Investment expert Matt Badiali recently released a viral video called “Freedom Checks” that has many scratching their heads, wondering what these investments are exactly.
In the video, now viewed by millions of Americans, Matt says these “freedom checks” are not a government program like Social Security or Medicare, and they’re not a 401(k) or IRA or any similar type of retirement account.
As Matt details, these checks are even better.
They can easily be three or four times larger than the average monthly Social Security payment, and unlike that program, there are no age or income restrictions to collect the checks.
He does reveal that, due to “Statute 26-F,” the companies that issue these checks can operate tax-free, as long as they meet two requirements:
1. They must generate 90% of their revenue from the production, processing, storage and transportation of oil and gas here in the United States…
2. Agree to pay out the lucrative freedom checks to shareholders, many of whom are collecting $124,000 … $266,000 … and as much as $643,000 each and every year.
What Are Freedom Checks? How Did Matt Badiali Discover Them?
Our research team verified that while the name “freedom checks” is a bit unique, the investments themselves are completely legitimate, and were actually enacted by Congress in 1987. Today, 568 companies meet the Statute 26-F requirements and are legally allowed to issue freedom checks.
Matt stumbled across these unique investments while he was working for a famous financial expert on a project that would take him across the globe, meeting with mining and oil company CEOs to stay on the forefront of the latest technologies, discoveries and trends.
For example, Matt’s met with legendary oilman T. Boone Pickens, presented his findings to billion-dollar behemoths like Anadarko and Exxon Mobil, worked on drill rigs and explored abandoned mines … all in order to make profitable investments in natural resources.
It was during this project that Matt discovered master limited partnerships, or MLPs, the exclusive group of 568 companies that can issue freedom checks.
As mentioned earlier, these companies primarily operate in the production, processing, storage and transportation of oil and gas. They explore for new oil and gas wells, transport oil and gas across vast pipeline networks, and refine the oil and gas that comes from the Bakken Shale, the Permian Basin, the Marcellus Shale, and other major oil and gas fields here in the U.S.
These companies must pay out at least 90% of their income to investors, and it’s these payments that Matt calls freedom checks.
The monthly or quarterly payments from MLPs, called “distributions,” are very similar to traditional stock dividends.
However, because they are treated as return of capital, instead of income, investors do not have to pay income taxes on them.
And if you decide to sell your MLP investment, any profit from the sale is taxed at the lower capital gains rate, not the higher personal income rate, offering additional tax benefits to investors.
Fortunately, buying shares in an MLP is just as easy as buying a share of Apple or Google. And just like a traditional dividend-paying stock, you can receive your distribution either in the mail or deposited directly into your brokerage account.
And these distribution checks can be sizable amounts. Matt tells of guys who are making $10,000, $25,000, $50,000 a month!
Of course, these are the top investors. Most people can’t expect to make returns this high. But these freedom checks do pay out two to three times more than most conservative investments.
The good news is that with some of the MLPs trading for less than $10, it’s possible for anyone to get started today, even with a modest amount of money.
Best of all, with savings accounts and CDs paying paltry returns, the income collected from your “freedom checks” can dramatically improve your retirement.
$1,000 invested in a CD for 20 years would only give you payouts totaling $320.
Investing that money in corporate junk bonds at 6% would pay you $2,207.
But that same $1,000 allocated to just one freedom check opportunity could pay out as much as $149,300 when you add up the regular payments and capital gains.
To learn more about how you can start collecting freedom checks from Matt’s favorite MLP investments, we have a transcription of his video presentation that you can read by clicking here.
for The Daily Reckoning