Charlie Munger Uses this Investing Checklist

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Wanna know what separates great investors from mediocre ones?

Their investing checklist.

Charlie Munger uses one... and so should you.

Here are the 7 questions you need to ask yourself before making any investment decision:

(These have saved me thousands of dollars.)

𝟭) 𝗛𝗼𝘄 𝗱𝗼𝗲𝘀 𝗶𝘁 𝗳𝗶𝘁 𝗶𝗻𝘁𝗼 𝗺𝘆 𝗰𝘂𝗿𝗿𝗲𝗻𝘁 𝗽𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼?

Always keep your portfolio in alignment with the overall long-term strategy.

Make sure to rebalance when necessary.

𝟮) 𝗪𝗵𝗮𝘁 𝗮𝗿𝗲 𝗺𝘆 𝗴𝗼𝗮𝗹𝘀?

It almost goes without saying… but always know how each investment plays into your long-term goals.

Even if the goal is to make short-term returns, it’s best to know it up front.

𝟯) 𝗪𝗵𝗮𝘁’𝘀 𝘁𝗵𝗲 𝗹𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆?

Most of the time, you want to have quick access to your money, especially when you’re in a pinch.

Know how quick you can get your money out in less than ideal situations.

𝟰) 𝗪𝗵𝗮𝘁 𝗮𝗿𝗲 𝘁𝗵𝗲 𝗳𝗲𝗲𝘀 𝗮𝗻𝗱 𝗰𝗼𝘀𝘁𝘀?

Always know what your all-in costs are and find out if there’s any front-load fees, ongoing fees, and selling fees.

Besides investment loss, fees are one of the biggest drags on portfolios.

𝟱) 𝗪𝗵𝗮𝘁’𝘀 𝘁𝗵𝗲 𝘁𝗮𝘅 𝗶𝗺𝗽𝗮𝗰𝘁?

Always determine what the tax implications will be, the “hidden” fees to investing.

Sometimes the cost of taxes isn’t worth buying in to the investment in the first place.

𝟲) 𝗪𝗵𝗮𝘁’𝘀 𝗠𝗬 𝗿𝗲𝘀𝗲𝗮𝗿𝗰𝗵?

Not the news, not what you read in headlines. Always do your own research and come to your own conclusions.

𝟳) 𝗪𝗵𝗮𝘁’𝘀 𝘁𝗵𝗲 𝗲𝘅𝗶𝘁 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆?

Know your intentions for the investment. Have a clear plan for selling or holding the investment over time.

And there you have it!

A 7 question checklist to go over before making any investment decision.

Thanks for reading.

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