Investing lessons from Mr. Brooks

Investing lessons from Mr. Brooks Posted: 12 Mar 2008 12:58 PM CDT A few months ago, I watched the movie "Mr. Brooks." Kevin Costner stars in the movie as Mr. Brooks. He is a successful business man that has a split personality. One personality is the perfect husband, father and business man. The other is a serial killer. Here is the official trailer from the movie: The movie was OK. It wasn't my favorite, but I enjoyed it. In one of the scenes, Mr. Brooks tells someone that he owns a cemetery. When asked why he owns a cemetery, Mr. Brooks responds by saying something like: "I only invest in things people can't do without." When I heard this, I paused the movie and made a note. For Mr. Brooks, this meant cemeteries and water. Obviously this was a movie, but Mr. Brook's theory on investing has stuck with me. I think it makes a lot of sense to follow this philosophy with our investments. Why you might ask? Simply because investments into things people can't do without tend to be stable investments with long-term growth. What are some things people can't live without? Here are some of my thoughts... 1) Oil (At least for now...) 2) Food and water 3) A place to live 4) Utilities 5) Medicine and medical treatment I'm sure you probably can think of a few more items, but you probably would agree with at least these five, right? Well, if Mr. Brook's investment theory is valid, which investment of the five can you invest in yourself? Well, probably all of them. And maybe you should invest into all of them. Which of the five investments can you completely control ? Only number 3 - a place to live. When I write control, I mean own enough of the investment to influence the management of the investment. Yes, some billionaire could probably purchase enough stock to gain control of an oil company, or a pharmaceutical company, but you and I can't. In fact, one billionaire, Warren Buffet, prefers to invest into companies which he can control. Control allows you to increase the income of the investment and decrease the expenses. Control builds wealth. For the average investor looking for control, the only true investment choice meeting Mr. Brook's theory is real estate. In the monthly Income for Life newsletter, I include several strategies you can use to increase the income from your properties. I just recorded the IFL Audio Series CD for April and the topic was "How to Maximize Profits through Effective Property Management." If you owned shares of stock in an oil company, would you be able to increase the company's income? Probably not. If you owned a single family home, would you be able to incease the rental income. Probably so. Could you decrease the expenses through effective property management? By golly, you could. Real estate might be down now in the States, but guess what? People will always need a place to live. The population continues to grow. This means that real estate is a great long-term investment. I would suggest that you ponder Mr. Brook's investment theory. It does seem to make a lot of cents! Rob Minton