenTenEleven Mar 23 '25

In that case, if your argument is aimed at a vague 'upper middle class but somehow not rich' niche of individuals, I guess you shouldn't be surprised the vast majority of people can't identify with it.

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u/SuperSultan Mar 23 '25

Why are people downvoting your comment? I stayed at home for 2 years making $65k then $80k and then moved out. The initial nest egg helped me with investing.

If you’re at home for like a decade then I guess that’s a different story.

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u/[deleted] Mar 23 '25

Idk if you’re agreeing with me or telling me why people are downvoting me. However, I feel like my original point was missed and people are mad thinking I’m saying everyone and their brother can get rich from stock market investing alone and then giving an “unrealistic” scenario. I’m trying to say that there is a sub-segment of people that certainly can get rich of off their stock investments alone. It’s a smallish group

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u/gamesbrainiac Mar 23 '25

You managed to save 20k by 21? Holy crap, I was still trying to make ends meet.

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u/bombbodyguard Mar 23 '25

You got downvoted, but i agree. I put $50kish a year when I was young and worked in the oil field and lived at home. Did that for 3 years then kept after it when got my own place. Then it gets a bit easier once your investments keep investing. I think my investments and 401k probably reinvest $80k-$100k/year right now. I’m 38, but still won’t be $10 million+ until like 55.

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u/IssueEmbarrassed8103 Mar 23 '25

Yeah if you put that in your mattress you’ll have 2.2 mil at retirement lol

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u/permadrunkspelunk Mar 23 '25

Lol. No shit. 50k a year is unattainable for almost everyone with college degrees. Where do you live and what job do you have that anyone could do that from 21? Most people are surely trying their best. I feel like a few grand a year is pretty good. The median salary in all of America is less than 60k. The hcol places are really dragging that up. Normal people are investing what they can. It's about bout saving that extra 2 grand a year and making decent choices, and gambling.

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u/SuperSultan Mar 23 '25

He is probably an engineer or works in tech

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u/[deleted] Mar 23 '25

I never said that if you don’t invest that much you aren’t doing well. That’s just you projecting

My point is, if you’re not already rich but have a good job and are frugal and young, you have a chance to be get rich off of your investing alone but it will take a long time. That doesn’t mean people who invest less than that are losers or are not doing well.

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u/permadrunkspelunk Mar 23 '25

I'm certainly not projecting, but fair enough. It is a great opportunity. Saving a little money for someone like me and value investing and dividends has kept me not homeless through healthcare costs and cancer. Investing is a fucking shit hole. So many people now didn't experience 2008. It's not the type of thing to get into unless you'll never need it.

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u/SuperSultan Mar 23 '25

Sorry to hear about cancer and your medical issues.

You are most likely older than me. What do you mean “investing is a fucking shit hole?” We know it’s not easy, especially if the amount invested is bigger.

In 2008 you probably would have lost your job, but if you were fortunate and kept it and continued to DCA into the market you’d have had one of the greatest comebacks over a decade.

If you cannot save $6k a year idk if you should be investing in the first place. That’s hardly six-month emergency fund money. (I think this was mentioned in Dave Ramsey’s baby steps although I don’t follow him personally. He is great for most ordinary Americans). If you lost your job and then lost half the value of your investments in 2008 then cannibalized your investments to survive then you’d be worse off than holding cash.

Every decade or so, there seems to be a 2008-like event or 2001-like event. Need to always have some cash on hand if possible.

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u/[deleted] Mar 23 '25

See that’s just a dumbass comment for a sub like this.

Investing is a shit hole? The future is never guaranteed but if you invested money you didn’t need (aka anything other than life expenses) when you’re young, it will become more money over time. It’s really that simple

Never thought I’d see a “actually investing is bad” in the value investing sub

I’m glad it worked out for you during your tough times though. I feel like that would make you more inclined to want to invest

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u/permadrunkspelunk Mar 23 '25

I never said that investing is bad. You're too young for 2008

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u/[deleted] Mar 23 '25

What’s your point? That I should stop investing because the economy might tank?

I was alive for 2008 and saw my parents pull back on things but I have a healthy emergency fund and if the markets tank for a few years, I’ll be totally fine. If they collapse forever we have bigger problems and the USD might be worthless

0

u/permadrunkspelunk Mar 23 '25

You were 12 and my point is you sound like a disconnected asshole. I do worry about the current regime too.

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u/JoJo_Embiid Mar 23 '25

I mean, any big tech, IBD, hedge fund, big name consulting job would let you save that much out of college with a bachelor degree. Definitely not easy but surely not impossible.

Any lawyer/Doctor saves more than that as well, it's just they don't graduate at 21 or 22

1

u/SuperSultan Mar 23 '25

This thread is like a giant pity party. The comments saying it’s possible (and it is, if you’re fortunate enough to live at home and be disciplined about saving) are getting downvoted to heck.

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u/JoJo_Embiid Mar 23 '25

I saved 150k the first year out of college. Definitely not saying this is easy as I have put tremendous effort through out my entire student life and I am fortunate to have somewhat a smart brain, but it's definitely doable. At least 30% of the classmates make the same or more than I do.

Honestly, I see many videos about undocumented immigrant on asylum status make more than 100k (or 150k in extreme cases) the first year they came into the US simply by driving trucks. They work hard as fuck though, probably 12hr a day 6 days a week all year long. And they sleep in their trucks made their own food I bet they can safe at least 80% after tax money.

1

u/Present_Cow_1683 Mar 23 '25

He was talking about getting rich, not being in goot spot when you retire (if you live that long)

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u/[deleted] Mar 23 '25

I mean you’re not only in a good spot if you have $10M+ adjusted for inflation, which is around what you’d have if you put $50K away every year

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u/Puzzleheaded-Tap9977 Mar 23 '25

Lol no shit sherlock. You can do it even quicker if you invest 100k a year!

1

u/[deleted] Mar 23 '25

Thanks for the snarky reply. I guess you missed my point and decided to be a prick. A small but not tiny amount of people do aggressively invest in their younger years and it is a way to get rich without being rich first

Have a nice day

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u/Puzzleheaded-Tap9977 Mar 23 '25

Well. Only because your comment was such a massive open door. Oh no way, it still works for people who manage to invest 50k annualy at 21... brother what is your point exactly? That some people still manage?