Stilwell 5-98-2c

Oil & Gas Investment Marketing Strategies

Don't Let Your Clients Be Left Out in the Cold

By Jeanne C. Stilwell

This is a tip from one marketing professional to another. Here is a marketing strategy that is working for me. You might like to try it with your clients.

The "Roth IRA" is "hot". That is all anyone is talking about. Kudos to Congress! The question is, do your clients even qualify? There are other wonderful tax benefits as well. Be careful, however, which one(s) you suggest. For example, if your client is married, eligibility to contribute to a Roth IRA is phased out as AGI (adjusted gross income as calculated for federal income tax purposes) rises above $150,000. Converting established IRA's to Roth IRA's phases out if your client's AGI exceeds $100,000.

Don't lose the opportunity that the 1997 tax law change made available to your clients in 1998 that may not be there in the future. A drilling energy investment (intangible drilling cost deduction will reduce the AGI and possibly move your client to qualify for Roth IRA, Education IRA, Child Tax Credit, or Education Tax Credit. By reducing your client's AGI through an intangible drilling cost deduction, your client may also be able to fully deduct charitable gifts or avoid loss of "earned" exemptions for a husband, wife, kids, mother-in-law and others. For example, if the investment in a public energy program is $10,000 and the tax deductible part of that investment is 90% of the investment, the AGI can often be lowered (depending upon whether or not the client is subject to the Alternative Minimum Tax) by $9,000. It is that simple.

Remember the golden rule:

"In presenting any marketing strategy, strongly urge your clients to check with their financial advisors to see how this marketing concept fits in their current situation."

One of the most highly regarded Financial Planners in the industry, Jack W. Everett, CFP, Roseville, CA, once said:

"A word of caution. Don't invest with somebody who called you on the phone, dialing for dollars. I have seen many clients lose money in this type of investment to promoters who were great money raisers, but poor drillers and operators. Look for proven (long term) track records of management, publicly owned companies whose financial statements are audited and can be verified with diversified portfolio of many wells being drilled."

Also, remind your client to carefully read the Prospectus/Offering Memorandum.

This is neither an offer to sell nor a solicitation of an offer to buy any investment. Any offering is made by prospectus only in states which have authorized the sale of any particular offering and only from securities dealers who may lawfully offer the particular security in such states.

Editor's Note:

Jeanne Stilwell brings to this Newsletter a wealth of knowledge and experience concerning oil and gas investment, its evaluation and marketing, gained over 22 years. For questions, call Jeanne at (800) 362-4590.

Editor's Note:

For more information about the Roth IRA and its tax and economic implications, see Phil Stenger and Dave Tutas' article "A Roth IRA Primer," in the "Taxation and Securities Laws" portion of this issue of the Newsletter.

If you are having problems printing this article, click on a portion of the text of the document. Clicking on any portion of the text will make the "frame" active and printable.

"Lewis Mosburg's OIL & GAS NEWSLETTER"™ and "Lewis Mosburg's OIL & GAS PRIMERS"™ are trademarks of Lewis G. Mosburg, Jr.