Comments on: Royalty Trusts – Get Paid Royalties w/o Paying (Much) Taxes

By: Jim

Jim — Wed, 01 Apr 2009 14:18:27 +0000

Royaltytrustdummy: Energy royalty trusts have many unique risks. Among these is a limited life expectancy (or estimated reserves). When you buy energy royalty trust shares, you are effectively buying shares in an oil or gas field. In that field, there is a limited supply of oil or gas that is slowly being pumped out of the ground and sold. As the reserves are depleted, the share value will slowly decrease. However, many trusts regularly try to increase their holdings, which will in turn increase the estimated reserves.

Another risk is that the trust can stop paying dividends at any time. For example, in 2006 a trust that was invested heavily in offshore oil wells suspended dividends in order to redirect the cash to repairs due to hurricane damage.

I am invested heavily in energy trusts and will continue to be for the forseeable future. If you choose to do so, just be aware of the risks.

Jim

By: royaltytrustdummy

royaltytrustdummy — Mon, 04 Feb 2008 20:33:27 +0000

I’m a rookie regarding royalty trusts, so please bear with me if my questions seem a little dumb.
I asked a question of an oil/gas trustee regarding the expected life of their proven reserves, and they replied that it was estimated at 9 years. Shouldn’t I be looking for a trust that has a longer proven reserve life?
thanks,
Dummy

By: Kathie

Kathie — Sat, 17 Nov 2007 16:16:28 +0000

So glad I discovered your site. It was thru a Google search for monthly paying hi yield investments. I’ll be a regular!

Many thanks,
Kathie

By: Frugal

Frugal — Mon, 02 Oct 2006 21:28:16 +0000

Thanks. I’m glad that my time spent was worthwhile for you.

By: Duke

Duke — Mon, 02 Oct 2006 20:05:56 +0000

Great site ! Very informative