Well... some investor called me today to try and sell oil investments to me. According to him, if I invest 140k, I'd be getting an estimated 31k every month and if I keep reinvesting the monthly returns, i would end up with a whopping 360k profit by the end of 4th year. I understand hee is a sales guy, but if there are any oil barons here, does these numbers make sense? Or is it just another wolf from the wall street?
Too good to be true.
If anyone cold calls to sell you an investment, you just have to ask yourself why are they offering you this incredible deal? Are they really that generous and you're so lucky?
Don't listen to him. Oil is good to get into right now given the low commodity price environment but 31k a month for a 140k investment is ridiculous
If you really could get those returns don't you think all the big financial institutions would be doing it?
22% return for one month is insane. Not good insane, Ponzi scheme, Wolf of Wallstreet defrauding the investors and stealing their money insane.
If you buy now you could be sitting on it for half a decade to break even at those rates. It is desperate times for petroleum. They thought prices would be much higher by now. They are expecting another crash early 2018. Companies that have stayed afloat thus far are running out of cash reserves and aggressively seeking new investors. If you want to do it, it will come back up eventually. But you must do your research. Learn the shales and invest in wells that will drill in rich or promising shales using the latest tech. Male sure they're drilling somewhere where the government is friendly (Texas, Oklahoma, New Mexico). You don't want an endangered drought lizard to sink your investment when the EPA shuts them down. Know the company and their size. You want a larger and older investment company. When times get lean payout percentages get changed in transition as companies are bought or wells are abandoned because they can no longer afford to staff them. Know whether they own their own drilling operator or whether they will be contracting. Contracting does not save you money, it reduces the investment company's liability. Contracted operators are often lower paid and have less safety equipment. Leading to more shutdowns due to accidents and lulls when they eventually transition to a new operator. When they aren't pumping, you aren't getting paid. It is low risk if you do your research and you have patience. Think of it like owning a small rental condo that occasionally has massive returns.
"Endangered drought lizard"😂😂 Yessss. As someone who came from the oil industry you really do have to worry about areas with super random endangered animals because they can and do shut down all operations
The struggle is real bro. But ain't nothing like some O&G mailbox money if you invest deep.
I'm not allowed to give you financial advice but I'm invested in blue Chip big oil and gas companies that have good dividends. Check to see what their hedges are at COP is at 50 a barrel. So if gas goes below that they are negative anything above is profit
Read Rich dad, Poor dad. Don't get swindled.
I love that novel. Kept me thinking for a lot of nights.
Just remember, the salesman is making money off the commission not the from the investment he is proposing. As engineers, we often are savants of our fields and wouldn't let a salesmen tells us what's good yet we often neglect to learn about money and they don't teach us anything about it at universities.
Are we not going to focus on how 31k returns a month over 4 years is 1.5M not 360k profit? And that isn't dividend reinvesting. Sales guy probably meant 31k in distributions a year which is roughly 22% on a 140k investment. Possible with some CEFs or stocks like BPT but can be overly volatile.
Get out of any type of oil / petroleum/ gas investment
I thought so too. But alternative energy is still at a primitive stage (to scale up to run industries in alternative energy). I see atleast a couple decades before the U.S. stops liberating middle east or delivering justice. Don't you think so?
If you really wanna invest why don't you go for those alternative energy than?