Steven Jarvis (01:26)
Hello, everyone and welcome to the next episode of the Retirement Tax Services Podcast, Financial Professionals Edition. I’m your host, Steven Jarvis, CPA. And I’m very excited for this week’s episode because I’m the guy who constantly talks about doing the simple things consistently over time. And I’m a huge believer in that. But we all know that life doesn’t stop at the simple. And so when advisors ask me questions about more complicated areas, when taxpayers, your clients, ask me questions about more complicated areas, I love working with specialists and experts who do those kinds of things all the time. So my guest this week is Steve Blackwell, the CEO of Invito Energy Partners, who is here to talk about some of those more complicated stack strategies that we can get into and when they’re the right fit for your clients. So Steve, welcome to the show.

Steve C Blackwell (02:13)
Thanks for having me, Steve. I’m excited to be here.

Steven Jarvis (02:15)
Yeah, it’s gonna be a great conversation. You and I have had a chance to meet in person a couple of times. I’ve learned a lot about the work that you do. You’re actually gonna be at our summit this fall, which I’m really excited that you guys are gonna be there. I’m very excited for that partnership. But what we wanna talk about today is getting into some of these other tax playing strategies that go beyond the headlines of, everybody should convert to Roth. Big fan of Roth, but that’s not the only tax strategy out there. So before we dive into those nuances, Steve, just give us your background a little bit. Tell us who you are and why everyone should be excited that you’re here talking to me.

Steve C Blackwell (02:45)
Hahaha…All right, well, I’m excited, but I’ll give you a little bit of my background. So I’ve been in the oil and gas business now for about 17 years. I was the president of a company called Petromax operating where we were an upstream oil and gas company doing kind of larger projects. We would lease together, put it to about 20,000 net acres and about five different projects. So it was about 80,000 net acres. And then we sold those projects for about a billion three. So that was back when you would lease up a position, drill enough wells to de-risk it, and there was lots of ability back then to sell projects up the food chain either to other publicly traded companies or to private equity firms. So we had a really good run there and then I worked for another company where I was a COO and then a few years ago I decided to start. So all my experience has been running upstream oil gas companies, and about four or five years ago myself and my partner Jared, who ran Ops for me at Petromax who I brought with me to the other company where I was a COO decided to start a basically, Invito Energy Partners, where we invest capital primarily through our A-platforms, fee-based only RIA platforms, into the drilling of new wells, new oil gas wells. So that’s specifically what we do.

Steven Jarvis (03:53)
See, I appreciate that. Always love working with people who have hands-on experience with this stuff. If this wasn’t on a whim, like, I decided I’m going do something brand new, you should all follow along. And trust me, this is something you’ve got deep experience with so that when you talk about these things, you’re talking about them from a place of firsthand experience. I always love seeing that.

Steve C Blackwell (04:08)
My experience as an executive running upstream oil and gas operating companies. Jared is a mechanical engineer, been in the oil patch right out of college, drilled wells and, you know, he’s probably drilled over thousand wells in every major basin in over 48. Between the two of us alone, we’ve put together, put the work over $5 billion worth of capital into oil and gas and as a team, well over a billion. So a lot of experience in this space, which is important because oil and gas is a very technical business.

Steven Jarvis (04:34)
It is a very technical business and I really appreciate that your background and what you’re leading with is your expertise in that industry. You didn’t say, I’m a tax attorney and I figured something else out, a new way to shift paper around that no one’s gonna notice because, and maybe this is a little bit cynical on my part, but I get sent pitch decks constantly about new tax planning strategies that have more tax attorneys behind them than anyone else. And I get a little bit skeptical, and I have my whole list of due diligence questions that I ask and I end up passing on most of those opportunities because at the end of the day, It feels a lot more like paperwork than anything real. But you and your partner, Jared, I mean, you’re coming from very real industry experience in this area. There happens to be some tax benefits on top of this investment opportunity and top of this way to deploy capital. There’s some tax benefits to it that make it more relevant to the conversation that we’re having or the podcast that I have. There’s real world applications to what’s going on here.

Steve C Blackwell (05:27)
Yeah, mean, look, I would say at the end of the day, what we are is oil and gas guys. We’re certainly not tax people. We’re certainly not tax planners or CPAs. We’re not financial advisors. And we’re not capital raisers either. What we are is oil and gas guys who think that there is a way for retail investors, for certain retail investors, to have the opportunity to invest directly into oil and gas for multiple reasons. And part of that is the tax benefits that come along with it, which I’m sure we’ll talk about.

(05:55)
What I always lead with is this is an investment. I don’t invest for tax strategies, I invest to make money. There’s a tax thesis that comes with it, that’s obviously part of the thesis and part of the return sometimes. But at the end of the day, it’s about making money off an investment, not just a tax benefit, if that makes sense.

Steven Jarvis (06:10)
No, it totally does. I love that you said it. The way that I approach this with advisors and clients both is that we want to make good life decisions and then figure out the tax efficient ways to go about them. So whatever our goal in doing something is, if that’s investing to get a return, if that’s giving to charity to support a cause that we care about, if that’s the state we live in for the recreation or family we want to live by, whatever the life decision we’re making is, we need to make sure we remember what the primary goal was and then figure out tax efficient ways to go about them. Because even though we’re here on a podcast, I do really appreciate that you’re leading with like, hey, I’m not here because I solved every tax problem ever. It’s that this investment that you’re passionate about and you believe in because of the history that you have also happens to have some tax benefits. But I do really appreciate the transparency of like, either this is a good investment or it isn’t. And then yes, there are some tax benefits that go with it.

Steve C Blackwell (06:55)
Yeah, mean, look, it is an investment for us and 100%, I will say all day long, it’s not an investment for everybody. It is not absolutely, and the advisors that are listening, they’ll understand the language, right? It’s not suitable for everybody for multiple reasons. So, you know, those are the things you need to understand when you’re looking at it from either a direct investor prospect or if you’re an advisor thinking about it from a client perspective.

Steven Jarvis (07:13)
Well, and again, I really appreciate the framing there because not an investment advisor myself. this episode is not investment advice, just like every other episode isn’t investment advice. But one of the reasons I was really excited to have this conversation, Steve, and one of the reasons I was excited to partner with you in general this year is that over the last couple of years, I’m hearing more and more from advisors, that they’re telling me that their clients are asking for more opportunities, that their clients are asking them more questions about, it’s not that they’re trying to throw away that they’re more traditional investments that advisors tend to lead with, but they’re getting more clients who are saying, hey, I hear about this stuff I want, I wanna understand it, I wanna know if it’s the right fit for me, and so I’m getting the questions from advisors, and when I’m not an expert in something, I’m gonna be the first to admit, hey, I’m not an expert in this, and so that’s why I appreciate you’re here. So let’s talk a little bit more about for an advisor, like what types of things should they be on the lookout to know that, hey, spending time learning about what Steve’s doing and Invito Partners is worth my time to learn about.

Steve C Blackwell (08:07)
Yeah, I look, think if you’re an advisor, at the end of day one, if you’re an advisor who, as part of your strategy or your offering for clients, includes alternative assets, then this is something to understand. That’s number one. Number two, if you are an advisor who uses alts but also engages in tax strategy, which obviously that’s what your whole business is built around, right? RTS to help advisors bring that aspect to their planning, then oil and gas is something that you should be aware of how it works. I would look at it more as a tool in the tool belt, not an allocation asset, if that makes sense. a lot of alt there are certain asset classes from an alternative perspective that maybe if you’re using 20 % alts or 30 % alts, whatever your number is, you could carve off maybe two, three, four, 5 % and allocate it across the board to all your clients. And what I would say is I wouldn’t look at oil and gas like that. I would look at oil and gas more as a niche specific client tool to use for a specific client with a specific scenario that they’re trying to solve. So if you’re doing tax planning, if you offer alternative assets, then you absolutely should at least understand how oil and gas direct investments work.

Steven Jarvis (09:15)
So Steve, let’s get into that. Podcast? We’ve only got so much time. I’m sure we could go deeper. In fact, you and I are going to get together at the end of July to do a webinar that you’re hosting. So definitely mark your calendars for July 30th. More details to come. We’ll keep you posted on that. But we’ll have a longer discussion about it. But give us the short version of how does the investment side of this work? And then we’ll get into the tax-specific piece of it.

Steve C Blackwell (09:36)
Yeah, so think about it. In the oil and gas sector, it’s broken down into three categories, if you’re not familiar with it, right? It’s the upstream, downstream, and midstream side is really what energy is broken into on this side, right? So the upstream is the companies that drill the wells. Midstream is all the pipeline companies that are moving the hydrocarbons throughout the United States. And the downstream is usually the companies that have operations on the coast where they’re refining the product into whether it’s gasoline, diesel, jet fuel, or any of the fine product that most people don’t know is oil is in like, you know, 6,000 different products, right? It’s oil is pretty much in everything. And so the most common type of investment for a direct investment for a retail client is the upstream side. Okay. So if you believe in the energy sector, you could go buy a publicly traded, any one of those sector companies, right? You could buy a publicly traded, midstream company, upstream company. You could go buy an ETF. If you want to invest direct, it’s typically into the upstream side where you’re investing directly into wells. And that falls into two categories. You’re either buying what’s called working interest, which is essentially akin to equity, right? Equity in a well, we call it working interest in oil gas. Or you can buy what’s called royalty or mineral interest, okay? In either one of those, you can buy working interest or royalties in wells that are already cash flowing, or you can buy it into wells that have not been drilled yet or are not producing yet, okay? So all of those are great different ways to invest, but really quick, what working interest is in mineral interest, royalty interest.

(11:09)
Working interest, if you own a working interest in a well, let’s say you own 5 % okay. You are you are responsible 5 % of the capex or whatever it costs to drill and complete that well. Then you’re responsible for the 5 % of the monthly operating expenses that come your way, and then you receive your 5 % proportionate share of the revenue after those are paid out. If you own mineral interest, mineral interest or royalties don’t pay capex, they don’t pay the monthly operating expenses, they get paid first. So say for example there’s a million dollars of revenue a month, you would back out the lease operating expenses. Take that million dollars, if you had a 20 % royalty, $200,000 goes to the royalty owners, okay? The $800,000 that’s left then pays for the operating expenses, and what’s left over goes to the working interest owners. So royalties are a great way to invest, and they typically trade at a higher multiple because they don’t pay capex and they don’t pay hallowee, right? But there is only one of those four categories, right? Working interests or royalty interests, producing or non-producing wells that offer really significant upfront tax benefits. And that’s when you invest into working interests in wells that have not been drilled yet. And that’s specifically what we do. So, is that kind of a good overlay of how you could invest directly into the drilling of wells?

Commercial (12:23)
retirementtaxservices.com/summit

Steven Jarvis (14:16)
Yeah, I think that’s a helpful framework. This is all really interesting, because I like that you mentioned that there’s 6,000 products that have oil in them. I think a lot of people do miss that. This isn’t just, hey, do you think electric cars are going to replace gas cars in the next 10 years, and you’re going to no longer need gasoline. And that’s whole debate in and of itself, but that’s not even the whole picture. There’s…this sector impacts so many things that we do in our daily lives. But no, that’s a really helpful framework as a part to lay out how people get involved in this. Let’s kind of dive a little bit deeper into the part that you’re focused on. So I’m going to use a little bit different language just because I’m not in this every day. So you tell me if I have this wrong. But essentially, the part that you’re doing is, is this known oil reserves or are you doing exploratory things as well?

Steve C Blackwell (14:56)
Well, that’s a different subject, right? So now you’re talking about the type of investment you’re getting into. If you’re going to invest in a working interest, right, or even a royalty interest, but let’s speak specifically to working interest, then we’re talking about, what type of projects are you getting into? If you were invested into that, where is your money going? So there are kind of multiple categories of what we would call drilling prospects.

Steven Jarvis (15:17)
So even within those four categories that you talked about, there can be differences in the investments of, hey, am I getting in before we even know for sure how much oil is in the ground? Or am I getting in when we haven’t started drilling yet, but we know there’s oil down there? So these are all different stages that we could be coming in at.

Steve C Blackwell (15:32)
Yeah, I look, at the end of the day, nobody ever drills a well thinking that there isn’t oil there, right? So there’s always a geologist who says there’s oil there, right? But the spectrum of risk is that certain projects, there are certain what we would call tier three locations. Tier three drilling locations where the spectrum of returns is literally zero to a 456X, right? And anywhere in between, right? And so that’s a lot of risk when you’re drilling into a project that is what we would all tier three locations and it’s really all about data. It’s really broken down in tier one, tier two, and tier three drilling locations. And to make it really simple, if I’m looking on a map and here’s a potential drilling investment and we do a three mile radius and on a tier three location there are not gonna be any other wells within three miles that have been drilled there, right? And so that’s where you have the spectrum of return that’s all over the map. Tier two, same location, maybe four or five data points.Tier one, you’re going have dozen or more data points. And so what essentially is happening, right, is it’s more expensive to get into tier one because it’s been de-risked, but you’re essentially eliminating what we would call dry hole or uneconomical wells that could happen on a, certainly on a tier three. Tier two, you’re not going to drill a dry hole because there are hydrocarbons there, but it still could be an uneconomical well or very limited in terms of its economic viability. Because the data, when the engineer comes in and basically what a reservoir engineer does is how much is the well going to cost to drill? How much is it going to cost to operate it? And more importantly, what’s it going to produce? Well, just think about it. The more data you have, the higher the probability of those predictions coming true or the statistical variance starts to shrink dramatically when you have more data points relatively close to where you’re investing.

(17:19)
So again, you would need to know and understand where your money’s going and what type of projects they’re going into so that you have a proper expectation of what could happen. Tier 3, you might end up with zero or you could end up with a fantastic one.

Steven Jravis (17:33)
So Steve, before we get into potential tax benefits of this type of investing, I want to take a step back for just a second because believe it or not, in a previous life, I actually have some experience working in the natural resources industry, not specifically oil and gas, but at least some of this terminology is not, not the first time I’m hearing it. Like conceptually, I get how some of this works for an advisor who’s brand new to natural resources, to oil and gas, to some of this stuff that we’re talking about. There can certainly be the reaction of geez, like Steve just rattled off all of these things. I’ve never heard of before. There’s no way I can ever get my client, get myself comfortable with what the heck even going on, let alone my client. Like how do you talk to advisors who are brand new to this as far as just helping them understand here’s what it takes to get to a level of understanding that you feel comfortable recommending this?

Steve C Blackwell (18:15)
I mean, look, at the end of the day, you kind of part of this conversation, we start with the macro. Well, how do you invest and what is that you are investing into? And then we spend a decent amount of time on at least from our perspective, right? Innito’s perspective. But when we started this company, at the end of the day, if you’re going to start an oil and gas company and you’re going to have to figure out where you get your capital from. So I could have went the traditional way, went back to private equity, institutional money. When we decided to go this route, right, which was raise capital through RIAs, fee-based RIAs, we don’t work on broker-dealer platforms, the number one conversation they have as we were interviewing people and considering this is don’t lose my client’s money, right? Don’t lose my client’s money. I don’t want to have that conversation. I don’t want you to potentially lose my client. I gave you money and all they got back was a tax break or they got 50 cents on the dollar. Right? So tier three, two and one, it is absolutely normal for every oil and gas company to be allocating capital to all three of those. Right? Because if you’re not, it’s like R&D money. If you’re not putting money towards finding new projects and moving them up, you’ll eventually run out of tier one locations where you make the majority of your cashflow. When I was the president of Petromax, every project we started was a tier three. Luckily we had five that worked really well.

(19:27)
And so we spend a lot of time explaining how we manage the downside risk. In essence, we don’t participate in tier three or tier two, right? We also don’t put any leverage. We underwrite the operators. We explain how we are managing that downside risk. Now we’re giving up some of that upside. We’re not gonna get five, six, six deals, right? Which is fine, right? But you have to be able to articulate to someone how that risk is managed. And if you think about it purely from a data, most people understand data, right? All the difference between three, two, and one is somebody else has already drilled a bunch of wells right around you and has de-risked it for you. And they’ve spent hundreds of millions of dollars, if not billions of dollars in an area to prove it up.

(20:13)
And so you’re leveraging that by taking, we get to leverage that by investing alongside them. Cause all that we do at InVito is invest primarily into the wells that are being drilled by the other E&P companies, the larger E&P companies in United States. So as an investor with us, you could be literally putting your money into a well that’s being drilled by EOG, right? For example, who’s one of the larger E&P companies in the United States. They’re spending $10 million on one well. Your $100,000 is getting to go in there as well. You know, cause all we do is invest into horizontal wells and the oil in the seven major oil basins in the United States. And so probably heard the term horizontal drilling and fracking, and I’m sure everybody’s heard fracking, right? So everything that we do specifically for us, is go into those type of projects. And why do we do that? Well, all of the money from the big E&P companies has moved into horizontal drilling and fracking because it has what’s called the, it gets rid of what’s called statistical variance from old school vertical drilling, right? So vertical wells, you you’re poking a hole in the ground and you’re trying to hit a sweet spot. And so, you know, the variance between one well to the other could be massive in terms of what they produced. When you drill a horizontal well, you’re essentially with one well board drilling, you know, 40, 50 vertical wells.

(21:20)
And so it eliminates that statistical variance and it gives what’s called a repeatability factor to it. That’s where all the big money’s moved. And once again, if you don’t want to, it’s okay to do high risk geological projects as long as you understand that’s what you’re getting into, right? If you want to shoot for the home runs and you’re okay with losing your money or all your money or a big portion of your money, more power to you. But that’s not a game RIAs want to play, that’s for sure.

Steven Jarvis (21:43)
Yeah. Yeah. So Steve, so advisors surely be thinking about this as, am I already or am I interested in doing all investments? I’m willing to learn more and partner someone to figure out how this works specifically in oil and gas. And I don’t want to go figure this out myself because I think you’ve already illustrated that somebody starting from ground zero and trying to think, I’m going to go set up my own oil and gas fund. I’ve got no experience with this. That’s probably not in the cards. And then you mentioned before, but then there’s also once we’ve sorted out those pieces, there’s also this potential tax planning benefit. So let’s get into that a little bit more. Again, we really love that you’re reinforcing, first and foremost, this is an investment, but talk to me about the tax piece of it.

Steve C Blackwell (22:15)
Yeah, so look, at the end of the day, let’s be honest. Everybody comes to oil and gas initially for the tax benefits. That’s what they’re unbelievable. They’re extremely unique, unbelievable tax benefits. So all advisors or CPAs that bring us clients are all coming because of the tax benefits. What you hear me doing is hammering home, look, the tax side of it’s given. We’re going to set that up correctly. That’s not hard to do. You’re going to get the tax benefits. But if you don’t make money on the investment, what was the point? Right. And so, you know, the way the tax benefits work, which have been in place for decades. So the important part about this is it’s not on the dirty dozen list of the IRS. You know, there’s tons of case law. These have been around for decades. Because you know how this works. What does Congress do? Congress is telling you where to put your money, right? Because they use the tax code to incentivize capital to flow to certain areas.

(23:05)
And so I’m old enough to remember the 70s when we had long lines to get gas or the oil embargoes. And you know, the United States up until 25 years ago was about three to five million barrels a day of production of oil. The United States consumes over 20 million barrels a day. Okay, so we were extremely dependent on foreign oil and up until really the last 25 years and so these codes were put in place to incentivize capital to go to the development of hydrocarbons in United States. And the big one is what’s called the IDC deduction. That’s the term you’ll hear a lot, which stands for intangible drilling cost, which is section 263C of the code. Okay. And essentially what it’s saying is that you can take a hundred percent of the intangible drilling costs and take them as a loss in the year of investment. Okay. Great. Well, what’s an intangible drilling cost? So an intangible drilling cost is anything that goes into the ground to drill that well that has no salvage value when the well is done. Most wells will produce for 20 to 30 years, right? That’s how the IRS defines an IDC.

(24:10)
Typically, the IDCs make up 75 to 85 % of the total cost of a well. So what does that mean? If you put in $100,000 in your IDCs in the year of investment, say for example for us, our K1s last year for 2024, the IDCs were 80 % or like 80.1%. If you put in $100,000 on your line 13 of your
K1, you’re gonna have an $80,000 loss, okay? That loss flows through the Schedule E into year 1040, but here’s the home run, okay? This is 100 % a passive investment. But there is an exception in the IRS passive active rules specifically for working interest into new wells that says that you can take that loss and offset it against ordinary income. There’s the home run. That’s why everybody’s coming here. Because as you know better than I, what are the other alternatives? Well, there’s real estate, right? Go get yourself a cost-stake study, but then you have to prove that you’re real estate professional. Or you can do short-term rentals, but then you still have to prove material participation, and you still have to get a cost-stake study. So oil and gas, you just make the investment. The only caveat, the only way you do this is all of these will set up the same. They’re set up as limited partnerships. You come into the fund as a general partner while the wells are being drilled, and once they’re drilled, you convert to a limited partner, which is an automatic conversion of the partnership agreement, which will happen somewhere between month 12 and month 16. That, per the IRS, gives you the ability to take that loss and offset your ordinary income. So this is, you you take all your other deductions, whatever your AGI is, and say you had a half a million, just to make the numbers easy, you a half a million dollars of AGI, put in 100 grand, you got 80,000 in losses, now you have $420,000 of taxable income.

(25:28)
So it also offset state taxes for most states. California is not one of those. They changed that last year. Surprising, it’ll offset federal and state in most places. Obviously, I’m in Texas. We don’t have state taxes. And so that’s the big, big home run in the initial, what’s called the IDC deduction. You’ll hear these funds called IDC funds, and that’s what they’re referring to. So before I move on, any questions on that?

Steven Jarvis (26:23)
Yeah. Well, Steve, I really appreciate that. That’s such a great, I mean, for a complicated topic, it’s a great short synopsis of here’s how this works. There’s a couple of things I want to highlight in there to draw some distinctions because I definitely am at times critical of things that get pitched strictly as a tax planning strategy, which again, we’ve already acknowledged that. You’re not leading with tax planning. This is an investment that happens to have some tax benefits, but you highlighted in there. This is a long-standing tax plan opportunity that has court cases behind it. And while I’m a fan of talking about how there’s no logic in the tax code, what I mean by that is, usually on its face that we’ve, what we’ve got to do. And you’ve already gone back this layer for us of, let’s look at what was the motivation by Congress behind this tax rule, because every tax rule has a behavior they’re trying to incentivize. And to your point, this was intentionally set up to try to incentivize capital investments in the United States around oil and gas. And so this isn’t like some of the other things that you hear about that the IRS is starting to crack down on and you’re getting more court cases where the IRS is saying, hey, that was never really what was intended there. You’re using it incorrectly. What you’re describing is exactly what the rule was intended to do, which is incentivize investments in the oil and gas industry. So unlike other investments where there’s no upfront tax benefit because that just goes into your basis or talking about real estate that we’ve got other hoops to jump through. There is still some aspect of this that is the timing of when the taxes are gonna happen because if we offset my basis upfront with losses, at some point as I get a return on capital, we’re gonna pay taxes on the money I make. But now we’ve got an investment we can make that will offset ordinary income, which to your point is very unique in how that’s set up.

(28:05)
I’ll also just say that this is the kind of thing that, again, I love hearing about your background in this because if, as an advisor, if you’re going to get into this, you want to get into this with people who are doing this all the time and have their docs in a row. When I go out to the Invito website, I mean, you’re listing the accounting firm that you’re working with on this to make sure all the documentation’s correct, make sure the partnerships are setting up correctly, you’ve got people like yourself and Jared who’ve got extensive industry experience, you’ve got a geologist on there, like this isn’t shuffling paperwork, to hopefully get a tax benefit and to hope the IRS doesn’t notice, this is a well established strategy for getting a tax benefit as we set up an investment.

Steve C Blackwell (28:38)
Yeah, like I always say, the tax benefit is a given if it’s just set up right, which is not hard to do. And it’s unbelievable. mean…Think about this, when we talked about who, who, if I’m an advisor, right, if I have as part of my book of business, right, clients, especially high W-2 clients, right, so if I got a base of clients that are high earners that have W-2 incomes, you know, they’re very limited in what they can do. Oil and gas is fantastic. We have a ton of high earning clients like people in tech, doctors, dentists, so on and so forth, right, or just business owners, self-employed business owners are 1099, folks who have written off everything they can, they’re just making a bunch of money. So at the end of the day, your book, if you have, don’t call it high net worth, I call it high earners. If you have a book of business, this is the 506c offering, so it is for accredited investors only, but if part of your book of business is people who have a lot of recurring income, high recurring income, this is a great strategy to make them aware of and consider as part of their strategy, right? Obviously for the one-time events, it can fit as well.

(29:42)
Someone exercises a bunch of stock, they sell an asset, for whatever reason they get to sell a business, they get a bunch of income at once, you can use this as well. But the most bang for your buck is offsetting that ordinary income that comes from their job, their business, or their job. That part is, again, if they’re sitting in there and they’re hearing this conversation, either you have clients like that and if you aren’t talking to them about this, make sure you are so someone else doesn’t talk to them about it. Or two, if you are trying to attract clients like this, right, this is a great way to attract clients. Whether or not they ever invest in it isn’t the point. But bringing something different. How do you differentiate yourself? And I’m speaking it from an experience as the other side. Because I moved my money from one advisor to the next twice now because of the opportunities that was being brought by that new advisor. Right? First advisor was bringing me nothing but mutual funds. This is a long time ago. And next thing you know, I get invited to a dinner. I’m getting into, you know, a hedge fund and a Blackstone private equity deal and I’m like, you know, these other guys don’t bring any of this to the table. Right? I move my money.

(30:45)
I ended up at Morgan Stanley. Then I ended up moving my money over to another firm because they were even bringing more things to the table. So, now, retaining your clients, winning new clients, obviously we want them to invest, but if they don’t invest, the point is you’re still bringing something different to the table. I think it makes a big difference. And again, the tax part of it’s a given. The investment side of it is why the experience of the sponsor, especially in oil gas, is so important.

Steven Jarvis(31:10)
Well, Steve, I think that’s a great point to wrap up on because to your point, whether they invest or not, this is out there, your clients, either have questions on it now or they’re going to come across it at some point and will have questions on it. And the better you can articulate how this stuff works and whether or not it’s a great fit for them, the more value you’re bringing to the table. Steve, again, we really appreciate your partnership with us. For everybody listening, you can go out to retirementtaxservices.com/invito. That’s I-N-V-I-T-O. And give us your information. We’ll get you, Steve has a great e-book, that covers this topic. We’ll get you that for free to make sure that you can start learning more about how this works and how it fits for your clients. And Steve has also generously offered to do 15-minute consultations with people in our audience. So we’ll get you the information to do that as well. Because if you have clients that fit that profile that Steve’s talking about, this is at least something you need to understand, even if it’s not something you’re ready yet to recommend. So go out to retirementtaxservices.com/invito to start learning more to do this due diligence on behalf of your clients.

Steve C Blackwell (32:09)
And I appreciate that because obviously there’s actually more tax benefits than just the ones we talked about. we could talk about that in a consultation or we’re going to do the class at the end of July, which will be a CE class and we’ll go into a lot of detail in that particular CE class on all the tax benefits because there’s additional tax write-offs up front and there’s tax benefits to the cash flow comes your way as well. A lot of additional things to learn about as well that we’d be happy to, that along or come join the CE class and get some CE credits out of the way.

Steven Jarvis (32:37)
Love it. Steve, thanks so much for your time and your expertise. Looking forward to the other things that we already have planned together and for everyone listening. Until next time, good luck out there. Go out to retirementtaxservices.com/invito, and until next time, remember to tip your server, not the IRS.