Matt Badiali earned a Bachelor of Science degree from Penn State University in earth sciences and a Master of Science degree from Florida Atlantic University in geology. As a scientist in this area, Badiali knows a lot about the technical basis behind the mining, energy and natural resources companies. He’s not a finance guy who specializes in the hard asset sector, he’s a scientist who has also learned how to analyze companies working in these fields. Visit the website freedomchecks.com to learn more.
As part of his extensive experience in this sector, Badiali has met T. Boone Pickens, reported to major companies such as Exxon Mobil and Anadarko, investigated abandoned mines and worked on oil rigs. Nobody can effectively analyze these companies while sitting in an air conditioned office on Wall Street. It requires getting out into the field and getting your hands dirty. And that’s how Badiali discovered the companies that send out Freedom Checks.
Section 7704 of the Internal Revenue Tax Code defines publicly traded partnerships, and Statute 26-F, passed by Congress in 1987, allows companies in the natural energy sector to be exempt from paying federal income taxes if they pass at least 90% of their profits on to holders of the units of the partnerships. These units are publicly traded on stock exchanges just like shares of stock. Legally, the business is a partnership, not a corporation. Therefore, the money paid out every quarter is not dividends. Learn more about Freedom Checks at dailyreckoning.com.
Congress wanted to encourage the development of the country’s natural resource sector, especially energy, to eliminate dependence on foreign sources of energy. Therefore, these master limited partnerships are limited to the transportation, production, processing and storage of energy, especially oil, coal and natural gas, and minerals.
One good thing is that many of the companies paying out these Freedom Checks simply transport oil and gas. They own the pipelines that connect oil production to refineries. The federal government regulates how much they can charge, allowing them to raise prices every year. This means their revenue does not depend on the price of oil and other forms of energy. It depends only on the volume of energy. The oil passing through the pipes, the more money they make. That’s true no matter whether oil is $10 or $100 a barrel. They make a profit as long as customers demand oil and natural gas, whether the big energy producers make a profit or not.
That’s why Freedom Checks are such a great deal for investors.