Joe Fagan

Former Soccer Star, Now Soccer Fan

October 20, 2018

“Freedom Checks” and Their Tax-Free Benefits

The Republicans were victorious in getting their tax plan passed. Corporations will retain more profits because of the tax breaks they will get to take advantage of and the average American taxpayer should get more money in their pocket. This is the perfect time for individuals to take the money they saved and take advantage of a simple investment strategy that will generate a tax-free income stream. A tax-free income may seem too good to be true and some investors may find this statement hard to believe. The investment is called” Freedom Checks” and it is a legitimate way for an investor to earn a passive income without having to fork over their profits to the IRS, resulting in a higher rate of return.

Matt Badiali was the financial advisor who introduced “Freedom Checks” to average investors. This investment strategy has been around since 1987 but only extremely sophisticated investors took advantage of it. The companies that issue “Freedom Checks” are called “Master Limited Partnerships”. Most MLPs are involved in oil and gas operations. The tax code allows these companies to operate without having to pay any federal income taxes, which makes these companies more profitable. To avoid taxes, the company must pay ninety percent of their revenues to the company shareholders. A shareholder of an MLP can achieve extremely high returns from owning MLPs because they do not have to pay any taxes when they receive distributions from the company. The shareholder is only required to pay taxes if they sell the shares of the MLP for a profit, in which case they will pay a capital gains tax. These companies pay on a monthly or quarterly basis, so an investor can enjoy a tax-free passive income. To know more about the company click here.

Investing in MLPs is rather simple. An investor needs a small starting capital and a brokerage account. The process is exactly like buying shares in any publicly traded company. There are over five hundred companies that meet the qualifications to be classified as an MLP. Once an investor chooses the appropriate MLP for their investment needs, the company will mail them “Freedom Checks” in the mail or deposit the checks directly in their brokerage account.