Increasing Demand for Oil & Gas Creates an Excellent Investment
Oil is one of the most important resources of modern life. Without it, industrial civilization would have never been possible. We always hear about our ‘dependency’ on oil. We’re not dependent – we’re addicted.
Although much effort has been put into exploring alternative energy sources, the reality is that there is currently no realistic energy substitute for oil.
Beyond our predominant need for gasoline to run our cars and heating oil for our homes, petrochemicals are vital ingredients in a majority of what we eat, use, and wear. Tires, pesticides, fertilizers, detergents, food additives, nail polish, lipstick, and pillows are all among the essential products that require oil in order to manufacture them.
Although the United States is the third largest oil producer in the world (8%), we’re also the single largest consumer, at 25% of the global oil consumption. Amidst increasing U.S. demand, and current trends in less local oil production, the United States is becoming more and more dependent on foreign oil imports, whose supplies and production are also steadily decreasing.
This dependency on foreign nations makes us increasingly vulnerable. In order to break the chains of our dependency, simple economics dictates that we either reduce our nationwide oil consumption . . . or we increase domestic production. The last choice is definitely the most viable.
As global demand for oil continues to increase and worldwide production steadily declines, investing in oil and natural gas with a self-directed IRA could be an effective use of your dollars over time. The benefits are two-fold – positive tax incentives as well as the increased value of your stake in an oil-producing drilling project.
In 1990, the U.S. Congress passed laws to provide tax incentives for private investors who put their money into natural gas and oil. Although many critics (usually those who are not investing) call these tax incentives ‘loopholes’, they are legal tax advantages designed by our U.S. government to encourage participation in oil and gas ventures. They also make gas & oil some of the best tax-advantaged investments available.
In today’s economic environment of fluctuating stock prices and failing businesses, maintaining a strong investment portfolio can be challenging. Fortunately, oil & gas profits are not usually affected by interest rates or stock prices. The negative daily news that tends to drive stock prices down also tends to drive oil and gas prices higher.
Therefore, oil and gas investments are consequently a perfect hedge against inflation, as well as a primary source of income and profits. A self-directed IRA investing in oil & gas ventures is an excellent way of consistently contributing to a smart, long-term investment.