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 Kathleen on June 14, 2013 at 10:36am
That is so funny. How did you miss out on JCPenny and Best Buy?
2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 14, 2013 at 4:18pm

STOP, Kathleen...there are MANY that individuals will 'gain' in, as well as LOOSE with various stock play/decisions. Jim decided to share a few of his plays - and his mind is his own - you have yours...that is 'woman talk'...

...it is NOT good to say  - 'how could you miss out on'...?' ***EVERYONE 'misses out' & 'everyone gains'. I personally like tech, but am familiar with these plays mentioned. - good 'base'....

See, it is good to have a bit of diversity...Boeing (BA), Intel (INTC), KO (Coke) &/or PEP (Pepsi), Whole Foods (WFM), GE (General Electric), United Technologies (UTX), Alcoa (Alcoa), Medtronic (MDT), Stryker (SYK), Pfizer (PFE), Biogen (BIIB)...then there is SO much more - the world IS your oyster...in many, many respects.

There are MANY 'comfort zones' for AmeriCANs to endeavor in...some like to 'risk little' & learn slowly (Remember: *You can never argue with a profit). In THIS situation, 'baby steps' are just fine.

A good way to invest is to first follow a group of stocks, then as you become familiar...'position' lightly (anywhere from 100/200 shares) - that way, you have an 'anchor' position. IF it goes down, but you feel the fundamentals are good - you can 'dollar cost average' -OR- if it goes up (and proves your thoughts correct) - you can 'profit' OR decide to again 'dollar cost average' with another position, after affirming your thoughts.

There are MANY, MANY 'play scenarios' - it is all in 'the quest'.

------------------------ but don't, do NOT make 'little minded statements' that cause people to hold back & not share, Kathleen - I could make you look like a chipmunk, sweets (THAT is a 'schnook statement' - the 'chickmunk statement' - WHAT did it gain YOU or I? see what I 'mean'...means absolutely nothing.)... I can tell you loads of plays - some grand, others slaughtering...but THAT is neither here nor there...a much better thought/question is 'HOW are they working out for you? - sounds good, which would you recommend - which not?...' THIS way - there will be insights gained FOR ALL.

The name of the game - for ALL of us...is in handling what has been granted.

For some - the best goal will be to pay off the house & accrue a 'retirement' that they didn't have the ability to do before (like can be done NOW). They will be frugal, not ostentatious...but live 'tight & right' - and that is THEIR CHOICE.

There will be those 'new' to the investing game & those who have 'been around the block'...and in the end - it's all the same. The house always wins - sometimes yes, sometimes no.... Today is petulant. You may only see 'rides' once or twice in your LIFETIME - things don't have extravagant up & down moves (like in the internet craze)...and it IS harder to make calls that make any sense. It's tough, and yet somewhat simple - and FUN.

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It's really amazing - you can now 'position & participate' - OWN A POSITION in a company. That is grand. YOU can participate in technology that you research, believe in...There are MANY tiers of companies to invest in. Maybe you can't invest in Apple (AAPL) or Google (GOOG)...but you can look at their competitors, and research them...position in the 'second tier' down & still profit. Some companies aren't comfortable with having their company get 'too high' for investors - like Oracle (ORCL) - so they'd get up around 80 & split...it's much easier to buy 100 shares @ $40 than at $80...you can buy x2 100 share positions of TWO $40+/- stocks vs. only 100 shares of the $80 stock. The $80 stock MAY actually go up more in the long run...one of the $40 stock positions may get taken over & THAT position may benefit...

MANY different options/opinions. You can have a 'solid' BASE position of a family of stocks (love 'em...), THEN have your 'play' positions (love 'em & leave them - take the money & run...). You may even have a stable that you're in & out of at various times, depending on the temperament of that particular stock.... It all takes time to mentally adjust & gather your mind...it takes guts to 'lay your money down'. Sometimes you don't learn until you've lost. Sometimes it is best to be the turtle....

***How about a hundred shares of the co. that you signed with (or the G/O Co. who BOUGHT the Co. you signed with?)...OR a basket of G/O stocks?...just something to think about.... Why not 'bet on your own horse'?...NOT a bad idea - use one Royalty check & position in the company you are getting paid from - can pay off in a myriad of ways....

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ANYWAY - if investing ideas are to be shared, let's not get 'catty' (little minded... ...blue suede shoes...) in communicating. Let's share & gain together. Your mindset is not Jim's, nor mine...as ours - not yours. If YOU did make out with Pennies & BBY - good for you. I personally am not a 'retail' investment mentality, but if I were-  Cost Co. (COST) would be one long term (off the cuff...)... Potential good strategy, also like Whole Foods (WFM) - also good long term strategy/management (horizon...). Just a bit of BS...and that is NOT 'Blue Suede' (BS?) shoes...do you best. Follow the beat of your own drum (have so far & been fine, right?)...

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

Permalink Reply by KFS on June 12, 2013 at 6:14am

Gosh I hope to find out how we do in handling it! ;p

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 12, 2013 at 7:57am

'Having it', K Seabolt is the good position to be in...HAVING to 'figure out how to handle it' is even better! *As one light lights another, nor grows less - so nobleness enkindles nobleness.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 12, 2013 at 9:57am

It's pretty clear-cut & dry - isn't it, Frank? Oil & Gas Mineral and Royalty Income Taxes

...you get the money, you HAVE to pay tax on WHAT YOU RECEIVE. Far as I know...the only 'deductions' you have are the 'DEPLETION' AND any ***FEES*** you incur using a lawyer, professional services, + (minimal, really...unless you're REALLY 'paying' for some's 'services')....

Keep your money in YOUR pocket where it belongs. Frank is correct - EVERYONE 'has their hand out' once they know that YOU have the cash.... TRUST YOURSELF.

Once you can't 'pay to play' the jig is up...just like once you 'sign on the dotted line' - they OWN you (or ACT LIKE IT, anyway...)...and once you don't 'have the cash to pay THEIR rent' - you're DOGMEAT!

Whether you want it nice - or not...that's just THE WAY IT IS. Mind YOUR P's & Q's...the rest will take care of itself. Don't get all jumpy & goofy...relax. It's yours, learn for yourself to just do it right...no worries.

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Think about it...

***YOU haven't done ANYTHING except 'owned your land'...and NOW you are being PAID a percentage for the production (minus fees....) agreed upon by your land contract. SO - you really don't have a 'write off' of ANY kind, save the 'DEPLETION'...whether it is held in LLC, trust, or just put in the bank or your pocket. 

Tax is tax is tax - pretty basic, clear cut & dry. (The lawyers & money managers will want to 'get their BLOOD from YOUR 'stone'. - *They'll frack you good....)

...anything you can add here, Frank - or does this just about sum it all up?...

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

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 12, 2013 at 9:34am

Jin Litwinowicz - I can only hope that you are not yourself experiencing 'negative impact' of these G/O blessings.

I don't wish it for anyone. Life itself IS 'hard enough' without having to deal with the JOY (and pain, at times...) of monetary blessings.

I really think that we've all been 'bought off', bought off 'cheap' - but that's neither here nor there....

As long as YOU are happy with the outcome & it doesn't become too turbulent...then it's all ok.

EVEN IF you are of the 'diciplined' mentality, and have been habitually mindful of your financial (as well as ALL in all matters of your life...) - THIS IS a big wall to surmount mentally.

It's one thing to 'discipline, save, & address handling financial matters'...completely another to have a whole $$$ slop mashed on your plate in one shot....Royalty Tax – Discover Taxes & Rates on Oil & Gas Royalties

Leased and Producing – Guide to Royalty Ownership...

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

Permalink Reply by Jim Litwinowicz on June 14, 2013 at 6:00am

GG;  don't have any of these problems as of yet but I know people that do.  Just wanted people to be aware of these issues and plan ahead. Gettin big mullah ain't always easy. Comes with responsibility and expectations.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 14, 2013 at 9:48am

Yes, Jim - there ARE many 'mental obstacles' to surmount, but one CAN do it. Do YOU feel that you have managed things quite well - sounds like it. One also has to consider this - ARE you accustomed to 'managing' a portfolio personally?...and with THAT said - today is quite interesting, but if you are up to the task - fare thee well.

As one light lights another, not grows less - so nobleness enkindles nobleness. TRUST. 

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 12, 2013 at 10:23am

Can I Avoid Paying Taxes on Oil/Gas Payments? | Ohio Ag Manager...

Count your blessings...name them one by one...count your many blessings see what God hath done....

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

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 12, 2013 at 10:49am
Permalink Reply by rob on June 17, 2013 at 4:37am

Forest County - Does anyone have any info. for leasing in Forest County.

Thank you,

412-352-7522

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