LITTLE ROCK, Ark. -- Shortly after they were married in 1975, Bill and Hillary Rodham Clinton decided, as the first lady described it recently, "to create some financial security for our family." Their goal, she said, was to accumulate enough money to educate their yet-unborn daughter, finance their own retirement and help their parents in times of need.
That explanation of the Clintons' now-controversial financial affairs doubtless struck a responsive chord among millions of young, middle-class Americans.
Yet the investment strategies the Clintons pursued in the early days of their careers did not fit the traditional pattern of safe, predictable, mainstream investments chosen by most young couples who are seeking to build a nest egg.
They did not buy a permanent residence. They did not open individual retirement accounts until much later in their marriage. They did not build a portfolio of carefully chosen blue-chip stocks.
Instead, their financial records show, the Clintons repeatedly put their scant resources into highly risky and speculative ventures: commodities futures, oil-drilling leases, limited partnerships and real estate speculation, among other ventures.
Their partnership in the Whitewater Development Corp. and Hillary Clinton's wildly successful commodities trades -- the two investments at the heart of the current investigation of the Clinton family finances -- represent only a fraction of many investments that appear to have been designed more to strike it rich or to shelter income than to assure long-term security for the family.
In the early 1980s, for example, the Clintons made more than $45,000 by investing $2,014 in a cellular telephone franchise. They also earned a handsome return from investing in a highly exclusive stock fund with a reputation for buying on the margin and selling short. In addition, they enjoyed considerable tax advantages by investing in Forest Drilling Partners, a Colorado oil exploration company.
Of course, the Clintons were no ordinary couple. He, as governor, and she, as Arkansas' first lady and member of the state's premier law firm, had plenty of knowledgeable people willing to help them with their investments. That kind of guidance can mitigate the risk most people would face pursuing such a high-risk strategy. And the Clintons did succeed.
Republicans and other critics charge that many of the Clintons' investments smack of possible ethical or legal impropriety -- receiving favorable financial opportunities from individuals and companies seeking favors from the state government, for instance. Those suggestions, which the Clintons have unequivocally denied, are being examined by a special counsel and a federal grand jury.
Professional financial planners know from experience that, in any group of middle-class investors, there are always a few who say they want safety and security but who have the steely nerves and appetite to go after the big killing. Such investors would rather go for large gains, and risk large losses, than plod tortoise-like through a lifetime of small but safe steps toward financial security. The Clintons appear to be among those who wanted to run with the hares.
"If you look at Mrs. Clinton's investments, they are more aggressive than you might normally see with people in her income bracket," said Bill Smith, owner of Smith Capital Management and Hillary Clinton's primary investment adviser for the past 16 years.
"Look at Whitewater," Mr. Smith said. "It was a high-risk, high-potential deal. And I'd put commodities trading and hedge funds in the same category. Anyone who uses leverage in their investing and uses shorting is rightly perceived as an aggressive investor."
In part, analysts say, the Clintons' investment strategy reflected their unique political lifestyle and the go-go impulses that prevailed during the late 1970s and early 1980s -- particularly in Arkansas, where companies such as Wal-Mart, Tyson Foods Inc., J.B. Hunt Transport and TCBY Enterprises were growing rapidly and creating new wealth.
It was Jim Blair, Tyson Foods' general counsel and a millionaire, who persuaded Hillary Clinton to enter the commodities market. And she has acknowledged that his guidance helped her parlay a $1,000 investment into $100,000.
Likewise, James B. McDougal, a real estate developer and former thrift owner, has said he cut the Clintons in on the Whitewater deal in hopes of helping them to get rich quick. David Watkins, an advertising executive and former Clinton political adviser, was responsible for recruiting Hillary Clinton to invest in the cellular telephone franchise.
As their financial records show, the Clintons began married life in debt. Bill Clinton still paying off loans for his education at Georgetown University, Oxford University and Yale Law School. He also ran up a $25,000 debt in an unsuccessful campaign for the U.S. House in 1974.
During a term as attorney general and five terms as governor, Mr. Clinton himself never earned more than $35,000 a year. Before becoming president, he reported his highest annual income of $55,000 in 1981 from the law firm of Wright, Lindsey and Jennings, where he worked for two years after being turned out of the governorship after his first term.
Nor, it seems, did Mr. Clinton pay much attention to the family finances.
Thus it fell to Hillary Clinton to be the main breadwinner, money manager and investor. She went to work for the Rose Law Firm in 1977, receiving $14,800 in salary that year. Her compensation quickly grew and exceeded $100,000 by the time she left last year.
In 1978, the same year Mr. Clinton was first elected governor, the couple's combined wages totaled $51,173. Yet they put themselves in a highly precarious financial position by putting their money into two risky investments: Whitewater Development and commodities futures.
Even though Hillary Clinton was required to put down only $1,000 to begin trading in commodities futures, she herself has noted that she risked having to ante up thousands more had her trades been less successful. Likewise, to buy the Whitewater land, the Clintons and their partners, the McDougals, took out loans totaling $203,000 for which they were personally liable.
In 1980, Hillary Clinton put $6,500 into one of the hottest investments of that era -- an oil-drilling partnership. Until tax laws were changed in 1986, investors in such partnerships could share personally in the tax deductibility of the venture, with the prospect of big profits if the drillers struck oil.
Zack Hager, director of investor relations for Forest Energy Inc. in Denver, said Hillary Clinton was one of about 1,700 people -- including such luminaries as golfer Jack Nicklaus -- who bought into the company's oil-drilling partnership.
In 1983, she and two of her law partners, Vincent Foster and Webster Hubbell, put up $15,000 each to form a partnership known as Midlife Investors. Roy P. Drew, the stockbroker who set up the venture, said that by mutual agreement, the other partners -- not their spouses -- were designated as beneficiaries.
That same year, Hillary Clinton joined with a group of investors who obtained a federal cellular telephone franchise. In order to help the Arkansas Cellular group win the franchise, according to her fellow investors, she not only bought a 2.5 percent interest with $2,014, but also personally guaranteed a $60,000 loan. When the franchise rights were sold to McCaw Cellular Communications Inc. for a profit of about $2 million, she got a check for $48,000.
In 1986, when Mr. Smith went into business for himself by creating Smith Capital Management, Hillary Clinton was one of the first investors in his Valuepartners fund, which buys stock on the margin and sells short.
With 40 partners, it is a highly exclusive fund that is not marketed to the public. The Clintons' current stake in the $8.7-million Valuepartners fund is about $100,000.
Even though Hillary Clinton's investing gradually built her family nest egg into a impressive portfolio valued at something approaching an estimated $1 million today, many of her investments went sour.
Whitewater Development was by no means the only high-risk, speculative investment on which the Clintons lost money. Other losers included the partnership that owns the Rose Law Firm building, Forest Drilling Partners, Midlife Investors, Kaiser Steel preferred securities and an early venture in Hong Kong and Shanghai. She lost $2,532 in one day in 1987 with financial futures contracts.