Oil Stock Investments vs. Commodities Futures Trading

I do not understand how regular commodities trading can be part of any sustainable wealth-building plan.

A futures contract is when you agree to buy or sell a commodity at a certain price at a certain future date. Let’s say oil is trading at $60 per barrel. Assume that you think a year from now, oil will trade at a higher price than that. So you enter into a futures contract to take delivery of 1,000 barrels of oil in November 2018. By August 2018, you appear to be right–the price of oil has increased to $75. You decide to close out your contract, and rather than taking delivery, you pass on the rights for the 1,000 barrels of oil onto someone else and you collect your $15,000 less any fees.

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Multimillionaires Spend Way Less Than Their Passive Income

In a survey of 1284 households that have a net worth of at least $2.5 million, 1232 of the households indicate that their annual spending is less than the income generated by their private business holdings, stock dividends, partnership distributions, and rental income. Given that, at a minimum, this implies passive cash flows of at least $12,000 per month, it may not sound surprising to you that these families can make it work.

But what I find interesting are the reflections from these wealthy individuals about their habits on their journey from a point at which their financial resources were modest to the point that they had accumulated something substantial.

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