The 5 Myths Of Investing In Oil Wells

 


Oil seems to be present in every body in the mind lately both in a positive sense and in a negative sense, but no matter what one thinks of the oil industry it is the # 1 most efficient energy source in the world. And if we did not have it, we would still be riding horses and buggies or cycling to and from work.


The oil industry has always had an unmistakable aura in the fact that it just pops out of the ground and the thoughts of Jed shooting down Beverly Hillbillies and coming out of the ground. Of course this is not the case, but it does make a good story.



First I want to reveal that I come from a family that was born and raised in Southern Illinois making a living by working in the oil industry by digging and servicing oil resources. I know people do not know that there are things like oil wells in Illinois, but there are about 650 oil fields and 30,000 oil wells in the province. It is a dirty business and not many people want to do this kind of work, but we are all grateful for the people who chose to work in this industry.


When most people think of investing in oil wells they think of dry wells and dishonest people like Snidely Whiplash who hide weeds waiting to eat another investor who is accused of money hanging in their pockets. Also, another myth. The fact of investing in oil resources is that with this type of investment you can at least visit the source area and see where your money has been invested and talk to the investor you have invested in and find out if the situation is good or bad. . This is not the case when investing in stock markets or mutual funds. And that's why I wrote the article "   5 Oil Planting Tales"



Relax, you enjoyed the trip and I hope I have shared some information that will help you in some way:


Myth # 1 - 

You can lose all your money.

Fact - Depending on how you want to manage your money. In fact, the money you invest in an oil business is different from the money you invest in the stock market or in the purchase of real estate. When someone invests in the stock market or in real estate they are investing in "post" tax dollars. This means that they use the rest of the money after paying the tax due on the money they earned to make the investment. However, if a person invests in an oil well, he or she is given special treatment from the federal government in the form of tangible and intangible investment grants. What this means is that if you invest $ 25,000.00 in an oil well you will be allowed to cancel or deduct the intangible amount of your investment in your annual income 60% to 75% of your investment can be canceled. your personal income) for the year you are investing. You will never really lose all your money, because it has never been your money in the first place. The government would get a portion of your income whether you invest in an oil well or not. They would usually get between 35% and 40% of your salary anyway. So when you invest in an oil well you are spending some of your money and half of government money.


Myth # 2 -

 It is more profitable to buy stock in Exxon or a large oil company from my stockbroker than to invest in an oil well.

Fact - When you buy stock from a stockbroker or online you are actually buying a small portion of a large company with millions of different pieces. There is comfort in knowing that it is the largest asset organization in the world, but it also comes with a huge overhead that should be supported. When a person buys stock in such a large company with its overhead it takes a whole year in the market for a person to make a big profit, and he buys stock with "tax" dollars to get only 60% to 70% of his income. You already have lost most of your purchasing power before you start. When you invest in an oil well it is called “Direct Participation” and that is what happens. You are directly planting one oil well or a group of oil wells. Your investment is more focused on oil production than on big business. Your investment will have the potential to grow faster and faster if it is focused instead of being thrown into a larger group where it is used to run a machine.


Myth # 3 -

 Many oil wells are a dry well. They get oil only from 1 in 10 wells dug.

Fact - There are different types of drilling when it comes to getting oil. The way most people have ever heard of "Wildcatting". That was the subject of a talk show on Dallas TV shows and other films about oil wells when a boy went in and out and out.


Myth # 4 - 

If someone gives you a chance to invest in an oil well it is a scam.

Fact - The best way to find out if you have a good investment opportunity is to do research. This is usually why people who buy stocks and investments in a real estate or online service have heard about it, because they are not really willing to do research. The investment representative will ask them for their risk tolerance and take their money and invest it. Low risk. A small refund.



Myth # 5 - 

I know the only reason I was asked to invest in an oil well was because they knew it would not be a good source.

Fact - If anyone really knew how much oil oil could be mined before it was mined do you think they would be asking you to invest? Neither knows. And I mean no one knows how much oil oil will produce. When a project is based on developmental ballot it is easy to get an idea and a possible scope.

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