"Arguably the greatest global stock picker of the century" according to Money® Magazine (Jan. 1999), Sir John Templeton became a living legend by creating some of the world's largest and most successful international investment funds.

At a time when Americans did not give much thought to foreign investment, this native Tennessean blazed a lone trail selling advice on how to invest worldwide and creating in the process not only the hugely successful Templeton Funds but also setting an example in spiritual endeavors.

Beginning a Wall Street career in 1937, Sir John Templeton, now a fulltime philanthropist, eventually sold his various Templeton funds in 1992 to the Franklin Group for $440 million, preferring to become a naturalized British citizen living in Nassau, the Bahamas.

One of the most respected investors of the last century, Templeton charted new paths in investment. At RPIC , we believe the sound investment advice of John Templeton is the ideal five-tier strategy for financial independence in retirement.

We’ve added some of his story to let you know how the strategy evolved.

1. Take Only Calculated Risks

Templeton has shown how by taking calculated and significant risks in business and investments, one can drive profits through the roof.

At a time when the Second World War was beginning in Europe, Templeton borrowed $10,000 from his boss to purchase shares of 100 stocks listed on the NYSE that were selling at $1 a share or less, including 34 companies that were in bankruptcy. No doubt, this investment was laden with risks but he had the vision to see their long-term prospects after they recovered from the war-time economy.

True to his estimates or “macro” view of the world, only four turned out to be worthless, and he turned large profits on the others after holding each for an average of four years.

Lesson: You can take a risk provided it is based on sound research and judgment.

2. Save, Don't Spend

Thanks to runaway consumerism, America has managed to pile up a gargantuan credit card and consumer debt over the past decade, which a person like Templeton who had always believed in living thriftily, finds hard to digest.

• Household debt has more than doubled in the past nine years from $5.2 billion in 1996 to $11.5 billion in 2005 according to the Board of Governors of the Federal Reserve System.
• The U.S. personal savings rate actually hit zero percent in June 2005 and, astonishingly, plunged to -.05% in June 2006 (i.e., people are spending more than they are saving), according to the U.S. Commerce Department’s Bureau of Economic Analysis.

Contrast this to the principles of a person like Templeton who had grown up understanding the value of the dollar, hard work and saving just in order to survive.

While studying at Yale University during the Depression, Templeton had to support himself by living thriftily. He graduated in 1934 as a top scholar in his class. He was named a Rhodes Scholar to Balloil College at Oxford from which he graduated with a M.A. degree in law.

A staunch believer in saving your money, Templeton had set for himself a goal to save 50% of all of his income. He knew how consumer debt can drag you down in a morass of red ink and so he avoided it as best as he could. He waited patiently to buy his first home till he had enough cash to do so.

Templeton’s philosophy of “save, don't spend” brings to mind another great statesman and inventor, Benjamin Franklin, who also offered valuable advice on money matters. Franklin’s most famous pro-saving adage, “a penny saved is a penny earned” is still profound today.

Lesson: Savings earn interest which means more earning power and compounded returns.

Franklin preached throughout his life the virtues of “industry, thrift and prudence”. He made a point of working smart as well. That leads us into our next critical strategy for financial retirement security. You can either work for your money or your money can work for you, or both.

3. Shop for Value Investments in Real Estate by Getting Accurate Information about the Investment before You Buy

After your formal education no matter what it was, continue your self education in investment areas you are interested in such as Real Estate.

The most successful investors in both Real Estate and the stock market are avid readers and keep themselves well informed about the investment arenas in which they invest. If you are planning to be a Real Estate investor, make sure you have updated Real Estate investing information. Get informed and stay informed.

Develop practical investment strategies that work for you. Ben Franklin built his investment retirement portfolio by saving, avoiding debt, and placing well-collateralized loans (bonds) and by investing in rental Real Estate properties. You can do the same right here in the 21st century.

Franklin also believed in knowing the signs of the times. He ignored the doomsayers and profited from his prediction that American Real Estate was destined to become increasingly valuable.

Franklin recognized a great future for American Real Estate for he took advantage by investing in a diversified portfolio of Real Estate. Benjamin Franklin believed that prime American Real Estate was better than gold.

Remember these fine words from Poor Richard’s Almanac, “A long life may not be good enough, but a good life is long enough.”

Templeton follows the fundamental "bargain-hunting" approach to investing. We all know the standard stock-buying advice of "buy low, sell high” but one has to look at Templeton to understand how this strategy can be best utilized.

He picked nations, industries and companies around the world that offered rock-bottom prices ("points of maximum pessimism", according to Templeton) and an excellent long-term outlook. "It's not easy," he has been quoted as saying. "But if you're going to buy the best bargains, look in more than one industry, and look in more than one nation."

Templeton launched his flagship fund, Templeton Growth, Ltd. in 1954, which thrived by holding stocks for an average six to seven years. Each $100,000 invested then with dividends reinvested grew to a total of $55 million in 1999. Led skillfully by Templeton, the Fund averaged a 14% annualized return for over 50 years, far outperforming the stock market indexes.

Lesson: Many of Templeton’s most successful investments were companies that constituted tremendous value investments.

As part of a global tour in 1936, Templeton visited Asian nations like Hong Kong and India where he was struck by the stark poverty. Both these nations happened to be under British rule at the time.

Four decades later, Templeton visited these very same places again only to find that while Hong Kong had taken giant strides in improving its standard of living, Calcutta had hardly made any progress.

Templeton attributed the reason to the difference between free markets and socialism. While Hong Kong as a British colony enjoyed a liberal, open economy and a fast growth rate, the Indian economy was a controlled and protected one where the government regulated virtually everything.

Of course, there was also a wide difference in sheer size of the two countries in terms of population and area.

Templeton’s observations were made years ago. Things have rapidly changed since then.

Hong Kong continues to maintain a fast growth rate, now under the communist Chinese government which allows what many argue is the ultimate free market capitalistic economy on the planet.

India too has risen to become one of the fastest growing economies and one of the hottest markets in the world following aggressive economic reforms initiated since the early nineties.

However, the US continues to be the greatest free market in the world. Not surprisingly then, for a large section of the world’s population owning Real Estate in America is seen as the true sign of Financial Independence. The Great American Dream is still alive.

Lesson: A free market encourages enterprise and entrepreneurship. For any investor, particularly Real Estate investors, a free market offers immense opportunities.

Always the one to spot opportunities in unfrequented areas, Templeton gave up his US citizenship in the 1960s and moved to the Bahamas. Wondering why? That was because the Bahamas imposed no income tax or investment tax. Templeton became a British citizen, and now as a Bahamian citizen, he lives tax-free.

Free from worries of tax liabilities on his investment decisions, Templeton’s investment record improved significantly. Thanks to tax-free compounding, he continues to be one of the wealthiest people in the world, worth several billion dollars.

Lesson: You do not have to run to a foreign country to reap these investment rewards. IRAs, 401(k)s, SEPs, and SIMPLE accounts offer the same tax deferred or tax free benefits.

Ask yourself, why wouldn’t you want to live your life like the man who according to Money® Magazine started “some of the world's largest and most successful international investment funds.”

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