John Templeton – a great investor who made many others wealthy

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In 1940 John Templeton bought for $5,000 an investment counselling firm with only eight clients owned by George Towne, an elderly man. With a name change to Towne, Templeton and Dobbrow and the purchase of second-hand typewriters and a second-hand library of research material and books (thrift at all times!), Templeton had arrived as an independent investment counsellor, aged 28. He could not afford to pay himself a salary for two years, and had to rely on savings to see him through.

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He was a conscientious manager, seeing his role as that of someone who could, through sound investment, allow his clients to retire comfortably or send children to college.  His clients received an investment programme individualised for their specific needs.

He decided how to split a client’s money between bonds, equities and property. He also helped with estate and financial planning, offering a service to reduce income and estate taxes. He always regarded serving people as a pleasure – a greater pleasure than spending thousands of dollars.

One of his personal mottoes: ‘OPM is sacred’. OPM is other people’s money.

While cutting unnecessary cost he did not skimp on hiring the best talent.  He believed that you get a better bargain in the marketplace for executives and employees if you pay about 20% more than the salaries available elsewhere.  An excellent employee is worth more than two mediocre employees.

There is a major difficulty in scaling-up an investment-counselling business.  Each account has a unique set of objectives and circumstances relating to risk tolerance, taxes and timing.  Clients are on the telephone regularly and have a claim on the manager’s time.

It became increasingly apparent that a more rational, time-effective approach to managing money for other people was to set up mutual funds. He saw in this type of business a way of helping families of different income levels save money and accumulate wealth and security.

Templeton Growth Fund

Templeton, with a few colleagues, set u

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