Chasing a good investment remains a smart plan for anyone looking to amass a comfortable net worth. The investment world, of course, remains a vast frontier filled with multiple opportunities. Buzz surrounds the seemingly new concept of “freedom checks.” While the nickname bestowed on these distributions might be new, the investment venture has been around years. Some time ago, Congress passed a law establishing tax benefits for Master Limited Partnerships (MLPs). Learn more about Freedom Checks at dailyreckoning.com.
Master Limited Partnerships involve publicly traded business partnership ventures heavily involved in U.S. domestic natural gas and oil ventures. Potential investors might find the terms associated with these ventures to be quite appealing. 90% of the revenue must be distributed to the investors. Those distributions garner the nickname of “freedom checks.”
$34.6 billion in freedom checks will likely be distributed this year. That figure helped freedom checks gain a lot of publicity. The oil and natural gas industry doesn’t always receive a lot of attention in investing circles. The speculative nature of oil/natural gas exploration leads more conservative investors to shy away. That’s fine. Investors should pick what they are comfortable with. Based on the potential increase in the price of oil, more people may start looking closer at MLPs.
If the price of oil takes off, then the profits generated by a company invested heavily in exploratory oil would soar as well. Drills and wells certainly reap rewards upon striking oil at a time when the price of oil per barrel peaks. The distributions to investors definitely would be better when oil sells at a higher price.
The arrival of the distribution checks varies depending on the specific entity the investor works with. The freedom checks may arrive monthly or quarterly. Either way, the receipt of profitable distributions will appeal to those interested in supplementing their income or retirement savings.
The fact that 90% of an MLP’s revenues must pass through to investors supports the frequent distribution of freedom check dividends. The 90% distribution deal does prove intriguing to would-be investors. They may wonder why Congress passed such a generous law. Equally curious is why so many businesses would accept an MLP arrangement. Simply put, the energy sector requires significant capital to fuel its operations. Investment capital allows this funding to roll in. Generous investment deals further support the infusion of capital.
Keeping tabs on the energy sector and the price of oil remains advisable for those wondering if this type of investment is worth considering. Read more about Freedom Checks at banyanhill.com.