As far as preparing for retirement, most Americans are told by the “experts” that a 401(k) and Social Security will be enough to cover their expenses for the rest of their lives. However, many people are worried that Social Security may not be around by the time they are ready to retire. A 401(k) is a great option that everyone should take if their employer matches their contribution. The issue with a 401(k) is an individual is limited to only a few investment options. Individuals who want a supplemental income to their retirement may wish to consider investing in “Freedom Checks”. This investment option was first considered a scam when financial advisor Matt Badiali introduced it to the world. It is unfortunate that many of the individuals who heard about “Freedom Checks” probably never invested in them.
Matt Badiali made investing in “Freedom Checks” seem so new and revolutionary. Many stockbrokers with years of experience were unfamiliar with this investment opportunity. However, this investment strategy has been used since 1987 by expert skilled investors with a thorough understanding of the US tax code. The companies one must invest in are “Master Limited Partnerships”. These companies’ issue these checks to their stakeholders and the distributions they pay tend to be much larger than a typical dividend paying company. The tax code allows these companies to operate without paying the federal government any income taxes. The best part for the investor is that the distributions they receive from MLPs are not taxed, meaning they can get a monthly or quarterly income and not have to worry about paying Uncle Sam come tax season.
After the public accepted the fact that “Freedom Checks” were not a scam, many still thought that this was a government program. Individuals should Know that they are buying shares of a company to get the payouts. This is an investment and not a government program. It is very simple to get started investing in MLPs and there are currently over five hundred companies that meet the qualifications to be considered an MLP. Investors should do their due diligence to determine if investing in “Freedom Checks” will help them achieve investors financial independence.