U.S. energy independency plays a major factor in the recent investment known as freedom checks. Touted by analyst Matt Badiali freedom checks have been suturing the airwaves for quite some time now. The investment promises major payouts and has been described by Badiali as a huge cash grab. This is because a large amount of natural resource companies are involved, and the combined contribution of each means billions will be divvied out in payments. These payments that Badiali coins as freedom checks are actually return of capital payments, and they represent a legitimate investment in a real live company.
The U.S. has always been aligned towards energy independency, manufacturing enough resources like oil and natural gas to do without outside import. For this purpose stateside business who primarily deal in natural resource production are rewarded with unique perks that afford beneficial profit. One such perk is only being taxed on 10% of their incoming yearly profit. This is because the companies operate as MLPs, selling publicly tradeable stakes to would-be investors.
The stakes allow them to operate like publicly traded entities, which make them eligible for a tax statute. All they have to do is dispend 90% of their profit to stakeholders before taxes, and the remaining 10% will be all that is taxed. This means stakeholders will get a nice percentage paid off in increments across the breadth of the year. Depending on the business these increments are made monthly to quarterly.
The arrangement is great for both company and investor. The money gained from selling stakes give the business working capital, and the investors gets a nice percentage. The stakes function much like stocks, so the payoff functions in much the same way. Excepet the natural resrouce market is primed for major changes. The U.S. is switching to home grown energy, backing off of Middle East oil. This is s trend Badiali has been following closely. The change in direction means more money for statesdie companies, which creats more profit for MLP investors. Continuation of this development will double or triple investor returns. This is why Badiali is adamant about getting people involved in freedom checks, it is a very smart investment.
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