A recent viral video produced by Matt Badiali, a member of Banyan Hill Publishing Company, has popularized an investment first created in the 1980s under a new name Freedom Checks. Freedom Checks is a term coined by Matt Badiali in reference to investments in master limited partnerships. A master limited partnership is simply a tax classification given to corporations in the oil and natural gas industry that allows them to operate with zero tax liability. Obviously, this is quite beneficial for the corporations in question, and today there are 568 corporations and the oil and natural gas industries in the United States of America that qualify as a master limited partnership. Read more about Matt Badiali at Ideamensch.
However, what exactly is a master limited partnership and how does this relate to the investment which Matt Badiali refers to as Freedom Checks? Well, in order to operate as a master limited partnership a corporation must do two things. First, they must generate 90% of their revenues from the production, processing, storage, and transportation of oil and natural gas domestically within the borders of the United States of America. Second and perhaps most importantly the corporation must periodically payout significant portions of its revenues to shareholders. This may not seem like such a unique concept as the same thing is done in the form of dividends in the traditional stock market. However, upon further analysis, several key differences arise. Read this article at Forexvestor.com.
The most important difference between dividends and Freedom Checks is that the income created from Freedom Checks is considered a return of capital. This may not seem like that large of a deal at first glance. However, income that is treated as a return of capital is subject to the much lower capital gains rate of tax instead of the personal income tax that dividends are typically subject to.
You are correct!
— Matt Badiali (@Matt_B_Guru) April 17, 2018
Matt Badiali first discovered the existence of master limited partnerships and Freedom Checks whenever he was doing research in the oil and natural gas industries. After looking into the details, he quickly realized the opportunity that these investments would provide investors who wished to create steady streams of income without increasing their personal income tax liability. He capitalized on his discovery and created his viral video in which he popularized the term Freedom Checks. Overall, Freedom Checks represent a unique investment opportunity for investors to not only invest in their own financial future but in the future energy independence of the United States of America.