Dear Readers,
Out of all the interviews Terry Smith has given, this is probably one of the best. William Green, the author of Richer, Wiser, Happier, is a superb interviewer who delves deep into Terry Smith’s early life.
In this post, I’ll skip over his investment philosophy, which has been extensively discussed by many authors on Substack, including myself. Instead, I want to share the lesser-known stories about him and the most important life lessons I’ve learned from this interview. Enjoy!
Sources: BILLIONAIRE BRIT by Richer, Wiser, Happier
Terry Smith is often mentioned in the same breath as Warren Buffett, and for good reason. Both share an unwavering commitment to fundamental analysis, a focus on high-quality companies, and a long-term investment horizon.
Yet, where Buffett embodies a life of understated simplicity, Smith embraces a decidedly more lavish existence. This stark contrast, evident in his residence on the luxurious island of Mauritius and his passion for collecting high-end cars, (more than 200 of them) isn't merely a matter of personal preference.
It's a reflection of a journey marked by a dramatic transformation, a journey that began in the stark realities of working-class East London. While their investment philosophies align, their personal lives couldn't be more different, a divergence deeply rooted in Smith's own remarkable story, which we'll explore in detail.
Early Life: Forged in Resilience & determination
“You don’t get out of where I was to where I am without a lot of determination.” — Terry Smith”
Raised in poor East London, his father was a truck driver from a family of twelve, forced to quit school at 14, smart but trapped until asbestos from work killed him. His mother, kind and honest, worked tough jobs like cleaning and making brooms in a cramped home with no hot water or indoor toilet.
Smith recalls, “In the harsh winter of 1963… we had outside toilets and they froze over… we were sent home from school… for about six weeks… we also had an outside toilet at home, which also froze over.” This hard start fueled his drive to escape, leading him from poverty to billionaire status.
An important aspect of his early life was his intense interest in martial arts, particularly boxing. His uncle, a former boxer, introduced him to the sport, and Smith found a sense of belonging in the tough environment of boxing gyms. This passion extended to Muay Thai, with Smith training in Thailand and supporting a young fighter in Mauritius.
Smith's admiration for boxing legends like Joe Frazier, and Frazier's famous quote, "I kept knocking him down and he kept getting up," reflects his own approach to life. It highlights the importance of resilience and the refusal to be defeated, qualities that define his journey from poverty to wealth.
Lesson: Tough times can make you strong if you keep pushing. His parents’ struggles taught him to fight for more while staying decent, showing that where you begin doesn’t set where you end—it’s your grit that matters.
Mid-Life: Carving a Path of Independence
“I’ve reclaimed the moral high ground a notch too high for people’s comfort zone.” — Terry Smith”
During the 1970s and 80s, Smith began his professional career, marked by pivotal decisions that shaped his future: picking the tough road, taking responsibility, and holding his own view. Here’s the gist.
First, pick the hard stuff. After getting his degree in 1974, Terry didn’t know what to do: “I didn’t have a clue what I wanted to do.” He interviewed everywhere—Barclays, NatWest, Unilever—and chose Barclays because “the one that gave me the toughest interview” felt right. It wasn’t easy, but it pushed him.
Second, take on more. At Barclays, he started small, balancing accounts, but got sent for an MBA, then thrown into fixing their finance mess. By his late 20s, he was running things when his boss sailed off: “I did his job when he was away… early responsibility.” He didn’t wait—he jumped in.
Third, stick to your take. At 33, at BZW, he said “sell” Barclays—his own company’s stock. Bosses freaked: “You’re going to have to leave.” He left, but he was right. At 37, at UBS, he wrote Accounting for Growth. His boss said, “Stop this book.” Terry refused: “The book’s mine, not yours.” Fired, sued, but it hit number one.
Lesson: Embrace challenges, take initiative, and stay true to your beliefs—even when it’s risky. Growth comes from discomfort, leadership is about action, and integrity often demands sacrifice.
Late Life: The Inevitable Trade-offs
“If you’ve had an intense time, it can be difficult to switch it off… you may not be very comfortable to be with at that time.”
His challenging career path led him to take the ultimate step—starting his own fund, Fundsmith. With its core philosophy—“Buy great companies, don’t overpay, and do nothing”—he not only built one of the UK’s largest funds but also helped educate investors like me to think long-term and invest wisely.
However, high achievement often comes at a cost. Smith acknowledges that his relentless focus on success has sometimes clashed with personal relationships. As he puts it, “Some people can’t buy that. They want to be the center of your world, and you say, well, you can’t always be there.”
His reflections mirror Charlie Munger’s observation: many great investors /entrepreneurs struggle to balance personal and professional success, with divorce being a common outcome. Munger’s wisdom on the power of low expectations resonates here.
Lesson: : Success often involves trade-offs. It's essential to understand and accept these trade-offs, and to find a balance between ambition and personal fulfillment.
Conclusion
Terry Smith's journey, revealed through William Green's insightful interview, is a striking example of transformative success. From the stark realities of East London poverty to the luxurious shores of Mauritius, his life story transcends mere financial achievement. While sharing investment philosophies with legends like Warren Buffett, his personal life diverges dramatically, reflecting a unique path marked by both ambition and sacrifice.
Smith's early life, forged in hardship, instilled a relentless drive that propelled him through a career of bold decisions and unwavering principles. This grit, coupled with his sharp analytical skills, led to remarkable financial success. However, this relentless pursuit came with trade-offs, particularly in personal relationships, reminding us that even extraordinary achievements have their costs.
Ultimately, Terry Smith's story serves as a powerful reminder that success is a complex journey, demanding both resilience and an understanding of the trade-offs involved. His life encourages us to reflect on our own paths, balancing our ambitions with the pursuit of a fulfilling life.
Note: I highly recommend all my readers to listen to this podcast as there are many more word of wisdom by them which I didn’t manage to cover in this post. Thanks for reading!
Disclaimer: I might own stocks that mentioned in this podcast and this post is merely for educational purpose. It is not an advice to buy or sell the stocks. Invest at your own discretion.