Charlie Munger had this to say of get-rich gurus. Here's his advice to build wealth

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Warren Buffett’s longtime business partner, the late Charlie Munger, had a reputation for being curt when speaking with shareholders.

Whether he was talking about building wealth or expressing skepticism about cryptocurrency, Munger would often speak candidly.

During a 2019 Daily Journal shareholders meeting, Munger turned his attention toward the daytrading influencer market. In short, he wasn’t a fan of social media gurus teaching inexperienced investors how to trade stocks.

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“If you take the modern world where people are trying to teach you how to come in and trade actively in stocks, well, I regard that as roughly equivalent to trying to induce a bunch of young people to start off on heroin,” he said. “It is really stupid.”

Here’s why the legendary investor was “tired” of get-rich-quick gurus.

Financial misinformation

FInancial literacy remains a problem across the nation. According to a 2024 survey conducted by the Consumer Finance Institute (CFI) at the Federal Reserve Bank of Philadelphia, 28.5% of individuals who sought financial advice used social media to obtain it (1).

Munger thought it was silly “when you’re already rich to make your money by encouraging people to get rich by trading."

“There are [also] people on TV and they say ‘I have this book that will teach you how to make 300% a year and all you have to do is pay for shipping, he told shareholders. “They mislead you on purpose and I get tired of it. I don’t think it’s right that we deliberately mislead people as much as we do.”

Bad financial advice can have tangible consequences.

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Safeguard your investing strategies

There’s no shortage of financial advice being shared online. But while social media personalities champion investing trends like cryptocurrency or meme stocks, both Buffett and Munger have long championed the power of passive investing.

They’ve consistently argued that most investors would struggle to beat the market, making index funds a compelling choice for the average person. In fact, since its introduction, the S&P 500 has delivered an average annual return of over 10%, according to the Official Data Foundation.

And the best weapon you could have in your arsenal as a passive, low-risk investor is patience and time. By consistently investing small amounts over a long-term horizon, you can harness the power of compound interest.

Platforms like Acorns make this strategy effortlessly accessible, allowing you to invest spare change from everyday purchases. Acorns is an automated savings and investment app that rounds up your purchase to the nearest dollar and automatically invests it, letting you grow your wealth without even thinking about it.

Investing in small increments can help you save faster, without the mental load of allocating money for spending vs. investing.

Sign up now and for a limited time you'll get a $20 bonus investment to kickstart your portfolio.

Alternatives to stock markets

Diversifying your beyond stocks can significantly enhance its resilience and long-term growth potential.

A golden opportunity

Gold and silver offer a multifaceted approach to portfolio growth and stability. A gold IRA is one option for building up your retirement fund with an inflation-hedging asset.

Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.

With a minimum purchase of $10,000, Goldco offers will [match up to 10% of qualified purchases in free silver

If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today.

Real estate is rich with potential

Another popular alternative is real estate investing.

Real estate has long been considered a solid portfolio hedge, as rent and property values tend to increase with inflation. It’s no surprise that high-net-worth individuals see opportunity in this asset. Gone are the days when you needed to buy and manage the property yourself to invest in real estate.

With platforms like Arrived, for example, you can invest in shares of rental homes and vacation rentals without taking on the responsibilities of a homeowner or landlord — Arrived handles property management, tenant turnover and repairs.

Backed by world class investors like Jeff Bezos, Arrived makes it easy to fit rental properties into your investment portfolio regardless of your current income.

To get started: browse a curated selection of homes, each vetted for their appreciation and income potential. Once you find a property you like, you can choose the number of shares you want to buy and you can then start investing with just $100.

Accessible luxury asset

Fractional investing has permeated more than the stock and real estate markets — it has also opened up new avenues for investors to build wealth through art investing.

Fine art is one investment that consistently outperforms the stock market over the long term, making it an increasingly popular tangible asset. Some contemporary art has even outperformed the S&P 500 over the past few decades, delivering an annual return of 11.5% from 1995 to 2023, compared to the S&P 500’s 9.6% during the same period.

Masterworks makes it possible for every savvy investor to access an asset that has previously been limited to the ultra-wealthy. Instead of buying a single painting for millions of dollars, you can now invest in shares of individual works.

Simply browse their impressive portfolio of paintings and choose how many shares you’d like to buy. Masterworks will handle all the details, making high-end art investments both accessible and effortless.

Masterworks has distributed roughly $61 million back to investors. New offerings have sold out in minutes, but you can skip their waitlist here.

See important Regulation A disclosures at Masterworks.com/cd.

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Federal Reserve Bank of Philadelphi (1)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.