If you’re a savvy investor, you’re probably familiar with capital gains and dividends, but there is one other way to maximize returns on your investments, “freedom checks.” These checks are becoming increasingly popular in natural resource investments, which is due in large part to statute 26-F. Enacted by Congress in 1987, freedom checks are payouts made to investors by companies operating in the oil and natural gas industry. Also, these companies are required to be members of the MLP (Master Limited Partnerships program).
To date, the MLP program is comprised of 560 companies operating in the oil and gas space, and as long as these companies meet government requirements, based on statue 26-F, they are eligible to issue these checks. Visit the website freedomchecks.com to learn more.
What are these requirements? Well, before we answer this question, let’s address the proverbial elephant in the room. Are freedom checks better than dividends and capital gains? If your primary goal is to maximize the rate of return on your investments, yes, they are better. In fact, those who have invested in companies that fall under the umbrella of Master Limited Partnership companies have earned more than they would have with traditional investment products including mutual funds, CDs, etc. To better contextualize this statement, investors who invest a minimum of $1,000-dollars in Master Limited Partnership companies can, potentially, earn as much as $150,000 over the course of 20 years.
As far as government requirements are concerned, MLP companies are required to pay out 90% of their earnings to investors, and for the investor, these freedom checks are taxed as on capital, not return. What does mean, exactly? Basically, it means that, unlike dividends, investors do not have to pay income tax on freedom checks.
Matt Badiali, Founder of Real Wealth Strategist, a newsletter published by Bayan Hill Publishing, supports freedom checks, admitting to personally using them to finance oil and natural gas explorations. In fact, Badiali describes MLPs and Statue 26-F as being a benefit to all participants, investors and corporations alike. Read this article at Money Morning.
Badiali attended Penn State University, where he earned a Bachelor of Science degree in Geological and Earth Sciences, before going on to attend Florida Atlantic University, where he rounded out his education with a Masters degree in Geology and Earth Sciences. However, despite is education Matt Badiali soon recognized is true calling was investments, namely in natural resources.
Before fully entering the investment world, Matt Badiali worked as a professor at the University of Carolina, where he taught geology. And while working as a professor, he entered into a business relationship with a financial expert who sought his expertise in geology. In the end, the agreement profoundly changed Badiali’s professional life.