What could be worse than paying taxes? Provisional income is a perfect example of the hidden agenda in the Social Security system. Everyone must be aware that Social Security is not an entitlement program. Instead, it is receiving money that you’ve already put into the system. Today, we go in-depth with this scheme as we learn how to get away from paying double taxes on Social Security. Know where to put your money in the right place and learn the two strategies to put your money to work in oil and gas.
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Do You Want To Be Taxed Twice? Of Course Not!
Find Out Alternatives To Tying Your Financial Future To The Global Economy And Wall Street
There are so many things I want to talk about. Most of the things I talk about on the show deal with taxes, one of them being the way the corrupt politicians are double taxing Social Security receivers. Social Security is not an entitlement program. Social Security is receiving money that you’ve already put into the system. There was a very unfortunate tragedy with a friend of ours from Mississippi, a very unbelievable godly couple with three kids. Their oldest daughter has just married. They have a son that’s a junior in high school and a little second grader. The mom died of an asthma attack. We were right around Liberty, Mississippi actually in a place called Busy Corner. It’s a very tragic event to go to, a 44-year-old lady passed away very unexpectedly.
I’d be surprised if they had any kind of life insurance. I’m talking to the husband about, “She was a nurse. You might get benefits, or at least the kids can get benefits from the death of their mom.” That’s not a government handout. That’s money that she put into the system that hopefully, the kids will get some of that money. I know that the child that was just married won’t, but the two that are still under eighteen hopefully they will. The government screwed me and my sister over with Social Security. There’s been a ton of articles on Social Security. I had seven articles that I have pulled up and I think I have the best three to read to you.
The government loves people like my parents, Hollis and June Day who paid into the system all their lives. They were forced. The government pretty much told my parents, “Hollis and June, screw you. Give us your money. We’re better at managing your money than you are. We don’t believe you know how to manage your own money, so give it to us. Give it to us after it’s taxed and we’re going to screw you and we’re going to double tax you on it on this thing we’re going to call Provisional Income.” That’s exactly what the corrupt politicians have done in Washington DC. They were double taxing recipients on Social Security that’s what they call provisional income if you were pulling income from another place while you are drawing Social Security. I get excited when I can show someone how to avoid that. There’s a little saying that I learned, “Where your money sits is more important than the rate of return.”
By having your money in the right place, you can avoid double taxation on Social Security, but you have to know about it. I would love to get a cane, and if given the opportunity, I would go physically harm if I wouldn’t get in trouble the politicians who voted on this provisional income. It’s truly double taxation. These career elitist politicians who wouldn’t know how to work a private sector, they’d been on a government paycheck just about their whole life, and they’re telling us how they need to fix the country. You have been in DC for 40 years, you’re the reason we’re in this place, but I would love to physically harm them because they’re taking money from us. That’s what they’ve done. Every paycheck the government is telling us to screw off, that we don’t know how to manage our own money. I’m 42, so I would have walked away from Social Security if I had the option to never to pay into it again because they’re going to keep means testament.
Social Security Costs To Exceed Revenue Next Year
Here’s one article from MarketWatch, Social Security costs to exceed revenue, trustee report shows. “The expense of running Social Security will exceed the revenue generated by the program. A report released showed, in a sign of the upcoming challenges to the key retirement program. The Social Security Administration’s trustee report shows that, in 2018, an income of $1.003 trillion only barely exceeded the cost of $1 trillion. The program received $885 billion from the payroll tax, $83 billion in interest, and $35 billion from tax benefits, while it spent $988.6 billion on benefit payments, $6.7 billion on administrative expenses and $4.9 billion on railroad retirement expenses. Costs haven’t exceeded expenses since 1982, but are projected to in 2020.
The cost will then remain higher through the 75-year projection period, according to the forecast. The rising cost is a sign of the increase in the number of older Americans. The actuarial picture actually improved slightly, with depletion of funds expected in 2035, a year later than previously estimated, the Social Security Administration said. Disability applications have been declining since 2010. Economists attribute the decline and disability to an improving economy. When the funds are depleted, Congress will have to pass a law in order to keep benefit payments at the same level. They could simply decide to pay benefits at the same rate and run up the deficit. Alternatively, Congress could raise the age that Americans get Social Security benefits or increase payroll taxes.”
The politicians are garbage because they’ve been getting a paycheck. They would literally starve if they didn’t have a government paycheck. They operate in an out of touch society, an out of touch world. They’re not like me and you where we have $100 bill and we walk into the local grocery store and we realize we can buy $100 worth of groceries. The government walks in with $100 bill and walks out with $300 worth of groceries because they’re corrupt garbage and they don’t know how to manage money. They keep sticking it to the taxpayer and that’s what they’re doing.Don’t rely on anybody for anything if you can help it or do it. Click To Tweet
If Congress cannot agree to do anything at all, there will be sufficient income coming to pay 80% of scheduled benefits, the Social Security Administration estimates there would be insufficient income. They’re going to keep means-testing Social Security. Meaning with the government cost provisional income, if you’re married and filing your taxes jointly and you are receiving Social Security and you make $44,000 or more of what they call provisional income. That means you pull out $50,000 from your 401(k) to live on. You have some rental property that exceeds $40,000. It doesn’t matter. It’s a combination of different things.
If you’re married and filing jointly, if you get over that $44,000 threshold, 85% of the amount of your Social Security will be taxed at whatever income tax bracket you’re in. This is my opinion and the things I’ve been reading. The people that I’m associated with are more intelligent than me, but I keep up with them. If you’re married and filing jointly $44,000 a year, they may shrink it down to $30,000 or $25,000 or $20,000. They’re going to find ways to basically screw everybody who is put into the system. That’s what’s going to happen. It’s exactly what happened to my parents. If you are close to retirement or ten plus years out or three years out, there are some steps you can take if you are interested in avoiding paying taxes on Social Security.
These elitist career bureaucrats are going to continue to find a way to rip off the people who have put into the system. My parents are a perfect example. My dad was nine years older than my mom, but my mom died of ovarian cancer at 54-years-old on June 22nd, 2006. Her death was expected. The last three or four days of her life, she wasn’t even conscious. She was breathing, but she wasn’t able to communicate. I’ll watch one parent die slowly. My dad died very unexpectedly the next year, seventeen months later on Thanksgiving Day of 2007, very unexpectedly of a pulmonary embolism.
When my mom died, my dad received a $255 check to help with the burial expenses. My dad was not able to get anything from my mom’s Social Security. I took my dad down to the Social Security office in October of 2007 so he could sign up for Social Security. He wanted to start receiving these benefits about six months later when he turned 65, which would have been March of 2008, but my dad never made it there. He died. My parents were forced to put into the Social Security system their whole lives. They were forced because the government thinks that they weren’t competent enough to manage their own money. We were listening to these career politicians and they’re making the rules.
They don’t even play in the game. They’re terrible at managing money. They don’t know how to spend less than they take in and they’re managing our money. It’s the most asinine thing for someone like me who likes numbers and I know exactly how much is in my checking account to the penny. It’s crazy that I and my wife had to give the government money every year. I’m sitting here reading the report from the Social Security Administration website about how they’re going to run out of money in sixteen years. They’re telling us that, and I had to keep putting money into the system. It’s hard to wrap my brain around that. They want to keep doing it and we don’t have the choice.
Four Buckets Where Your Money Is
I don’t like somebody telling me what I have to do with my own money and it’s terrible. That’s why I like showing people. Most people don’t know that they’re even going to be taxed on Social Security, number one. Number two, they’re going to be double taxed. Of course, they don’t call it that, but it’s called provisional income. Most people, when I meet them, all we’re doing is moving money from one place to another. We’re moving money from bucket one. If you can follow me on this, you have four buckets where your money is. Number one is all your pre-taxed money, which is 401(k) IRA SEP money, all that you had not paid taxes on yet, which is where the majority of Americans have their wealth. That’s bucket one.
Bucket two would be like rental property or brokerage account when you pay capital gains. Bucket three is the tax-free bucket. It would be like units of Roth IRA and municipal bonds and bucket four is tax-exempt. All we’re doing is moving money from bucket one to bucket four. You’re not going to pocket any more money. You’re moving it from bucket one to the bucket four and you can’t do it overnight. It takes a couple of years to do. Therefore, whenever you start receiving, when you turn on your Social Security faucet and you start receiving that money, the money that you receive from bucket four is not even reportable to the government. There is nowhere to put that on 1040, whereas everything else in buckets one, two and three, you have to report to the government which, therefore, could cause you to pay double taxes on Social security.
How To Get Away From To Pay Double Taxes On Social Security
There is a way to get around it. It’s legal. You have to be informed on what is in the tax code and I’m very fortunate. I’ve been very blessed to meet some very smart people that know the tax code way better than me and I follow them. I become friends with them. I’m not afraid, so I try to teach my kids to don’t be afraid to ask questions to people. If you want to learn something and you’re ambitious, go ask the questions. All I’m doing is following the tax code. Tax Code 7702, 101(a), 101(g)(1), 72(e), 72(e)(5), Section 86. I have a little book that explains all of that.
It’s getting educated and knowing what else is out there besides traditional Wall Street investments. The whole system’s rigged in my opinion because the government dangles the 401(k) care in front of our eyes. They want you to postpone the tax. Most people do that, yet find out by doing that very thing they’re going to pay double taxes on Social Security. It’s backward and there’s a better way. You have to be informed about it. That’s why when I meet people, I say, “If you are contributing to your 401(k) over the match. If it were me and I was working somewhere, I would probably contribute the minimum amount from my paycheck to get the match at my company.” Take the rest of that since you’ve already been missing that money anyway.
The Next Step In Social Security’s Ponzi Scheme
Take the rest of that and put it in bucket four, and that’s where you call me. I can send you a book, give you a book, meet you for a hot cup of coffee. I tell my kids when my two boys were younger, “Black coffee puts hair on your chest.” That’s a very important thing to a seven, eight-year-old boy having hair on the chest one day. Anyway, it’s about education and I have a plethora of books and it’s exactly what I’m doing with my own money. Here’s another article, The Next Step in Social Security’s Ponzi Scheme.
On January 30, Rep. John Larson and 200 Democratic co-sponsors introduced the Social Security 2100 Act. Portrayed as giving retirees long-overdue benefit increases, it would actually add another step to Social Security’s long-running Ponzi scheme. Despite Democrats’ history of rejecting that term for Social Security, it has been the biggest series of Ponzi schemes in history, redistributing tens of trillions of dollars of wealth to earlier recipients from subsequent generations. After Social Security’s creation, those in or near retirement got benefits far exceeding their costs. Ida Mae Fuller, the first recipient, got 462 times total contributions made on her behalf. Those excess benefits inherently required that future Americans would have to pick up the tab for the difference.
Social Security has also been expanded multiple times. Each expansion meant those already retired paid no added taxes, and those near retirement paid a bit more for only a few years, but both groups received increased benefits throughout retirement, increasing the unfunded benefits whose burdens had to be borne by later generations. Thus, each such expansion started another Ponzi cycle benefiting older Americans at others’ expense. Social Security benefits doubled between 1950 and 1952. They were raised 15% in 1970, 10% in 1971 and 20% in 1972 in a competition to buy the elderly vote.” Imagine politicians saying things to get a vote.
“Benefits were tied to a measure that effectively double-counted inflation and benefits are over-indexed to inflation, raising real benefit levels over time. Disability and dependents’ benefits were added by 1960. Medicare was added in 1966 and benefits have been expanded, Medicare Part B, only one-quarter funded by recipients, and Part D’s prescription drug benefit, only one-eighth funded by recipients. The Social Security 2100 Act.” Have you heard about this on the news? Have you heard about this from the main street media? You have not, probably because the majority of the media is in bed with the far left. The Republicans are a piece of crap too. I’m happy to be conservative by nature, and I think the Democrats have gone far left.
Radical, the day before abortions, thinking that the Boston marathon bombers have the right to vote. They are thinking that everybody should get to go to college for free. If you did go to college and you have college loans those should be paid off. All these radical, crazy, lunatic, buffoon, idiotic ideas. The media’s in debt with that group, not that the other groups are any better, but the media’s debt with that group. That can be flipped in ten years, twenty years. Who knows? No one’s heard about the Social Security 2100 Act, but it would be the next episode. It would increase all retirees benefits including current retirees who would pay nothing towards the boost and increased the inflation, over adjustment for benefits, picking future high-income earners’ pockets to pay for the vast majority of it, by taxing wage income beyond the $132,900 ceiling in place, eventually to all wage income.It's fairly easy to understand once you see how it all works. Click To Tweet
With the multiple Ponzi giveaways, creating Social Security’s thirteen-digit unfunded liability and Medicare’s for a larger one, how can they propose law be rationalized? Without the benefit of being in the startup generation of earlier Ponzi expansions, the present generation is being forced to begin bearing some of the costs.” That’s me. “This was illustrated by an Urban Institute study of lifetime payroll taxes and benefits. Especially with expansions, Medicare recipients were getting a great deal. In 2012 dollars, an average-wage-earning male would get $180,000 in benefits, $119,000 more than their contributions.
A similarly situated female did even better. In sum, it yielded “excess” benefits of $105 trillion with net benefits increasing over time. However, for Social Security, whose major Ponzi expansions came further in the past, an average-earning male retiring in 2010 would make $300,000 in contributions for only $277,000 in lifetime benefits. For women, with smaller average lifetime contributions and longer life expectations, it was about a wash and things are worsening. By 2030, that such men will be “shorted” $0.16, $0.10 for women of every tax dollar paid.
Social Security is a “bad deal” for recipients precisely because the cost of its Ponzi structure is starting to be felt. Rather than admit that their “greatest accomplishment” relied on massive theft from future Americans, they want to restart the scheme keeping rest of seniors in their camp, by doubling even-greater burdens on future generations than they already have hidden behind a flimsy cover story that high-income earners, actually big net losers from the system, would finally be forced to pay their “fair share.” Democrats think they can finesse older Americans out of their votes for still more elections with Ponzi Security, but if other Americans recognized the dishonest ploy aimed at their wallets, they might end up in the electoral wilderness instead.”
We can avoid paying into the system, but we can avoid paying double tax on it. I’m going to tell you something. This was tough for my family and me. We had an unfortunate event to go to the service of one of our dear friends who is 44-years-old and died very unexpectedly of an asthma attack. We were up in a busy corner, Mississippi, Northwest of Gloster, West of Liberty. It’s a terrible tragedy. The mother left three children behind and we’re friends with a ton of people out there in Centreville, Gloster, Liberty Woodville. If America is going to come back strong, it’s not going to be because of career city boys.
That’s not a shot at Baton Rouge. I guess what I’m talking about is big city Chicago, big city San Francisco. It’s going to be from people who know how to skin a deer, who know how to hook a trailer on the truck and change a flat tire. There are a lot of men who don’t know how to do that. A lot of people don’t know how to do that and you have to rely on somebody else. I don’t like to rely on anybody for anything if I can help it or do it. I rely on Entergy and the Baton Rouge Water Company for water, but this country I think, there’s a massive operation.
Even though the media does a pretty good job of dividing us, I don’t think the country’s divided as much as the media wants us to be or as much as we think we are. I think the majority of Americans are getting up every day, going to work, have their nose to the ground and living life, enjoying things on the weekends or when they’re not working. That’s what most people are doing, but you have the corrupt media. One of my good friends is the sheriff of East Feliciana Parish, Jeff Travis. I was in Clinton paying some property taxes up there and we have some land up there in Ethel, Louisiana, which I’m going to get about oil and gas. There was a terrible tragedy of shooting and the sheriff deputy was involved in it.
I could see the look of my friend’s face. Sheriff Travis, he’s a good solid man. He’s a hardworking man and he’s aggravated because of what’s going on up there and there was a protest, which was ridiculous. If you watch the press conference with him and Mr. Phares, the media is asking questions and they’re trying to give them the same things to divide the community. If I was there, it’d be hard not to want to go throat punch those people because they’re there for one reason, to divide. Instead of asking questions, they say things and twist things. I think they should be physically punished in my opinion because then they wouldn’t do it anymore. If you got slapped on the side of your head for being manipulative, you wouldn’t do it anymore.
Two Strategies To Put Your Money To Work In Oil And Gas
This country, we have to get young people on board. We have a lot of hardworking people and this country is solid. We’re the best country in the world. Show me another country where people are trying to sneak into for a better life. Sticking to the tax code here, I love what I do for a living. I love showing people the very strategies. Basically, the three strategies where I have my own money and that’s what separates me from 99.999% of your traditional financial guys. They’re not putting their money where their mouth is. They’re talking the talk. They’re not walking the walk. Ask your guy if he’s encouraging you to put your money in this target date mutual fund or this REIT, or this annuity with phantom fake bonus money. Ask him, “Is this where you have your money?” “No, Mr. Smith. You’re 65 and I’m just 50.” Don’t take it from him. One of the things I love talking about is the tax benefits of oil and gas. There are some tremendous tax deductions putting money in oil and gas. Talking about the Intangible Drilling Costs, IRS Section 263(c) 59(e). The Depletion Allowance, IRS Section 611, 613(c)(6). The Passive Activity Loss Rules, IRS Section 469(c)(3) is all in the tax code. It is a way to drop somebody from a bracket or two of income tax, and yet you’re putting your money and you’re going to be an owner in a project where you could receive monthly checks for selling oil and gas.
There is risk involved. If you don’t want risk, then take your money to the bank and go get ripped off on the three-year CD paying 1.85%. The technology of oil and gas has changed tremendously. It has gotten so much better in the last ten years, much less twenty years. In fact, there are a ton of articles and a ton of information out on the Austin Chalk Formation up there in East and West Feliciana Parish, Amite County and Wilkinson County, Mississippi. My family has 400 acres up there. We’re hoping to lease our land. ConocoPhillips, Marathon, EOG, those are the three main companies in the area and some more are permitted and there are a lot of activities going up there that are targeting the Austin Chalk Formation, which is shallower than the Tuscaloosa Marine Shale Formation.
If our family leases are 400 acres to ConocoPhillips, where is ConocoPhillips going to get that money to lease the land? Where they’re going to lease the land first and then hopefully they’re going to drill, but there are lots of lands that are leased to landowners, what we call the bonus money and the company never comes back and drills. Basically, you got money for doing nothing, money for being a landowner. The way I see it is the oil company, they’re rolling the dice. They had to go lease all this land, but they have good information where they can extract oil. There are two ways, two strategies to put your money to work for this company.
Number one is indirect participation, all of our projects. The monthly income. There’s an opportunity to write-off potentially 100% of the amount you put in. The law actually states 85%, but president Trump made it sweeter where you could accelerate the 15% depletion allowance in the first year. It depends on when the well is drilled and when you invest. I don’t know all the ins and outs of that. I make the introduction to the company and they educate you on that. There are some factors on that, but I’m in every project and the monthly checks are real. I get them. If for some reason you don’t need the deduction, you can carry the deduction forward up to three years.
The first 15% of oil and gas project is tax-free. The US government offers attractive tax incentives to encourage investment in domestic oil and gas projects. You can’t get this from your strip mall financial advisor. They want to run everything through Wall Street. You could go by ConocoPhillips stock, Marathon stock, EOG stock, you could go participate in some Master Limited Partnerships, MLP’s. Those are great. I don’t own those, but I have clients that do and they look attractive. It’s about getting educated out there. Oil and gas are not going anywhere. Ronald Reagan put these laws into existence to encourage American independence on foreign oil and we have hit that point. We don’t need to import any more oil, and we’re fine.
We’re exporting and importing oil which is weird, but it’s the way it is. The price of oil per barrel was around $63. We think it’s going to hit $70 and that’s what we want. $65, $70 barrel oil is great for everybody. It’s great for landowners, for the energy companies, for the consumer. You’re not getting gas at the pump. Here’s a way to put your money to work. For credit and investors, a minimum amount is $50,000 and it’s a way to diversify some of your strategies. I encourage you to get educated. There’s a way you can get access to the website, go watch some videos and learn.
I meet people. They hear me on the radio, they call me or email me, and we meet. This is usually the first time they hear about this, so just because it’s the first time you hear about oil and gas tax incentives, it doesn’t mean they’re bad. It’s the first time you heard about it. I have a very sharp CPA. My old CPA is Tommy Frazer. Mr. Frazer passed away, and so I went interviewed five CPA’s before I picked the guy I have. He knows oil and gas. He’s very familiar with our projects. The whole goal is to drill the wells, get a tax deduction, prove the reserves, exit the project in three to five years. That’s the goal.Learn what the wealthy are doing. Click To Tweet
I’ve been a part of the two exits that one was less than two years and one was about two and a half years. On that, the returns were 18% and 20% return respectively on the basis of the amount putting it on the basis. Once you add up the tax deduction and the monthly income the whole time we were in the investment, the return was a little bit north of 50%. That means it’s going to happen every time. No, but the two times that I was a part of this is it what happened. It’s always important to know what your basis is. Always know what you’re putting in. A lot of people do not know their basis of their 401(k). They know how much is in their 401(k) the total, but how much have you put in compared to the company match? I remember when the market went down, people were saying, “I’m back to even.”
You’re back to even because you’ve still been contributing to your 401(k). Before we ever go drill for oil and gas, before we pick the properties, we go drill, we actually have to go lease the land. I started with step two before step one. All the oil and gas leasing activity are going on in East Feliciana Parish, West Feliciana Parish and even Northern parts of East Baton Rouge Parish. Western parts of St. Helena Parish, Eastern parts Pointe Coupee Parish and all of Wilkinson and Amite Counties, mainly of the Southern part of those counties. East Louisiana’s in the dead center of this place of the Austin Chalk and ConocoPhillips and EOG are basically leading the way in drilling these wells.
Before they go drill wells and permit and all that, what do they have to do? They lease the land. We’re not the ConocoPhillips. We’re not even a fraction of the size of them, but we’re doing some of the things that same things they’re doing. Our wells in the Permian basin and before we go drill, we had to lease the lands. Before we lease land, we have to get money with the raise money, as a private deal. We have to get money from lenders. As an investor, you raise investors/lender and they pay you a rate of return and you basically have six options. You can put your money from one, two or three years, which I love because I don’t like locking my money up for a long time. I like being liquid. There’s a simple interest of yield and a compounding yield. Simple interest yield pays you monthly. If you have cash and you’re looking for monthly income without depleting the basis, without going into the principle, you can earn 8% per year if you lock in your money for one year. You commit to one year’s 8%. Two years, 8.5%. Three years is 9%.
Those are not home run investments. They’re solid and the company has never been late in paying an interest payment. In fact, they were higher when we first started. They own this company for about eight years. They’d never missed a payment. The compounding yield, meaning you put your money in for one year and you get nothing until the end of the term is up. Put your money in for two years, you get nothing to the end of the 24th month, obviously three years, nothing until the end of the 36 months. The compounding yield, when your return is 8.3%, so it’s 0.3% higher than the simple interest. The compounding yield for two years is 9.23%, and for three years is 10.28%, which is great for IRA money, great for 401(k) money, great for SEP money. If you know you’re not going to touch the money, you don’t need it for one, two or three years. You decide how much you want to put in and you transfer your money to a self-directed IRA to a custodian that allows for alternative investments.
It’s very easy to do. There are no penalties or taxes or transfer your money from Fidelity or Schwab to a custodian. There are several custodians you could pick from. You sit back and watch the monthly returns come in, or you sit back and do nothing until the one, two or three-year term is up. It’s exempt, secure business loan structure with annual interest rates of 8% to 9%. Options include simple interests with scheduled monthly payments and compounding interest. The proceeds will finance a loan and in turn, this company intends to use the proceeds to pursue its oil and gas interest. They will obtain deeds of trust against the leases, the mineral rights as security for the project loans made by the company. The objective is to provide individual qualified investors with access to high-quality, secure business loans, which may generate income for their investment portfolio.
The funds lending platform is based on technology in which we consider to be scalable and able to accommodate the varying demand of our referral partners, lenders and borrowers. It’s very easy to understand. Can you stomach an 8% return per year? Can you live with that? “Hollis, I talked to my financial guide, there’s nothing good at 8%.” He’s a liar because there are people getting it. Once you can’t offer those guys, they start bashing it. This isn’t a place to put all your money. It’s a place to put a portion of it. You want to be in oil and gas directly with the company and not run running through Wall Street. It’s an opportunity. You have to get educated.
Back to the lending here, people are like, “What is this guaranteed?” “No, it’s not guaranteed.” I assure your FDIC bank money is not guaranteed either. It’s all a hoax in my opinion. If I was in college again and I was doing a thesis, I would do it on the FDIC insurance. I could give you articles and books to read. I’m up at 2:30 in the morning on how these big banks were sticking it to us. Going back to this, each business loan is secured by Pari-passu Security Interest and the loan documents perfected by UCC Financing Statement in favor of each lender. These perfected liens are created when the lender files a UCC statement with the appropriate authority, commonly the office of the Secretary of State in Texas is with the Railroad Commission. The statement specifies the collateral which secures the loan and gives the lender precedents and the collection process is the borrower defaults. Unperfected liens leave lenders open to the possibility that other creditors can make clean collateral. The project loan will be secure by liens against real and personal property of the sponsor.
It’s a way to invest, to lend your money and to be in oil and gas. It’s fairly easy to understand once you see how it all works. We’re doing the same things that these big companies are doing right here in a parish over from us, but we’re doing it on a much smaller scale. Is that of interest to you? Do you want to see how to get deductions? I have people who want to be in this. It knocks them down. They know exactly how much they have to put money in. There are two ways to invest. There are two ways to be a part of this company. One way is in the land. There are no tax deductions for that. That’s the consistent rate of return. The nice tax deductions come with the direct participation of oil wells themselves. There are people who want to be in those because it knocks them down in tax bracket or two. I’ve seen two brackets depending on how much they put in. They know exactly, “I have to invest $68,000.” They know almost to the penny how much they had to put in to get knocked down a tax bracket to save some money.
Is that of interest to you? There’s a way to be in oil and gas without running it through Wall Street. There’s a way to put your money in a small company where you have access to the CEO if you want to. These guys used to come down to Baton Rouge a couple of times a year for us to do a presentation and give a little update on the company. They encourage you and want you to stop by their office in Irving. You go take a tour of the office. They want you to do that. How many oil and gas companies or how many companies invite their lenders, their investors to go to the home office? It’s not like an open house two or three times a year. It’s like they say, “If you’re driving through Dallas to go see some family or you’re driving to Dallas to get to another destination, stop by and see us. Let us know what time you’re going to come in and we’re going to drink some coffee with you and show you the office.” It’s very transparent.
Can you stomach an 8% or 9%? Can you stomach a three-year compounding rate of return, a little bit north of 10% per year, 10.28% to be exact? It’s a compounding yield. It’s the same strategy for three years and the simple interest is 9%. There are people who do more than that in real estate. I have friends around Baton Rouge that buy houses and flip them and they’re getting 18%, 20% returns. They have these relationships with these banks and they know when a house goes up in the foreclosure and they’re good at what they do. An 8% or 9% return is not crazy. For some reason, if you talked to your traditional stock guy, they think it’s crazy, but it’s not. I don’t think anybody has gotten that in the market. In 2018 the market became flat.
Learn what the wealthy are doing. I’ve been very fortunate, very blessed to be with some wealthy friends and I’m not afraid to ask questions and they show me what they’re doing. I do it according to my income. I’m doing the same exact things they were doing on a much smaller scale. We’re doing the same things the big guys do on a much smaller scale. I encourage you to learn what others are doing. I encourage you to learn what the Tax Code says as I begin the parts of writing a book. I think I’m going to call it Optimization of The Tax Code. Call me 202-SAGE. That’s (202) 7243. Go to the website, SageMoneyRadio.com. I hope the rest of your day is fantastic. God bless you. God bless the USA.
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