Munger and Thoreau: The Compounding Power of Not Needing Much

Compounding interest is powerful, if only we don't get in the way by drawing down too soon instead of letting time do its slow, quiet work. Charlie Munger, in his typically spare way, put it like this:
"The first rule of compounding is to never interrupt it unnecessarily."
– Charlie Munger
That sounds simple enough. But practicing it over decades is something else.
It asks for discipline and also something softer: a kind of contentment. Many of the investors I most admire, Munger among them, lived relatively modestly, even though they could afford opulence.
Walter Schloss, for instance, famously ran his investment operation from a one-room office, kept overhead low, and didn’t need a high-flying lifestyle to stay motivated. He took the subway.
Charlie Munger drove an old Toyota Camry until he was 90. He later said it never occurred to him to try to look rich before he was rich, and even then, he didn’t change much.
“Frugality has gotten a bad name, but I think frugality is an enormous virtue”
– Charlie Munger
Warren Buffett, the most famous of the bunch, still lives in the Omaha house he bought in 1958. He eats McDonald’s and once joked that his idea of a wild night was a Cherry Coke and a good book.
By not needing much, these oracles of finance could keep more invested. And what stayed invested kept growing. As they got wealthier, what started out as a practical habit simply became a lifestyle that suited them.
"That man is richest whose pleasures are cheapest."
– Henry David Thoreau
There is wealth in buying time, in letting compounding do its thing uninterrupted. But there is also a quieter wealth, in knowing we don’t need to spend to feel rich.
For more reflections on timeless insights from the oracles of finance, visit www.mydailyoracle.com for anything you may have missed, and watch for the next post in your inbox.
To explore this mindset further, Charlie Munger’s wisdom is on full display in Poor Charlie’s Almanack, a collection of his thinking, lectures, and irreverent observations over a long and unusually thoughtful life.
Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Please consult a qualified financial advisor before making any investment decisions. Links on this page may be affiliate links, meaning your purchases help support this newsletter. Copyright © 2025 mydailyoracle.com. All rights reserved.
No spam, no sharing to third party. Only you and me.