WWYD? Investment opportunity
- October 7, 2008 at 5:35 PM by Taviesmommy
- 2 Comment(s)
- 32 Total Views
What would you do? I have an opportunity to invest in some existing oil wells through work. Our company is buying a portion of this field and they are offering the employees an the option to buy in also. 1% costs $10,000. I am thinking of borrowing against our 401K since the market is down and buying 1/2% ($5,000). I know that this is a good long term investment, I just don't know if I should do it because we'd have to borrow the money (granted, we are borrowing from ourselves, but I just don't know). What would you do?
For anyone w/ a financial background, it has a worst case scenario 5 year payout, chances are it will payout in less than 3 years. It has established oil and gas production and has 30 year decline, which basically means that this well will be pumping oil for 30 years. After it has paid out, I would get a check every year, for doing pretty much nothing.
Tell me you opinion.
Tags: money, investments, work, oil and gas
- Written by Taviesmommy on October 7, 2008 at 5:35 PM
- 32 total views
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Comments:
Thank you for your advice :) You brought up a coup things I hadn't thought of.
I decided not to do it. I know it would be a good investment, but since we don't really have the money now, it's probably not such a great deal. I guess I will work on getting our debt paid off so that in the future we may have money when another deal comes up. I know that it will, that is one of the great things about our company, they always offer to let us buy in on projects. I know it will come up again. I think I just get excited because I see how much money some of these investments make people and they have to do nothing!
Also, I don't think we would have to pay taxes on it as long as we pay it back, but we have to pay it back with after tax money and with interest. Of course we would only be paying interest to ourselves, but still not such a great idea. Plus we would basically lose 4 years of compounding interest.
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If you borrow from your 401K they will tax that money right? I would look into it the tax from what I understand can be pretty substantial.
I think that it would be a great investment if you don't have to get the money from your 401K.
I think that I would def look into it more. Although I keep thinking of Suze Orman and I can just hear her saying DENIED! Do you have time to write into her?
rmalloy04 Oct. 8, 2008 at 9:01 AM