Mark Mobius’ Book of Wealth will not lead you to wealth

If you are reading this book with the intention of using the stock-picking insights of legendary fund manager Mark Mobius, you will be sorely disappointed. Mobius is known as an emerging markets equity guru and was executive chairman of the Templeton Emerging Markets Group. The Book of Wealth: A Young Investor’s Guide to Wealth and HappinessDespite the title, it does not offer an analytical look at stocks and their selection. Instead, it tries to offer a holistic approach to wealth and its creation.

There’s a lot of history, a dose of philosophy, and plenty of real-life examples in its pages. As a result, it’s neither a book of history or philosophy, nor a straightforward investment guide. While it tries to be everything, there isn’t a single solid selling point. Mobius, for example, writes about cash as one of many investment options, and explains that many people don’t consider cash an investment despite the interest it can earn in a bank account. It’s a paragraph that promises great insight, but since Mobius doesn’t elaborate, we’ll have to do the work ourselves. Cash offers a lot of comfort to conservative investors, knowing their money is “safe,” not subject to the fluctuations of the stock market, and easily accessible.

On the other hand, the interest rate you earn is never higher than inflation. And inflation ensures that the same amount buys you less over the years. This means that as you build up your cash stash, you run a significant risk of not reaching your financial goals. However, you do need some amount of cash when it comes to your “emergency fund.” Such insights were conspicuously absent from this book. Instead, it abruptly switches to a history lesson: the use of bills of exchange printed on pieces of cloth in the Tang Dynasty, Marco Polo’s amazement at the use of banknotes in the Yuan Dynasty, and a stroll through history that ends with a consideration of whether cryptocurrency can replace currencies subject to the whims of a central bank. After 13 such pages of historical rambling, we come back to cash and compound interest.

This approach is evident throughout the book. The section on stock market crashes could have made for fascinating reading, since nothing illustrates unpredictable human behavior better than the formation and bursting of a bubble. Rather than showing the various stages of greed that culminate in panic, he simply makes a brief note of the crash of 1929, which preceded the Great Depression. Mobius is right to point out the importance of considering real estate or land when building wealth, but his advice is entirely nuanced.

On the contrary, I would say your first investment does not have to be in real estate, but could be in a mutual fund. For numerous reasons, a young person may put off investing in real estate but consistently buy shares of a stock mutual fund every month. Waiting until your entire mortgage is paid off, meaning you are debt-free, and then starting to invest in stocks is suboptimal at best and foolish at worst.

While the book does name three billionaires who made money in real estate, every asset class has its success stories, and this is not unique to real estate. Interspersed between the stories are brief descriptions of investment legends – Jesse Livermore, Ray Dalio, Timothy Kim, John Templeton, Warren Buffett, Paul Getty, Jaimie Dimon, John Paulson and Carl Icahn. But the comments are so general that it is difficult to understand their strategy.

The real disappointment is the chapter on investment strategy, which doesn’t say anything about strategies like value investing, growth, factor investing, etc. Instead, it talks about controlling your emotions, herding, copy trading, and meme stock trading.

What’s good about this book is that it looks at the different facets of wealth, which is refreshing because it’s not just about money. It’s about your health, your peace of mind, your network, your happiness. It’s about what you want out of life. Assets aren’t just real estate, stocks, bonds, art, and jewelry. Your skills are an asset. A key point of the book is to invest in yourself, keep learning, and be patient. This is so important for young investors looking for a quick way to get rich by investing in the markets that are being driven by a crazy bull run.

To get rich, you must invest. To invest, you must save. To save, you must be frugal. But those are just the first two chapters. Beyond that, there is no guide to building a portfolio, nor does it explain in detail every investment option and the investment strategies of experienced investors. While the book tries to offer a lot, it disappoints. The explanations of derivatives are more detailed, but this is not an investment guide for young investors. At best, it would give the reader a superficial understanding of wealth and happiness and show them what to read further to build their portfolio.

Larissa Fernand is a writer based in Mumbai.

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