‘Having a Basic House Really Helps You’

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Before Charlie Munger passed away at 99 in 2023, he left behind more than legendary investment advice. He also left behind a modest home he lived in for seven decades—and a blunt message about why most people get it wrong when chasing “dream homes.”

“In practically every case, they make the person less happy, not happier,” Munger said in a 2023 interview with CNBC’s Becky Quick.

He wasn’t talking about starter homes. He meant the sprawling mansions, the luxury upgrades, the kind of houses people stretch their budgets for. According to Munger, “having a basic house really helps you. Having a really fancy house… doesn’t do you that much good.”

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Let that sink in—this came from a billionaire who absolutely could’ve afforded 10 Beverly Hills estates. But he chose to stay put in his Pasadena, California home. Same goes for longtime business partner, Warren Buffett, who’s lived in the same Omaha house since 1958. Price tag at the time? Just $31,500. Today, it’s estimated to be worth around $1.4 million—not that he cares.

Buffett once explained the logic in typical Buffett fashion at Berkshire Hathaway’s annual shareholder meeting back in 1998: “We can either buy a house, which will use up all my capital… or you can let me work on this.” His wife agreed. They waited four years after marrying before buying a home, once the down payment was just 10% of his net worth. He believed he could turn that $31,500 into $1 million in about 12 years if he invested instead. And he did.

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Munger didn’t just think big homes were a financial trap—they were a happiness trap. “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 said.

Munger spent much of his life talking about sanity, not just wealth. “It’s not staying rich that’s difficult,” he said. “It’s staying sane.” His advice for that? Avoid traps. The kind that come with status chasing, big spending, and thinking more square footage equals more fulfillment.