I've been splitting my paycheck into two banks, 80% weighted towards a high yield savings account (0.9% interest) and a local credit union for ATM access to cash. All of my other payments are through credit cards paid off monthly, strictly for cash back rewards.

I have a 401k of about the same value, and some cash investments in various stocks. (Just added 1000 shares of UCO to my portfolio, woot, I'm a retail puppet!!)

But aside from visiting a financial adviser, which I am questionable about their effectiveness, any suggestions as to how to grow the wealth?

I work in the IT realm of the regulatory compliance industry so I have to manage mail from registered financial advisers. And during the course, have seen a lot of financial advisers that are flat out broke, or are way underwater on their obligations... Kind of breaks the link of trust if your adviser is $400k in debt, complaining about it, and then issuing advice.

I also tried daytrading futures, but, that didn't work out well :)

  • Get some (5% or so) of your money into REIT's. They pay high dividends and are most advantageous in a Roth-IRA. – Knuckle-Dragger Mar 20 '15 at 23:22
  • I forgot to mention, I actually hold REIT's (Northstar, before they split). I was considering selling them of as stock prices haven't been getting much love lately. – beeks Mar 20 '15 at 23:23
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    Despite the 5 paragraphs, you offer virtually no details on your situation. Age? Your avatar seems to be a 12-13 year old son, but how old are you? Is this money considered 'retirement' or shorter term? So far, we know you have no debt and $50K to invest. Not much more. – JTP - Apologise to Monica Mar 21 '15 at 0:42
  • Your comments are flattering, but i'm pushing 30. :) The money is outside my existing retirement vehicles. – beeks Mar 21 '15 at 1:57

Here is some good advice, read your UCO prospectus. It seems to hold 20% of it's value ($600MM out of $3B) via 13800 of the Apr 21st 2015 contracts. (expiring in 30 days) Those will be rolled very quickly into the May contracts at a significant loss of NAV. (based on current oil futures chains)

Meaning if crude oil stays exactly the same price, you'd still lose 1% (5% spread loss * .20% the percentage of NAV based off futures contracts) on the roll each month.

Their other $2.4Billion is held in swaptions or cash, unsure how to rate that exposure. All I know is those 13,800 contracts are in contango danger during roll week for the next few months (IMO). I wonder if there is a website that tracks inflows and outflows to see if they match up with before and after the roll periods.


How Oil ETFs Work

Many oil ETFs invest in oil futures contracts. An oil futures contract is a commitment to buy a given amount of crude oil at a given price on a particular date in the future.

Since the purpose of oil ETFs is only to serve as an investment vehicle to track the price of oil, the creators of the fund have no interest in stockpiling actual oil. Therefore, oil ETFs such as USO periodically “roll over” their futures contracts by selling the contracts that are approaching expiration and buying contracts that expire farther into the future.

The Contango Problem

While this process of continually rolling over futures contracts may seem like a great way to track the price of crude oil, there’s a practical problem with the method: contango. The rollover method would work perfectly if oil funds could sell their expiring contracts for the exact same price that they pay for the futures contracts they buy each month.

However, in reality, it’s often true that oil futures contracts get more expensive the farther their expiration date is in the future. That means that every time the oil ETFs roll over their contracts, they lose the difference in value between the contracts they sell and the contracts they buy.

That’s why funds like USO, which invests only in WTI light, sweet crude oil futures contracts, don’t directly track the performance of the WTI crude oil spot price.


Due to these reasons, I'd deem UCO for swing trading, not for 'investing' (buy-and-hold). Maybe later I'll remember why one shouldn't buy and hold leveraged vehicles (leverage slippage/decay).

Do you have an exit price in mind ? or are you buy and hold ?

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  • @beeks - well I hope you took my advice. UCO is now back where it was on Mar21st - yet oil is still over $50 (back in march it was closer to $40 when you purchased). See how that works, oil is up nearly 25%, yet UCO is breaking even. 25% slippage in just 4 months. – Knuckle-Dragger Jul 22 '15 at 20:32

Considered a down payment on a house? Some illiquid assets?

Otherwise you are doing 'responsible' get rich slow (read: get rich old) type things. And this question only invites opinion based answer.

You tried futures and don't want to take that kind of risk again with your $50,000, so thats that

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  • Not interested in buying property yet, i'm safe where I am. – beeks Mar 21 '15 at 2:08

Before anything else, pay down any debt at higher interest rates. Best guaranteed return on investment you can get.

What do you plan to use the money for, when, with how much advance planning? How risk-tolerant are you, and how patient are you ? Would you see a dip in an asset's value as lost money or a buying opportunity?

A good financial advisor -- and I mean one who is ONLY an advisor and not trying to sell you anything but their services -- can take answers of that sort and recommend a mix of investment types that will suit your needs. Knowing that balance, you can the pick specific investments to suit. (I remain a fan of low-fee index funds as a painless way to get good diversification, with some small percentage for more active trading if you really want to invest the effort and are convinced you can beat the odds.)

Other answers here on the personal finance discussion go into this in detail, so I don't think it's worth repeating here unless there's something really unusual about your situation.

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