What if money and investing was easy to understand?

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What if money and investing was easy to understand?

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What Tom Cruise can teach you about investing

Table of Contents

I saw the latest Mission Impossible movie (starring Tom Cruise) this week. It was incredible. Fun, exciting, pushing the limits of action cinema and also – expected.

Expected because I now go into any Tom Cruise movie knowing that there is a more than likely chance the movie will be very good. He's got his rhythm, knows his methods, works to his abilities and after 30 years can consistently deliver even better than before (number 6 is the best of the series so far in my view).

A post shared by Tom Cruise (@tomcruise) on

The quality of this movie got me thinking about his career to date. It wasn't a fluke this movie was good. It isn't a fluke that there are barely any other actors around performing at the level he is for this long. He's been successful for several reasons and in thinking about them I saw similarities in how his techniques can be used support an excellent investment strategy.

So what can we learn from T Cruise? Let's list them out.

Disclaimer: This isn't a promo to go see the movie, or any of Tom Cruises other films.. I'm purely an advocate of his work.

When starting out, you'll gain valuable experiences that help you long term

In his first 10 years of acting, Tom (as many actors do) didn't have much say in what roles they picked up. He started in comedy/dramas, some lower budget, buddy and coming of age stories (Risky Business, Top Gun, Cocktail) .  He then moved to serious dramas working alongside already established actors (Rain Man, Born on the Fourth of July, A Few Good Men) and started to pick what he thought might suit his career.

Looking back now, it seems strange to think of some of these roles that Cruise pursued – considering the type of roles he is known for now in high octane action and franchise based movies.

It's because of trials and efforts in the early days that led Tom to his journey 10-20 years later. He started to understand what was working for him and what wasn't. He gave it a go and over time slowly tuned his focus to the things that work for him best.

This is why he's lasted, he's narrowed his focussed to repeating the patterns of success that he's experienced.

Lesson

We can apply trial and error to investing. In the early days you might think every kind of investment is a winner – like property, shares, crypto, a mate's business or currencies.

It's not until you experience the difficulties of these scenarios like these will you understand what works for you personally, and what might be best in the long run.

You'll slowly get to a place where you can realise and understand what your specific investing method is. There is a lot of advice and suggestions out there but if you get started, you'll be able to understand how your investing.

A post shared by Forrest Point (@forrestpoint) on

Give yourself a long term view to get the best chance of being above average

If I reviewed Tom's career after 10 or even 20 years, I'd be talking about a wave of difficulties in terms of his performances or quality of movies he was in. It hasn't been until the last 10 years we've seen consistently providing us with some brilliant films.

Like a good strategy, Tom has committed. Committed to regularly putting himself to work over a lengthy period of time.

Tom's breakout hit was 1983's Risky Business – 35 years ago. Since then he has acted or produced in another 19 films that have been ‘certified fresh' by Rotten Tomatoes (those that are rated at least 80% or above by the public/critics). There have been some duds in between, but every year he turns up and works.

If we look over the last ten years his movies collectively have rated 70% on average. Some higher, some lower. Each time you invest in seeing a movie of his you know you'll get most likely get a 7/10 in return. This bloke is proven.

Lesson

It's easy to get anxious with investments that aren't performing straight away. Give yourself time to diligently save, accrue and collect the rewards of long term investment performance.

It takes a few years for a compounding effect to kick in and be noticed (could be 7-10 years).

Find out your strengths or your knowledge set and focus them

If I asked you what Tom Cruise's favourite things to do in movies are would you be able to tell me? Maybe. Maybe not.

But now that I'll give you the answer, you'll probably immediately be able to picture it. He loves to do his own stunts – running fast and riding motorbikes.

A post shared by Tom Cruise (@tomcruise) on

Tom is famous for doing his own stunts and no doubt enjoys this aspect of moviemaking. He is regularly put in scenes running through streets or hopping on a bike for brilliant effect. It's what he knows, it's what he's good at and it works.

Cruise is also staying close to his favourite genre of film action blockbusters. He knows they work for him and his fans will appreciate the work.  He knows the formula of an enjoyable cinema experience.

He's done with experimenting as he knows his strengths. He's not trying a period drama for the sake of it. He's not jumping to make a Netflix special or launch a new TV show. He knows what works and drives it hard, everytime.

Lesson

Early on you might try and test investing in different formats, through different people or services. But once you find out what you know, like and are good at then drive that hard. Invest in what your know and often to your advantage.

Don't feel pressured to chase what others want – push away your FOMO

Tom Cruise spends his energy on the tried and true methods that gave HIM his best results. Personally he's into a few alternatives ways of living, and doesn't really seem to care. You don't hear or see from him much away from premieres these days.

Early on he chased roles that gave him Oscar nominations (he's received 3), but in the last 15 years his focus has been on a genre that doesn't receive many academy accolades. His focus is now on his strengths and what he is comfortable with. While he might have felt pressured to win awards and nominations, he's passed that and now believes in what is right for him.

Tom Cruise doesn't care if actors are diversifying into unique roles in older ages, if actors are moving to Netflix specials or hopping on the lecture circuits. It doesn't matter to him that most people his age are pushing for retirement. To him its all about his inner circle and to achieve the goals he sets.

Lesson

Personally I know sometimes I see everyone winning with property and thinking – that should be me. I need to remind myself that I have a good system in place already that is simple and proven. I like shares because I know and understand the process for sustained success. I like the liquidity and the ability to be diversified, plus there are no phantom costs like property.

Don't be concerned if others are succeeding or chasing success in other investments. Don't worry if your methods aren't common or mainstream. If it works for you, then keep doing it. What others are succeeding at doesn't always translate to everyone.

A post shared by Tom Cruise (@tomcruise) on

There will always be distractions

Other have come and gone, but Tom Cruise continues to act at the level he knows.

There are unknown actors, actresses popping up all the time. New franchises, streaming services and broadcast deals in place to distract us from regular programming. What Tom knows is that people like simplicity. The simplicity of being entertained. If you can do that well then there will be interest.

As much as we want to try new genres, shows or people. We still feel happy watching Top Gun or Jerry MGuire again and again – because it just works.

Lesson

Trust what you know. Focus on what it proves. The shiny allure of fresh alternatives will always be there. It's the most boring methods that work best.

There will be dry spells

Ahh, yes. There will be duds. The Mummy and Jack Reacher 2 are two movies in the last 10 years that I'd say have been average to watch. It's hard to meet lofty standards all the time. Sometimes the story, the cast, his performance, the timing just doesn't mix and you can't easily predict the results. There's always a chance the next movie could be a dud, there could be a few in a row.

Lesson

Always look at long term averages (5 years plus) when forecasting your investment considerations. There will be awful times, and you'll never know exactly when it may change. A short term drop doesn't show a pattern so don't panic.

Take the path Tom Cruise has set

For Tom Cruise its make the next movie. Do it his way and continue.

For you it could be several things – start investing, focus your investing, find your strengths, remove the pressure to succeed or think long term.

Who knows what Tom will dish up next, but I do know that he will do something and it'll most likely worth watching. Wouldn't it be great to have investments like that?

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