Introduction
Hey, good morning everyone. Troy Eckard here with Eckard Enterprises in Dallas. I’m going to start a series of breaking down not only investments in general, but how the oil and gas sector should really be viewed from an investor’s perspective. These are going to be short, three- to five-minute informational and educational videos and presentations. What I’m going to try to do is feed this to you in bite-sized pieces so it doesn’t waste your time. Most importantly, I want you to be able to grasp the concept.
I’m going to start off with something I’ve learned over the last 40 years as a general premise. I want you to remember this every single time—no matter what the investment is. There are four fundamental things, in my view, that should always be considered when making an investment. It’s not that hard. Ready? Here we go.
The Four Ingredients
Let’s talk about it first. There are really only four key ingredients to investing.
#1: How Much to invest
Number one: when somebody talks to you about an investment, ask, “How much are you asking me to invest?“ It’s real simple. Based on how much they want you to invest, you can quickly ascertain in your own mind—based on your own net worth and portfolio—whether it’s something you can or should consider.
#2: The Risk Level
Number two: once I know how much money you want me to invest, I want to know how much risk is involved. The amount of money is only relevant when compared to the amount of risk I’m willing or able to take.
#3: the potential return
Number three: how much potential return can I earn? So far, we’ve got the amount, the risk, and the potential profit.
#4: The Timeframe
And here’s the fourth fundamental part: what’s the timeframe? Because you can promise me the world—you can promise a preferred return, an IRR—but if it takes 30 years to get it, that might not match my goals. So I need to know the expected duration.
In Conclusion
These four simple questions—how much, how risky, how profitable, and how long—are what I call the four cornerstones of smart investing. If you apply them to every deal and stay disciplined, your decision-making will be clearer and your results more consistent. That’s the mindset every smart investor needs to adopt.
Want to Learn More?
At Eckard Enterprises, we specialize in helping educate qualified individuals on mineral rights, working interest and other oil and gas related opportunities.
Whether you are already familiar with owning mineral rights and working interest or new to energy ownership, connecting with the team at Eckard Enterprises gives accredited investors access to more than 40 years of oil and gas expertise as well as a wealth of industry knowledge and educational resources.
Ready to learn more? Register with our app or reach out to our team at the link below.
