When you're ready to spend money, think carefully: Mark Mobius

Mark Mobius, an acclaimed investor with over four decades of experience in emerging markets, offers a comprehensive guide to understanding and accumulating wealth beyond mere financial assets. His book, The Book of Wealth, underscores the multifaceted nature of wealth, emphasising the importance of intellectual growth, emotional strength, social connections, and spiritual well-being alongside financial acumen. Providing practical advice on frugality, continuous learning, and maintaining good health as foundational elements for building and sustaining wealth, Mobius also highlights the importance of relationships and collaboration in achieving success. Through anecdotes from his life and examples of renowned figures like Warren Buffett and John Templeton, Mobius offers a holistic view of wealth creation, urging readers to invest in themselves as their most valuable asset. In an interaction with Fortune India, the investor distills some of the timeless lessons.

How has your relationship with wealth evolved over the years?

To begin with, I did not hail from a wealthy family. My father died when I was in high school, so I had to work my way through college. I waited on tables, played piano in bars and did all kinds of things. But I never had the desire to become a millionaire or billionaire. That was never on my mind.

And I was always involved in studying or doing something that was interesting to me. I was always a student. It's interesting when you think about it because I'm certainly not a poor man. I'm pretty wealthy by most standards, but I never thought about wanting to become a billionaire or a millionaire.

And in all my time at Franklin Templeton, I never discussed salary. They just gave me what they thought I was worth. It has really had a big effect on me that money has not been the goal. My lifestyle is also not about lavish spending. I enjoy myself, I take people out for dinner, but I don't have a Rolls Royce or anything like that. I could afford it, but it's just not interesting to me.

Where do you think money has played an important and not-so-important role in your life?

After graduating and starting to work, I worked for a company called International Research Associates. The main discussion about pay was how to cover living expenses like rent and food. That was it.

Later, I had my own business in Hong Kong, a consulting firm. That's when I started learning about money in the sense of ensuring your costs were not too high and that you were able to meet salary payments. But again, it was secondary to my objective of getting the work done.

In that sense, my thinking has changed to some degree, but not much. That's why I tell people, don't worry about the money; worry about what you like to do. The really successful people are those who work at something they love, and the money comes automatically as a result.

Successful people avoid decision fatigue. Is that what successful investors do as well?

Warren Buffett is probably a good example, but you find many other investors like that. The important thing is focus. Being focused on one thing and being dedicated to that. In the case of Warren Buffett, it was focused on picking the best investments and taking a long-term view. In the case of Bill Gates, it was being focused on building a computer software system. That's very important because a lot of people get distracted by too many things and therefore lose sight of the real objective. So focus is critical to success.

How has your own investing philosophy evolved over the years?

The most important thing is that it really evolved out of my interest in study, research, and learning new things. This has really directed my life. Since my days as a university student, I felt I learned so much and was interested in many things. I figured that was going to be my life—I was going to be a student for the rest of my life.

This has had a big influence on my investing. I was in Taiwan when John Templeton asked me to run the first emerging markets fund. At the time, I was living an incredible life in Taiwan. I was like an emperor there—I was head of the International Research Institute, and we had the Taiwan Fund. Many things were keeping me there, but the opportunity to study markets around the world, particularly emerging markets, really fascinated me. That's what drew me to work for Templeton and manage that fund. So, the direction my life has always taken is one of wanting to do new things. 

You also mentioned before that people talk about investing in any asset classes, the first asset they should invest in is themselves.

The best investment is yourself. If you are not healthy, not doing something you love, and not ready for that thing you love through practice or study, you are not going to be successful.

Your success comes from within. The way to achieve that is to keep healthy. How do you do that? Exercise every day, eat the right foods, and avoid drinking or eating anything that's bad for you. Generally speaking, keep an optimistic mind. That's the secret to becoming and remaining healthy.

The other side is to remain eternally curious. Always be ready to listen to other people, learn, read, watch, study, and travel. Learn as much as you can because every day there's something new you have to absorb. You'll be better off when you're a learned person with an open mind.

These two things go hand in hand. You won't be able to study and learn if you're not healthy, you won't be able to enjoy your wealth if you're not healthy, and you won't be able to become wealthy if you're not healthy. All these things go hand in hand.

How do you put that into practice—of staying healthy?

In college, you have lots of parties, you drink, and you enjoy yourself. But then I came to the realisation that having too many parties was not a good idea. I'm talking about when I was around 19 or 20.

It's really interesting. I read a book, "The Complete Book of Running" by James Fixx, about running and jogging. That was the beginning of the so-called jogging craze. [Ironically, Fixx died of a heart attack at the age of 52 years while running.] I remember going out one day, following the book, and trying to start jogging. I fell down a lot of times, and my knees were all bloody. But after a while, I felt so good because you reach a point where you become very euphoric. So I said, "This is great. I'm going to continue this all my life."

So, I began exercising regularly, either jogging or weight training. To this day, I still do that. 

On the diet side, you have to watch what you're eating, avoiding too many sweet foods. This is one of the biggest problems in modern society—millions of people are becoming diabetic because they consume too many sweet and starchy things. I try to avoid that, but I still love to have a dessert once in a while. The main thing is to have healthy, fresh foods and not eat as much. For example, nowadays, I don't have breakfast or lunch and only have dinner, or sometimes only lunch and no dinner. I think fasting is very important as well.

Talking about health, how can one take a “digital” detox as screen time is also taking a toll on health?

The important thing is to remember that technology is impacting everyone. One of the great things we see today, particularly in India, is the impact of technology in spreading education. I was just reading an article about how AI can now translate all the different languages of India and handle educational curriculums. This is an incredible thing for people in India and globally.

When it comes to learning, it's crucial to keep up with the new technologies that are emerging. Otherwise, you'll be left behind. I have my iPhone and computer, and I'm learning every day about these new tools and what they can do.

But the main thing to remember is that these are tools to improve your life, not govern it. Use them as tools, not as things that will control your life. This is very critical. Many young people get tied up in various programs as a result of the internet.

In the past, you had to spend a fortune going to university. Now you can learn on the internet. These are all beneficial developments. Of course, there are some negative aspects, but generally speaking, technology has been very positive for people, and they should take advantage of it to improve themselves. I tell them, learn about these tools, but don't let them control your life.

When people get too involved with these instruments, someone needs to remind them that they have a life to live. You've got to exercise, meet friends, and meet people in person, not just over the internet. You need to open your mind to other things, not just the internet or social media like TikTok. It's a difficult argument to make because people enjoy themselves, and many won't listen to your advice.

You have touched upon some prominent investors and their philosophies in the book, but which investor has had a lasting impression on you?

My mentor was John Templeton, and he was an incredible investor. He was the first major investor who said, "You have to not only look at your own country for investments, but you have to look globally." Because if you look globally, you're more likely to find good investments. In his case, the U.S. doesn't have all the best companies or all the best people. There are great people all around the world. So, that's one big lesson I learned from him—you have to look globally.

The second thing is frugality. He was a billionaire, but he lived very frugally. When he died, he left a big fortune dedicated to the Templeton Prize, which is now the largest prize, even larger than the Nobel Prize, and it's for religious science. That inspired me because I realised that although he was a billionaire, he did not spend lavishly. I remember he would take all the scrap paper, cut it up, staple it, and use it for notepaper—things like that. You notice that this man was not one to waste money, which is probably why he became so wealthy.

So, these are the things I learned from him: be frugal, look globally, keep an open mind, and always learn. He was always reading and learning.

Is frugality a trait that anyone can nurture, or is it primarily the result of one's upbringing?

It's a product of the environment to a great extent. In Templeton’s case, he was a very religious man who grew up in a religious family, but he was also very open-minded. And he was a child of the 'Great Depression'. You must remember, when he grew up, the Depression hit America.

You find a lot of people, Warren Buffett is another good example, who remembers the bad times. They went through terrible times during the Depression and therefore tend to be more frugal, not waste money, and think carefully about how they spend it.

One of the things that is going to make India great is that many people in India are currently going through a lot of hardship. As they grow and progress, they will remember these tough times, learn from them, and become very successful as a result.

Is frugality in financial matters a key to success?

Yes, I think it is. It's very important to think about the value of money and not waste it. That's the key. It doesn't mean you can't enjoy life. I enjoy my life—I go on trips, I go for good dinners, and so on—but I don't throw money away. Being mindful of spending while being open and generous in thinking can create a balanced approach to financial success.

You have mentioned in the book that an ideal situation would be where one can save 50% of their income. In today’s times, where EMIs are a common way of life, how can one be judicious in managing finances?

The most important thing is, when you're ready to spend money, to think about it carefully. Do I really need this? Do I need this new car or a new motorcycle? Do I need this new jacket?

Do I need that now, or can I put this money aside to invest? That's the way people should think. Whenever they're going to spend something, they should consider whether they really need it or if it's something frivolous.

If they can put that money into investment instead, they're more likely to become wealthy down the line. It's all about prioritising needs over wants and making thoughtful financial decisions.

The coming generation is clear about their priorities, not splurging on marriages, in some cases about not having kids, not saving beyond what is essential…

There is no denying that social norms are changing, and in some ways, it may be for the better. For example, in India, if there's a marriage, the bride's family is often obligated to spend an incredible amount of money on the wedding. This is one area where they should think twice and say, "We're going to spend a million rupees on this marriage! Maybe we can put 50% of that aside for the future of this couple rather than spend so much."

That's the kind of thinking that I believe will become more common in India. People will start considering changes that allow them to save more and become more prosperous in the future. It doesn't mean we have to throw out old customs. The customs are very nice and wonderful, but maybe we can moderate them a little so that we can save more and then be prosperous in the future.

So, what, according to you, should be an ideal age to start being financially aware?

It should begin at kindergarten. There was once a very interesting experiment done by psychologists wherein sweet jellybeans were given to children in the first or third grade, though it could be any young children. The experimenter said, "Children, you're each going to get a jellybean. I'm going out of the room for 15 minutes. When I come back, those who have not eaten the jellybean will get another one." They studied the children over a longer time span, until they became adults. At the end of the study, it was found that the children who did not eat the jelly bean and got the reward of another jelly bean were more successful. It's a very interesting experiment, but it tells you a lot about the psychology of investing and how important it is to be mindful. Those children who were mindful and decided to save the jelly bean to get another one were set up for future success in life. It emphasises the importance of delayed gratification and making thoughtful decisions, which are crucial traits for successful investing.

Is there a downside to teaching financial wisdom at a young age, such as the risk of becoming too money-minded?

One should not prioritise everything over money. As I said in the book, the importance of relationships. In order to really become successful, you have to have good relationships. If you look at all these successful people, they didn't do it by themselves. They did it with the help of others.

So, that's the other side of the coin. Yes, you can be alone, look after your health, and save on your own. But at the same time, if you want to build a future, you've got to have relationships. That's critical. Relationships play a crucial role in success, and maintaining a balance between financial wisdom and nurturing relationships is essential for a well-rounded and fulfilling life.

How would you summarise your investing philosophy in one quote?

"Don't stop learning, continue to learn."