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.

A lot of speculators are drawn to futures contracts because of the high leverage you are legally permitted to … Read the rest of this article!

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.

And, in this case, 1063 of the households that spend less than their annual passive income state that they left their investment holdings alone while they were getting rich, and also lived on much less than their annual salary. This Read the rest of this article!