By: Steve Miles
In the past, investing in the oil and gas industry was nearly impossible for the passive investor. It took a solid understanding of the industry, vetting operators and companies, and much diversification to avoid putting all your eggs in one basket.
However, Brent Franklin changed everything when he started his wealth management company, Rise Capital.
After working as a laborer in the industry, Brent started investing in promising assets that needed some, as he puts it, “TLC” (Tender Loving Care).
He hoped to fix and ramp up production to dramatically increase his initial investment, but things didn’t go as planned. He explains: “We were lied to by operators, taken advantage of by service companies who gave us quotes and then ran up large bills, expecting us to pay them.”
In other words, it was a mess. But, there was a lot of investing potential, so he pushed forward and eventually learned the ins and outs of the industry. Realizing that he could simplify the process for other investors, he started Rise Capital.
The idea was to create investment opportunities for passive investors. In his words: “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 continues: “We’ve made it super easy. You don’t have to do the due diligence. You don’t have to worry about the fulfillment. You don’t have to try to worry about dry wells or something not working out.”
This investing model is new in the industry and allows for opportunities that the average investor would never have had access to.
Furthermore, Brent emphasized the importance of diversification, which is why his wealth management company was set up to allow investors to pick and choose their investments from pre-vetted companies. In his words:
We have several options for [investors] to participate and diversify across the energy platform, all from one central hub that nobody’s ever offered. It’s always been a blind pool or one independent deal, but this is the mothership for people who want to invest in oil and gas, who don’t know where to get started, and who don’t want to be taken advantage of by oil and gas companies or promoters.
The numerous tax benefits make investing in the oil and gas industries worthwhile. High-earners can see anywhere between 32% to 37% of their income go to taxes. As such, many are looking for investment opportunities that will alleviate some of their tax burden.
Investors in the oil and gas industry can write off up to 100% of tangible costs and benefit from a unique tax benefit that allows them to write off intangible drilling costs (IDCs).
A $200,000 investment could mean $75,000 in tax savings. In addition, gas and oil investments offer monthly dividends, allowing what would have gone to taxes to generate wealth.
Since its inception, Rise Capital has seen success after success. In one example, the company bought an underperforming property, producing four barrels daily. Once more rigs were added, the number rose to 60 barrels daily, generating a massive ROI.
Ultimately, after navigating numerous hurdles, Brent Franklin created investment opportunities for passive investors that changed how investing was done in the oil and gas industry. The result is the ability to diversify investments in pre-vetted companies, receive major tax breaks, and do it all from the comfort of a couch.
Published by: Khy Talara
