Even Warren Buffett, known as the Oracle of Omaha, admits that he wouldn’t be where he is today without this man, who recently made headlines for his candid critique of young people’s obsession with luxury brands like Rolex.
Charlie Munger is a prominent figure in the finance world and a key player in Berkshire Hathaway, the investment company led by Warren Buffet. The two are often referred to as best friends. Munger passed away in November 2023 at the age of 99.
As of 2024, many people worldwide struggle with economic hardship and inflation due to rising interest rates. In this context, an interview with Charlie Munger on Yahoo Finance in 2022 is gaining renewed attention.
During his appearance at Yahoo Finance’s The Daily Journal annual meeting, Munger left many memorable quotes. He questioned those who buy luxury items, asking, “Who in the hell needs a Rolex watch so you can get mugged for it?” He acknowledged that “Everyone wants luxury. That’s how capitalism advances,” but advised young people to avoid what he called the hell of luxury goods.
Indeed, the number of young people buying luxury goods is rising, and Munger’s words warn them. He explained, “People are less happy about the state of affairs than when things were way tougher.”
“The reason is simple. People care more about living better than others than about living well themselves,” he added. Despite many technological and cultural advancements, Munger believes modern people are unhappy because they compare themselves to others.
In 2023, South Korea’s per capita luxury consumption was the highest globally, and the luxury market size was ranked seventh globally. According to a report by U.S. investment bank Morgan Stanley in January of the same year, South Korea’s per capita luxury consumption was $325, the highest in the world. This was significantly higher than the per capita luxury consumption in the U.S. and China, which were $280 and $55, respectively.
Moreover, the total domestic luxury consumption amounted to $16.8 billion last year, an increase of 24% from the previous year. According to a survey on Perceptions Related to Luxury Consumption in 2023 by market research firm Embrain Trend Monitor, the age group that first encounters luxury goods was mainly in their teens and twenties.
In response to the question about the age at which they first encountered luxury goods, 35.8% of the respondents said college students, and nearly half, 45.6%, said 20s, early career. Many people are encountering luxury goods even before they start their economic activities in earnest.
Due to this trend, global luxury brand CEOs are visiting South Korea, highlighting the country’s luxury market worldwide. According to the Financial Supervisory Service’s electronic disclosure system, Dior achieved sales of KRW 1.05 billion in South Korea last year, an increase of 12.5% from the previous year. This is the third time a foreign luxury brand has achieved over KRW 1 billion in sales in South Korea after Louis Vuitton and Chanel. As more people buy luxury goods, Charlie Munger’s candid remarks are increasingly seen as insightful.
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