By: Steve Miles
Doctors, otherwise known as “white coats,” focus on the oil and gas industry. Traditionally, investing in oil and gas required jumping through several hoops, from vetting operators to paying large markups and fees to companies.
As such, investing in the industry was not only difficult but could also be very risky, as there was no easy way to diversify your investments. However, that all changed when Brent Franklin started his wealth management company, Rise Capital.
Brent started as a laborer in the oil and gas industry and eventually became a professional investor. He comments: “I started realizing the opportunity to buy distressed assets, fix them up, and sell them.”
Unfortunately, things didn’t go as planned: “I started partnering with people and didn’t realize they were taking advantage of me without me knowing it. I got beat out on paperwork, I got beat out on contracts, I got lied to about the production.”
It was a steep learning curve, but Brent slowly established relationships with reputable operators and companies. Wanting to ensure that no one had to go through the same hoops he did, he decided to start Rise Capital, a wealth management company. He explains:
I started this model because I wanted to create a way for investors to have options and diversify their portfolios based on their risk tolerance and financial needs. I didn’t want them to go through the learning experience or the learning curve of trying oil and gas on their own. I wanted them to be able to skip the line and partner with professional companies across the oil and gas industry…
He aimed to create investment opportunities that required no management on the investors’ side: “You don’t have to worry about the fulfillment. You don’t have to worry about dry wells or something not working out.”
In other words, instead of having to vet companies and operators, purchase the necessary equipment, and deal with all the paperwork and legal obligations involved in the process, investors can simply invest in several pre-vetted companies in the oil and gas industry just like you would invest in a publicly traded company.
It’s investing made simple and profitable. One of Rise Capital’s many success stories involved a property that was only producing four barrels a day. Seeing the opportunity to ramp up production, Rise Capital purchased the property and immediately put rigs on it.
The production soon exceeded 60 barrels a day, dramatically increasing cash flow and earning all the investors a nice ROI.
But, another reason investors such as white coats are investing with Rise Capital is the tax benefits. Doctors often pay upwards of 37% of their income in taxes alone. That being said, many are looking for investment opportunities that will lower their tax burden.
The oil and gas industry receives major tax benefits, allowing investors to deduct as much as 100% of equipment and development costs. Another major tax break involves intangible drilling costs, which are unique to the industry.
These investments also lead to monthly cash flow in the form of dividends. In simple terms, investors can save a fortune on taxes and use what would have been lost in taxes to bring in monthly payments from their investments in the oil and gas industry.
All in all, by learning the ins and outs of the oil and gas industry, Brent Franklin was able to simplify the investing process allowing others who don’t have his expertise to invest in profitable and tax-saving opportunities that they never would have had access to in the first place.
Published by: Nelly Chavez
