So You Are Now a Shaleionaire!

So you signed a great lease, they drilled several wells, and you are getting huge royalties.  Congratulations!  But there is a lot of potential negative that comes with all that positive. Sudden wealth can destroy families, divide friends, even end your life any number of ways.

We all aspire to maximize our financial gain from these shale plays but are we really prepared for what comes after? Perhaps its is something that needs to be discussed and prepared for.

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Permalink Reply by john on June 11, 2013 at 7:31am

Assuming that wells are ever actually drilled from my leased land, deciding what to do with that royalty money doesn't seem like a big problem. This also assumes land owners will make a decent amount of money, but I'm still skeptical to how much I would actually earn if they did drill.

Permalink Reply by john doe on June 11, 2013 at 9:50am

In regard of the use of trusts,you must be very careful banks trust departments are in the business of making money,that money is made by CONTROLLING those trusts.

If not worded VERY carefully a bank takes FULL control of that money.

Basically it becomes theirs to charge fees against ...they take as much as they can and and control absolutely.

Banks are horrible entities if the wording is not perfect for the heirs ..and good luck ever wording that trust to an heirs benefit.,

Always remember banks are not your friend..

Permalink Reply by Tim on June 11, 2013 at 2:37pm
Has anyone conveyed their ogm assests into a self-directed ira?

Frank, u can't expect folks who deal in three and four digit checks to act 100% normal with 5 and 6 digit checks. Its basic human nature, cut them some slack, crack a joke, non monetary in nature, be a fellow human. The double looks, peering stares will quickily dissapate. Or just deal w folks who are use to 7 and 8 digits, as they will see your checks as dividend amounts, its merely perspective.

Need a good lawyer for ogm transaction, ok to ping me w personal message.
State of pa.
Permalink Reply by Samuel J. Orr on June 11, 2013 at 3:22pm

You cannot use the IRA to defer taxes on O&G  royalty income or bonus income. If you have earned income, you can put the percentage that the government allows of that earned income in an IRA. Neither O&G bonuses nor royalty income constitute "earned income" under the Internal Revenue Code.

Permalink Reply by uncle sye on June 11, 2013 at 2:46pm

Frank, how much land do you have leased? Just curious, thanks.

Permalink Reply by Nancy LeNau on June 11, 2013 at 3:09pm

I would LOVE.... to be there and see their faces when you do that !  ha ha ha  !!

Permalink Reply by Nancy LeNau on June 11, 2013 at 3:13pm

Frank, I would Love... to be their and watch their faces when you do this !  HA HA HA   Good one !

Permalink Reply by Samuel J. Orr on June 11, 2013 at 3:23pm

And when you get that cash and walk out of the bank with it in a satchel, some dude will hit you in the head with a stick, maybe even kill you, and  then run off with the money and that will be all she wrote!

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 12, 2013 at 7:54am

Frank, you got's the right idea... cash in your hot little hands - you can NEVER argue with a profit - can't get any simpler than that's! Fat Cat's Cash...cat n' mouse...mouse says where's MY cheese...just WHERE did I put that? Fat Cat says - please, at ease...right where you left it - over here, over there...a penny saved is a penny earned.

Pennies turn into nickels...into dimes - jingle some quarters...halves then become whole's...and THEN you'll 'have something'.

Remember what I said about 'being observant' - what kind of 'steward' of your realm were you before these 'showers of blessings'?...it's HARD to teach a dog 'new tricks'! Especially when there is an entire waterfall (like Niagara Falls) just 'dumped in your lap'. Most folks just really & truly DON'T have a CLUE what to do with 'that kind of money' because they've NEVER had to 'deal with it' before. It can be overwhelming for folks.

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Suggestion - analyze YOURSELF. What mental make-up of an individual ARE you? Do you like to: *'risk take it all...and shame the devil'?...are you a patient *'wait & see'?...or a *mix of the two - smart enough to know a good deal when you see it, but smart enough to not get bothered IF you don't 'get that one'...because there's a DEAL out there every day! In all ways!

Today's market is tenuous at best...you don't want to 'squander' your nest egg...because it MAY produce MORE & it MAY *DWINDLE...so ALWAYS put away a little 'rainy day money' - for someday you SHALL MAYBE be in NEED of it.

We have an aging population whom are the main recipients of this 'G/O windfall'...even if you're 'younger' - you're still not THAT YOUNG to not play it smart.... WHAT IF your well's pressure is strong for a year, then falls off MORE than you (or the G/O Co.) anticipated...don't put yourself in a BIND. And DON'T forget to remember to 'set aside' estimated tax FOR you 'windfall'...there are SO many variables!

BEST thought - do your best for yourself everyday in EVERY WAY - then you shall best be able to learn, navigate, & position as 'you see fit' - and YOU WILL BE 'fit' in this new suit of managing money that you didn't have in the same way previous. ***THINK about it this way - IF you 'had this in your youth'...would YOU be as prodigious in your endeavor to 'pretect' as your mindset MAY presently be?...thoughts....

As one light lights another, nor grows less - so nobleness enkindles nobleness.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 11, 2013 at 5:54pm

WELL, john...got news for you concerning 'trusteeship' managed BY a bank (Mellon kept their 'commercial' bank side...sold the 'retail'.

You need to have enough in there for THEM (*the bank) to make $$$ for themselves... before they'll even consider BEING a trustee ?FOR 'your account'...just something to consider. Some people who now have money that didn't before think that they actually have something to worry about - and they DO...just not the 'nickels' that turn those big dog's heads - sorry...but worry not...YOU need to do your own homework.

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I'll bet that YOU can't do any better or worse than 'they can' (AND you'll 'keep your money' & tend it much more wisely...you think for yourself. It IS daunting, but it CAN be done. Just use your COMMON SENSE.

DON'T play 'futures' OR calls/puts - THAT is a great way to make a boatload AND LOOSE it just as quick as you can say 'shiver me timbers'!...good dispersal in more solid companies - some bonds (Nuveen?+)...IF you're going to 'play' - do so only with what you won't mind LOOSING - that way IF you do indeed 'loose it'...then you've already resolved yourself to that.

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Hey, Frank - let me know how you make out when you ask for BIG cash...you may start a 'bank holiday' sai yo na ra!! WHOPPEE! T Hee.!...

Goin' to the bank, goin' to the bank...they won't give me MY money...it's THEIRS, THEY think...

As one light lights another, nor grows less - so nobleness enkindles nobleness. Got some spare change?

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 11, 2013 at 6:09pm

Make your OWN 'trust'! - create your OWN portfolio...BE YOUR OWN BOSS!!! YOU CAN DO IT!!! Just take your time, you'll be fine - don't get 'ANTS IN YOUR PANTS'!...and have FUN - DON'T get all whacked out, ENJO

Permalink Reply by Jim Litwinowicz on June 14, 2013 at 5:58am

GG; couple of yrs ago I started my own portfolio....wanted something safe, solid, and diversified.....invested in solid companies that have been around for generations.....  General Motors, Lehman Bros, AIG,  Sears, and Circut City.....worked out great!!

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