A Charlie Munger Masterclass

Jason · 00:00Welcome to episode 144 of The Numbers Game. I'm Jase and I'm joined with Nick and Marty. How are we going, fellas?

Marty · 00:07Going well, thanks, Jase. I've cancelled all Christmas parties. I'm just at it working. All the business owners are on the ground. They're stepping up leading into 2024. Everyone's hitting the streets, doing it tough, but doing it well. So good to see. Good buoyancy. So I'm well.

Marty · 00:24Nick, how are you?

Nick · 00:25Mate, I'm good. Just saying no left, right and center. No, no, can't make it. Can't make it. I'm thinking about Jase every time I say it. Jase, how are you going? Any nos being dished out?

Jason · 00:35No, it feels like for every no you dish out, I must be next on their list of people to invite to events and functions. They're just coming at me from all angles. And, you know, some— I've doubled up on a couple where I've had to leave one halfway through to attend another. So just getting it all out of my system in 2023. So 2024 is going to be the year of no.

Nick · 00:53But if you're, if you're leaving halfway through to attend another, that's an illness. We actually, we need an intervention.

Jason · 01:00I've got a problem. We need an intervention. I mean, next year I've signed up to 3 marathons to try and get me to like focus on something different.

Nick · 01:08So same day or—

Jason · 01:10well, actually, yeah, no, I've split them up a little bit and I actually blame Greg for that because Greg was like, hey, do you want to do another marathon? And I keep saying yes. So actually it's still the same problem. I've just got to, just got to find a way to say no, whether it's a marathon invite or a party invite.

Jason · 01:25So, oh God, well, you know, we're actually going to have to work out in the next couple of episodes, we need to bring in our predictions for the following year and we'll have to recap what our predictions were from earlier this year. I think, I think you might have thought Elon would be in jail and I thought the Bombers were going to win a final.

Nick · 01:46So yeah.

Jason · 01:47Yeah, safe to say there's a few predictions that haven't gone our way this year.

Marty · 01:50You were right on AI though, Jase, that you made a big call on AI. I think you probably got it right.

Jason · 01:57It's been a year on. I did say that AI was going to be a lot of noise around AI in 2023. And look, to be honest, I don't think it's even started yet. I think there's been a bit of a lull even, that AI was hot and loud and maybe it's kind of bubbling back down a little bit at the moment.

Jason · 02:13And I think it's going to go go big and hard again in the near future.

Marty · 02:17Jeez, I love it when you talk like that, mate. Even with AI, Charlie was actually posting some things on eBay. He's trying to sell stuff, but they now have AI on the descriptions to upgrade your listing.

Marty · 02:34So Charlie goes, this is great. I could write 4 things about the product and it'll give me an outstanding listing that's very relevant. 'Cause I was watching it 'cause I thought, what's he putting in compared to what's being spit out here? But it was actually fantastic. So talk about efficiencies.

Marty · 02:51Kids of today going into adults into the future are gonna have a whole different concept of what business is in regards to using AI and efficiencies with it. So I thought that was pretty remarkable.

Jason · 03:04Well, speaking of AI, and I don't want to go too early 'cause it's in the works and being developed at the moment, but Dashboard Insights is incorporating some pretty fancy AI into their tech. And as our amazing show sponsor, always kind of mention them up front for the start of an episode. So once again, I'm sure you'll, you know, you're probably not even sick of hearing about it because it's actually a really interesting tech program and software for business owners to get access to their data and run high-performing businesses.

Jason · 03:30But AI will be built into the backend, help you increase your efficiency, reduce costs, and improve productivity, profits, and cash flow. So if you haven't checked it out, Dashboard Insights, and go and say g'day to the team. Say hi to Ryan and book yourself a demo to see what it's all about.

Jason · 03:47On today's episode, Marty, you are due to bring us some wisdom, some nuggets of gold, and you've never failed to deliver. So I'm very interested to see what you've got for Nick and I today.

Marty · 03:59Well, you know, when challenging times are afoot, I always like to go to someone positive, someone that's practical, that could deal with reality effectively. That person for me is Charlie Munger, who is Warren Buffett's right-hand man and mentor.

Marty · 04:15And he just always gives some great insights when you need it most. And probably my background in being interested in Charlie Munger was probably being a bit more loose in my late 20s and early 30s in wanting to do the next best thing as quickly as possible.

Marty · 04:30And some people might do some bad things in their youth and turn to religion, right, instead of going to jail. I wasn't at that point, but I thought he was someone that I could always come back to with practicality, that when my mind goes wandering off into a thousand different ideas, it'll bring me back to the one that actually counts.

Marty · 04:50So I thought what I'd do today is I was reading a book called The Tao of, um, The Tao of Charlie Munger, I should say, and, um, and also listening to a few podcasts, and I wanted to take a few of those concepts out. 9 of those concepts and quote and just apply it to everyday life and getting the feedback of your good selves as well, Jason, Nick.

Marty · 05:13And yeah, and I think it'll be relevant to the audience given some of the challenges we're going through. So I'll start with number 1, and this shifted my perspective on things, but the quote is, "It's the strong swimmers who drown." And I just When I read that, I thought, what does he mean by that?

Marty · 05:34The strong swimmers that drown. And it's just purely being overconfident. And when you're, when you're doing well in business, you just get overconfident. You want to take on the next thing, you want to spend on the next investment. And it's those good swimmers that probably go into uncharted territory that, um, that get into trouble.

Marty · 05:54You know, they're faced with circumstances that come up and all of a sudden they're in strife. Whereas someone that can swim but is not a great swimmer will probably stay just that bit closer to the shore and make sure that they're playing in safer grounds. So he goes, a lot of the times those people that are innovative out there in businesses and are going, you know, to great heights to create something, some win, some win big.

Marty · 06:18But what you forget about is often how many people have drowned along the way trying to get to where that one person who one got to. So I thought that was interesting, good shift of perspective. I think you need to reach out and to strive, but how far, right?

Marty · 06:33So thoughts, what do you think, guys?

Nick · 06:36I can relate because, um, you know, from a business that's had a lot of growth, and I think you need to just check back in at times like this and make sure that you're, you know, to your point, staying in the shallow end, or, um, you know, maybe staying, staying where, where, where you You know, you can, you can save yourself.

Nick · 06:52The ship starts to go down. So yeah, I think it's, it's strong advice for sure.

Jason · 06:58Yeah. And I'd agree. I think that, that, you know, strong swimmers, it's the strong swimmers who drown. Overconfidence can kill you. In that sentence, I see in here, and from experience, I've seen business owners who have jumped into a totally different segment, a different category, bought a business in an area that they're not familiar with, and they've gone, well, if I can run that business over there, there's no reason why I can't apply that over here.

Jason · 07:18And sometimes it doesn't translate and it doesn't kind of get copied across. And, you know, overconfidence can end up being a downfall.

Marty · 07:27And that's what Charlie Munger and Warren Buffett were saying about the internet boom in 2000. Like, everyone was jumping in trying to make a quick buck. It's the same with crypto. They just stayed away from that. They looked at the good businesses that'll be there for the next 10, 15, 20 years and made sure they got them at a good price rather than trying to They said, if it comes off, great, but we don't want to burn our money that way.

Marty · 07:50So that was just interesting thought process. Number 2, those who will not face improvements because there are changes to be made will face changes that are not improvements. And I think that's a bit more of a stock standard one in that if you're not willing to change habits in real time, you might find that things are changing around you and you might not like some of those changes if you're not adapting in real

Marty · 08:20time. And I take that in the context of the book, he was basically saying you've always got to be relevant in the game that you're playing. You're in your core competencies, but you got to be relevant and nimble. And that's why they don't like to do strategic forecasting because they're going, if you're focusing on a forecast, which I thought was fascinating actually, they're saying you could be missing what's going on right here because you're so concentrating on what you want to accomplish on the forecast.

Marty · 08:50So they said, we'd rather be nimble where we're at, make the great decisions where we're at in our core competencies, and that's how we're always going to get the best result to continue to involve our investments and businesses. So Yeah, I thought that was interesting.

Marty · 09:06So yeah, you've got to be willing to make those changes in real time. And I'm sure you can all relate to that in our businesses that, yeah, that you've had to make nimble adjustments given circumstances can change pretty quickly. Jase?

Jason · 09:22Yeah, definitely. Look, business and even personally, I think about changing habits and good habits and bad habits. And as much as we joke about me saying yes to everything, that is definitely a habit that I need to change, I need to improve in that area. And if I don't, I'm gonna break, I'm gonna burn out, I'm gonna end up hating and not being comfortable and happy and proud of the life and business that I've created 'cause it's my choice.

Jason · 09:45It's my choice to say yes to things. It was my choice to grow the business to the size it is today. But if I keep on going about bad habits without making changes and improving, I'm not gonna be around to enjoy it.

Marty · 09:58That's a great point. That's exactly what he talks about actually, Jase. He says, You've got to make those little changes in real time. You could read all the books in the world, listen to all the podcasts in the world, but if you're not making those subtle changes, um, you're really not evolving.

Marty · 10:13So he likes to keep it very nimble as to what's happening in your life now and using your own intelligence and awareness to improve. And he goes, everyone makes mistakes. He goes, if you're not making mistakes, you're in total inactivity and you're not learning anything.

Marty · 10:29He said it's a part of life. He said the real crux to living is not making those same mistakes again and really learning from them and not going into places where you could die. So it's good that you bring that up.

Jason · 10:45Like 161. Carry on.

Marty · 10:50I'll go to number 3. It's pretty generic, but I liked it. Whenever you think something or some person is ruining your life, It's you. A victimization mentality is so debilitating, and that is so true a statement.

Marty · 11:07If ever I find myself— and this has been really good— if ever I find myself bitching or whinging about something, I always come back to going, it's me, it's me. And that just shifts your mentality straight away to something more productive, because if you have to send everyone else to the psychologist, for your life to be better, it's just not going to work.

Marty · 11:28So I really like that one.

Nick · 11:30Nick, I think particularly now, I think there's no, um, it's, it's, it's never been more prevalent that is than it is now. There's so many things going on externally to us, um, and whether it's inside of our business life or personal that we can't control at the moment.

Nick · 11:46Um, so it's very easy to be a victim in, in, in today's society compared to maybe, you know, 10, 20 years ago. And I think a lot of people just, just take that, that easy road and say I'm the victim. But I agree with you, mate. If you, you know, even if there is a level of, um, even if you are a victim to some degree, if you just have the mindset that you're not, you'll make the changes that you need to change, um, you'll make the changes that you need to make.

Nick · 12:14And I think it's important to mention that because of course at times you might be the victim or you might have, um, you might be on, you know, the, the wrong end of the stick, so to speak, but what are you doing about it? You can't control what other people are doing. You can only control what you're doing.

Nick · 12:29So even if you are a victim, what are you doing about changing that? You know, I think that's important as well.

Marty · 12:34Yeah, and even in this market, like you say, I've had a couple of people talk about the market and it is what it is. But like I've said to a few of the younger people in the office, keep contributing, keep adding value. Yeah, control what you can control and don't get complacent on what everyone else is doing in the market or talking about.

Marty · 12:52At least you can control that and get the best out of that market regardless. So don't be the victim to it. That's, uh, that is really debilitating. Um, I really like number 4, and, uh, I'm sure you'll resonate with this, and as our audience will.

Marty · 13:08Some people seem to think there's no trouble just because it hasn't happened yet. If you jump out of the window at the 42nd floor and you're still doing fine, as you pass the 27th floor, that doesn't mean you don't have a serious problem.

Marty · 13:23I would want to address the problem right now. So to me, that comes back down to trends. When you can elicit a trend in a market and you need to make adjustments, you make it from when you acknowledge that there's a problem there and something has shifted.

Marty · 13:39And that could be on the upward side too. You know, you could, you could ride that upside. As well when you acknowledge that it's there. But I think that's great. So often, and this is like even changing people's budgets at home, how many people are going, I still want to buy the coffee, or I still want to go out for dinner even though I can't afford it.

Marty · 13:59I probably have to sell one of the cars. You know, it's like, you know, don't be caught on the back end of a serious problem when you can make adjustments to rectify right now, even if you don't like what you have to do necessarily, but do it because you'll save yourself from a serious fall.

Marty · 14:17I think that is really relevant in this market. Any comments and feedback on that one?

Nick · 14:25How many people would know there's problems brewing but wouldn't do anything about it in business and personal? So can definitely relate to that. I like the example. I really like the example. I think it's extreme, but I like the example.

Jason · 14:42It definitely is extreme, but I think about like a stock that I've bought and as I've seen it going down and down and down, I've gone, oh, I'll just ride it out. But if I'd sold halfway down, maybe I wouldn't have incurred the entire loss where the stock, I think one of them, I don't even know what it was. I thought it was going to be the next bloody A2 Milk and put some money into, I think it was, it's now called Halo Foods.

Jason · 15:02It was ketone dairy and you know, the news was bad and it kept coming out and the stock price kept going down and there was thousands gone. But instead of recouping $1,000 at the end, I just waited for the whole thing to be wiped off the market and sat there going, oh, maybe I should have taken action a little while ago when I saw the writing on the wall.

Jason · 15:19So yeah, perfect, perfect sentence. Extreme, extreme version of it, but I like it. You remember that stuff.

Marty · 15:25How many people invested off the back of a couple of great years, you know, going back in business? We did it. Yeah, everyone does it. And then the trend turns in the market, if you don't make those adjustments to make sure the business is okay, you could come crashing down.

Marty · 15:41Like if you don't pick that up early enough and you just think you'll ride it out, you could be gone. And that's why I like the impact of that statement is like you don't want to hit the ground, even when you're going past the 27th floor. Pretty cool. Number 5, I like.

Marty · 15:57Obviously like them all because I picked 9 of them. But you don't have to be brilliant. You only have to be a little wiser than other people on average for a long, long time. Always like that, just a little point of difference that you put out there in your life and the market.

Marty · 16:17It's like you say, a 20-minute walk every day makes an impact. It doesn't have to be a half marathon every day, but they're the sort of things that you know, can make a big difference. And there's this great little scenario he talks about where the teacher asked the grade 4 kids, if you have 9 sheep and one of the sheep jump over the fence, how many sheep are you left with?

Marty · 16:41Now, pretty much all the class got it right, you know, except for one person, Tommy, you know. And Tommy, Tommy didn't get it right. And the teacher goes, Tommy, you don't understand basic maths. And Tommy being a farmer's boy said to the teacher, "Miss, you don't understand sheep." And if one jumps, they all go, right?

Marty · 17:06It's follow the leader. And it's like, I love that in regards to having specialized knowledge in a context where they know something that a lot of other investors know but don't actually execute, or some of them don't know.

Marty · 17:23It just takes a little bit of wisdom. Doesn't have to take a lot to get a big difference out of life and in business as well.

Jason · 17:31I like that a lot. And I read another quote from Charlie, which is similar to that about being wiser than other people. And it's about the, over a longer period of time. And he said that he constantly sees people rise in life who are not the smartest and maybe sometimes not the most diligent, but they are learning machines.

Jason · 17:49They go to bed every night a little bit wiser than what they were when they woke up that morning. And he goes, it may not seem like a lot, but boy does it help, particularly over a long period of time. So it's all about those little 1%ers every day. If you're picking up a little bit of knowledge or doing the 1%ers, maybe the extra 5,000 steps, the extra 20-minute walk, the extra podcast, the extra book or a couple of pages, but you— but other people aren't doing that and you are.

Jason · 18:16You're gonna continue just to peg ahead bit by bit. So on average, over a long period of time, you can make a big difference.

Marty · 18:23Yeah, someone said to me, life's all about the expansion of your awareness. You know, you don't know what you don't know, but if you learn something every day, you get a bit further. And it's so true, so true. Number 6, the desire to get rich fast is pretty dangerous.

Marty · 18:39And I think that links back to the, You know, the strong swimmers drown. It's like, how many people want to hit the jackpot within 12 months? And we all go searching that. That's why we buy lotto tickets even though we have businesses. It's, everyone wants to do it yesterday.

Marty · 18:56And, you know, patience with the right strategy over a long period of time wins. And they know that it wins. And it's like, and we actually know that it wins, but how human behavior, right? It's just we want it now and what will we do to get that now?

Marty · 19:15And that's how people burn themselves. So it's, yeah, it's a fascinating one.

Jason · 19:20I'll follow that up with the one other one that I did look up while I was looking at your episode notes because it was really, I love it. And yours was the desire to get rich fast is pretty dangerous. And another one is the big money is not in the buying and selling, but in the waiting. Yeah, you know, it's time in the market, time waiting, time letting that investment grow.

Jason · 19:40Too many people, they look for the quick win, they get trigger happy, they buy and sell, you know, and they cash out the smaller gain, not riding out the bigger picture over that longer period of time. So, you know, and I think the one thing that they've done well at Berkshire Hathaway is, you know, time in the market, you know, and their investment strategy.

Jason · 20:00They're not looking for the quick wins, get in, get out. They are looking for you know, great companies building exceptional value over a long period of time to get returns for their investors. So yeah, love it.

Marty · 20:14Well, you tap into number 7 and 8, which is kind of combined, but that's Munger's greatest lesson to Warren Buffett was it's better to buy a great company at a fair price than an average company at a great price. Because Buffett's methodology was to find, you know, okay companies that were undervalued, but once they reached intrinsic value, they were still vulnerable companies.

Marty · 20:41So he generally would have to sell those companies then and retain the profits. So whereas Munger said, don't worry about that, buy them, you know, buy great companies that are going to be around for 30 years that you never have to sell. At a fair price.

Marty · 20:57So when the market goes down, you know, buy them at a reasonable price and just hang on and let them do the work for you. And that was the shift in methodology that Buffett had learned from Graham, where he would find, you know, more vulnerable companies which he could make money on quickly and effectively, but then he'd have to offload them once he got the value out of those companies.

Marty · 21:20So they just used that same methodology of finding value, but with those great companies that were just going to create 20% growth every year, 20%, 30% every year consistently that they would never sell. So it's, yeah, very clever.

Marty · 21:35And it links into number 8, which I really love this. And this is again that patience game you were talking about, Jase.

Jason · 21:43Yeah.

Marty · 21:44If you're going to buy something which compounds for 30 years at 15% per annum, and you pay 35% tax at the very end of that investment after 30 years, the way it works out that after taxes you keep 13.3% per annum based on that methodology.

Marty · 22:05In contrast, if you bought the same investment but had to pay taxes every year of 35% out of the 15% you earned, then your return, your return would only be 9.75% each year compounded.

Marty · 22:23So the difference there is 3.5% in the two different strategies. And what 3.5% does to the numbers over a long holding period, like 30 years, is truly eye-opening.

Marty · 22:39And so of course I've read that. So of course I had to go and do the numbers on that.

Jason · 22:44Wouldn't be the numbers game without Marty throwing some numbers in. I love it.

Nick · 22:47Correct.

Marty · 22:47Well, I thought, you know, it seems like such a small difference right on the surface, but then I go, all right, if you put $100,000 in at 13.3% compounding growth over 30 years, that would equate to $5,288,135. Now, if you put that $100,000 and compounded it at 9.75% over 30 years, it would equate to 1,841,529.

Marty · 23:14So it's nearly 3 times the value of being able to have that buy and hold strategy rather than making that win whenever the stock hit that value price they thought was fair and sell out of it and go into another stock.

Marty · 23:33And not to mention, you got to think about the overactivity of paying fees on those transactions. As well. So that would obviously, you know, that would eat into that profit as well.

Jason · 23:44There's nothing better than looking at $5.3 mil versus $1.8 mil.

Marty · 23:50But who's got that patience?

Jason · 23:51That's that beauty of, you know, when if you were just to end that with going, oh, it's a 3.5% difference in your investment per year.

Marty · 23:57Cool.

Jason · 23:58But when it's a multi-million dollar difference in your wealth over 30 years, that's when you know, like, these are the kind of lessons that you've got to be able to take on board and focus on and find a way to incorporate a bit of this into your life.

Nick · 24:12It's so hard to stick to it though.

Marty · 24:14Yeah, that's the thing, Nick, isn't it? It's human behavior. We all want to get, yeah, everyone wants to get rich quick, right? It's just the human behavior of wanting something now as opposed to having a simple, effective strategy that works for the long term that you apply.

Marty · 24:30And I thought, yeah, it's a Great lesson. And you know, the $100 grand sum I did strategically that people, you know, can find $100 grand, right? And that's a pretty big upside if it's used effectively. And that's why Berkshire doesn't pay out dividends because they don't want people to be taxed.

Marty · 24:48They reinvest it in their own fund. And that's why a lot of high net value investors go into Berkshire because they're not paying those transactional costs as well. Not to say that that's the best investment out there, but that's how they do it in order to making sure they absorb those fees ultimately.

Marty · 25:08Number 9, I really like this one. "Show me the incentive and I will show you the outcome." And I thought this was a really important quote. And I remember reading this probably about 5 years ago.

Marty · 25:25And it's very important to align management goals with employee incentives. I think that's really like a lot of times management will have goals and employees will have their own incentives. And if both don't know what the other's doing, then it could be misaligned.

Marty · 25:42So the importance of alignment. And I use this methodology, I was consulting to an air conditioning firm back in 2018 and just ran through this methodology with the business owner. They would do 1 to 1.5 jobs a day usually, and the crew would get paid by the hour.

Marty · 26:01And the business owner certainly thought the team could do more than 1.5 jobs a day. Usually each job took about 5 or 6 hours, but he just didn't know how to get more out of his team. So we worked out that We adjusted the incentive to have a job no more than a 4-hour timeframe.

Marty · 26:23And if the job was finished prior to the 4 hours, then that time was the employee's because he worked out that they were motivated by getting time back in their day. So, when he sort of surveyed each of the team members, it was only a small team, only a team of 4 people.

Marty · 26:44Plus the actual owner. So the incentive, so what happened was, what ended up happening was in the end, each job only took 2 to 3 hours that instead of what was taking 5 or 6, right?

Marty · 27:00So now if they finish the 2 or 3-hour job, they could move on to the next job in the day. And then if they finish that in 2 or 3 hours' time, then they could take the rest of the day off. As well. So if they could do 2 jobs a day, he would give them the Friday afternoon off.

Marty · 27:17So they'd only get 1 job on the Friday. So it really was quite fascinating that all of a sudden they found efficiencies, you know, in their own team to be able to deliver at a whole different standard because of the benefit of getting time back in their day where they could leave early if they did a good job.

Marty · 27:37And then also they get the Friday afternoon off. Now, it was also on the proviso that they would get incentives if they got a 9, a score out of 9 out of 10, plus 9 out of 10 at least on reviews from the client and on the workmanship of the job.

Marty · 27:57So the MD would actually overlook at the end of the job and see the quality of what they've done, and he would score it out of 10. So they'd have to get a 9 out of 10 to be paid incentives, and they'd also have to get a 9 out of 10 as feedback from the client as well on the job that was being done.

Marty · 28:15So there was still a quality metric around the incentive and the fact that they were utilizing less time to get the job done, the quality couldn't fall away. So that was really, really important as well. So, but talk about team spirit and efficiencies.

Marty · 28:30And people wanted to step up, he said it's quite remarkable the difference. And on the old model, they were completing about 5 installs per week at $8,000 per install, which was probably $40,000 of revenue per week.

Marty · 28:49And over 48 weeks, they were turning over $1.9 million per annum. So I say 48 weeks because they were taking holidays over Christmas. Now, once the new incentive were brought in, they were completing 9 installs per week at $8,000 on average per job.

Marty · 29:05So this is ducted air conditioning, split systems. So yeah, they generally worked out anywhere between, you know, sort of $5,000 to $13,000, but the average was about $8,000 per job. So over 42 weeks, it was $72,000 a week.

Marty · 29:21Their revenue went up to $3,456,000 per annum. So there was a $1.5 million upside in regards to the new revenues that were created in this small business. Unbelievable.

Marty · 29:37Now he did pay out an additional $100,000 of incentives to the boys for the quality work and the result and the client feedback was high. But what was interesting is in the second half of the year that they'd brought these incentives in, 88% of the work that they did was all valued at 9 out of 10, 9 and above out of 10.

Marty · 30:02So it was quite remarkable how the quality, and before that, he would have said, the managing director would have said, I reckon they would have been around 70%. So there was a massive upswing. And what did you think that that did to the business.

Marty · 30:17They obviously won more business because of word of mouth, was because the job was so good and the boys were really great at what they did. And it also meant they were so busy, they could up their pricing. So it gave him an option to be able to generate more revenue off the jobs that were being done because he had great reviews on social media as well as internally word of mouth.

Marty · 30:44But also gave him the opportunity to run another team if he wanted to. Now, he didn't want to. He was really happy with that level of turnover for a small business, like delighted. So he just loved it as it was.

Marty · 30:59So the only thing he had to be concerned about was maybe having another person in the wings to bring in if someone left. But everyone was happy. Everyone was getting paid more. They were getting Friday arvos off. They were knocking off at 3:30. They wanted to start earlier in the day because they were excited to do the job and get out of there.

Marty · 31:19So yeah, I just thought it's amazing how when you can align those incentives with your team into management, what impact that can actually have on the bottom line as well. So show me the incentive and I'll show you the opportunity.

Marty · 31:37Yeah, so sorry to ramble on, it was a bit of a story there, but I thought it was just super valuable.

Jason · 31:42That's super valuable.

Marty · 31:43A great insight how you can move the needle with a few key strategy pieces.

Nick · 31:49It's incredible, and to think you've got a live example is just unbelievable. It's got my mind ticking about our own business. And I think it also demonstrates the value of time over money. And I think about, particularly with younger people now, how much they value their time.

Nick · 32:07You know, we've talked about working from home and flexibility. You know, here's a way to get more, you know, to get more of that one thing you can't buy, as Warren Buffett is famous for saying, which is time. Get more time back. I love it, but you would never think it would have that kind of impact and outcome.

Nick · 32:26So that's just amazing.

Marty · 32:28So I think it was earned time.

Nick · 32:30Well, anyone that's got a similar business to that and where it's all about getting jobs done and quotas and time, geez, I'd be thinking about putting something inside my business like that in the next week.

Marty · 32:42Yeah.

Jason · 32:43Yeah.

Marty · 32:43Well, we have a lot of manufacturing businesses and, you know, product-based businesses that listen to The Numbers Game. So I thought that would be a really cool story to share off something I've seen, you know, in real time. So Yeah, I think we can all think about that in different ways in our businesses, but I think it's important.

Marty · 33:03What is the driver of the team and how does that align to what we want to accomplish as a group?

Jason · 33:09Absolutely love that. Resonates hard. And starting to get more clients reach out to us and say, how do we structure an employee incentive program? Or what kind of rewards and bonuses? How do you structure it to drive the team? And that summary there is a perfect way of kind of showcasing how to align business goals with employees to keep them incentivized and motivated.

Jason · 33:31You know, in all the talk about, you know, work from home and 4-day work weeks and all the things that are the trends in the news or whatever, this is just a really good business example of what it means to be productive and drive great results that everybody gets a win.

Jason · 33:48You've got customers having great, clean, beautiful installations and good jobs. You've got employees motivated to get to work, have a good time at work, deliver quality work and then go home and enjoy your Friday arvo, also then get a bonus and basically a performance bonus for kicking ass and getting lots of work done, then you've got a profitable business that has more profit, paying more taxes, you know, contributing to the economy.

Jason · 34:12And, you know, it's win-win-wins for everyone. Love it.

Marty · 34:16I think the thing for me too was just, and what the director said, was just how the team, because they were being, I guess, graded on the team result, how much more efficiently they worked together and how good morale was within the business.

Marty · 34:32And if someone fell out of that, they would almost self-regulate because they were all on the line in regards to the result and the quality of the result. So it really made them better teammates and a better team as such in what they were doing.

Marty · 34:48So even the director was saying he was very surprised at the difference in just morale, attitude, enthusiasm, and actual efficiencies, work efficiencies that they had found quite naturally based on the incentive, the overall quality and financial incentive.

Marty · 35:05So that was a real, yeah, it was a real eye-opener.

Jason · 35:09Absolutely love it. Mate, Marty, anytime you bring Charlie Munger and Warren Buffett to the table, I think we all come out of these episodes smarter than we were at the start, which ties in beautifully to Charlie's lessons on learning. So thank you for sharing, Marty.

Jason · 35:26I think, you know, anytime we're just going to have to— I think we might have to create a segment in a regular, you know, every season we need an episode like this where you just deliver absolute gold. I know Nick and I look forward to it, as do our Numbers Game listeners. So let us know what was your favorite of the 9 quotes or lessons from Charlie.

Jason · 35:46And Marty, was your young man called Charlie after Charlie Munger?

Marty · 35:50He was named Charlie out of Charlie and the Chocolate Factory, but Berkshire Hathaway was a textiles company. So, you know, the link is kind of there, but no, he was definitely after Charlie and the Chocolate Factory.

Jason · 36:05Beautiful. Well, as always, appreciate your support, as does Future Advisory and Innovate, who are obviously still highly involved in supporting The Numbers Game. And as well as another thank you to Dashboard Insights, who I'm sure they'll share this around to their teams and their users because, mate, it's pure gold.

Marty · 36:24And until next time, game over.