Why Energy Investments Are Powering the Next Wave of Wealth

0:00Delicious spring gatherings start at Whole Foods Market. Shop the Spring and Bloom sales event with yellow sales signs throughout the store and serve your loved ones Whole Foods Market seafood. Always responsibly farmed or sustainable while caught. Explore vibrant seasonal flavors like their trending mango yuzu chantilly cake. Great for brunch or an after dinner treat. Speaking of brunch, check out their deviled eggs, cold pressed juices and more. Spring is in bloom now at Whole Foods Market. Hey y 'all, it's Kelly Clarkson with Wayfair, where delivery and setup are as easy as a few taps on your phone.

0:36Picture this. You're relaxing in an old hammock, scrolling Wayfair's app when you spot it. A brand new patio set. Next thing you know, Wayfair delivers it right to your patio and sets it up. Oh, you need a new grill too? Alright, Wayfair's got you covered. With Wayfair's room of choice delivery and fast expert setup on qualifying orders, life gets a little easier. Visit Wayfair.com or the Wayfair app. Way fair, every style, every home. This is the Rich Dad Radio Show. The good news and bad news about money. Here's Robert Kiyosaki. Hello, hello, hello. Robert Kiyosaki, the Rich Dad Radio Show. The good news and bad news about money.

1:14This guy here, my friend, Donald Trump, put two books together. We're supposed to do three, but he called me up and says, hey, Robert, I can't do the third book because I'm running for president. I said, good luck. Now, Trump is out there doing things that I think are interesting, like bombing Venezuela, all this stuff. It's causing ripples throughout the world. And so our guest today is Michael Maselli for full disclosure. I have been investing with Michael for 20-something, 30-something years now, and he's an oil man. More than that is, I don't like, I went to Vietnam twice as a Marine. Don't recommend it.

2:01And another guest is Tom Wheelwright, because everything I do is taxes. Everything we do has to do with taxes. So Tom's going to be on board right now because taxes are communist. As Karl Marx said, the graduating income tax is essential for the spread of communism. and America was found as a tax-free nation, 1773, Boston Tea Party. So today we have a lot of things going on in the world. My friend Donald is bombing Venezuela. I don't like war, but we have a war going on in Ukraine, the Holy Wars of the Middle East, and now Venezuela. So welcome to the program, Michael and Tom. Thank you very much, Robert.

2:48Thanks for having us, Robert. Kevin, to leave me a background on your REI Energy. You drove for oil in the United States, right? Yeah. In fact, I started in the oil and gas business, I guess, in 1978. Started working with a company called Tennessee Gas in the summers. I moved to Texas in 1980. Worked for some small independents. I've drilled domestically, internationally, onshore, offshore, pretty much all facets of the business. Had a 2 million acre concession in Argentina. So I'm familiar with drilling in South America, not necessarily Venezuela, but I have been involved in that part of the business before.

3:31Okay. And Tom, give us your background. Tom is my tax advisor. He's author of Tax-Free Wealth. And everything we do involves taxes. in spite of the fact that America was founded as a tax-free nation in 1773. And Marx was very pro-taxes. So, Tom, give us your little bit of background. That is true. So, I've been in the tax business for 45 years. I spent seven years with Ernst & Young, including three years in the National Tax Office in D.C. I spent four years with a Fortune 500 company as their in-house tax advisor. And the last 30-some odd years, I've been building, buying, selling CPA firms and developing now a franchise of CPA firms around the U.S.

4:18And it's very exciting times in the tax world. Good news is taxes pretty much stay the same. They're a series of incentives for investors and business owners. The incentives change with the administrations, but they're still incentives. I mean, everybody's hoping AI is going to take care of taxes, but I don't think that's going to come for a while. Well, I have some clients who think that AI has all the answers and they keep getting wrong answers. So maybe not such a good idea.

4:51Anyway, so for full disclosure, I invest with Michael Maselli. Every month I get a check. I've been investing with Michael for a long time, an oil guy. Believe it or not, my background is oil. I went to the U.S. Merchant Marine Academy at Kings Point, New York, and I specialized in oil. I'm an oil—I drove tankers for Standard Oil of California. I was up in Valdez, Alaska, when that other idiot from another maritime school, New York Maritime, struck the reef up there and pulled it into one of the most beautiful environments in the world. Everybody gets anti-oil. But it was Fort Scholar, New York, not Kings Point, that hit that reef.

5:34They can't navigate. That's their problem. But anyway, oil is essential. And Tom's going to tell the difference between investing in real estate sometimes versus oil because they have different tax advantages. So, Michael, when Trump, my buddy here, bombed Venezuela, was that because he loves peace and all that? What is he up to? Well, you know, President Trump, he's always got an ulterior motive, right? He's a businessman. So if he can have a chance, and this was a legal chance, obviously. He had the right to go in and nab the dictator, and he gave him every chance to get out. But if he can grab a hold of the world's largest oil reserves and have control of it, I think that had to be an ulterior motive in the back of his mind.

6:29did it said he pissed at china for buying venezuelan oil yeah there were some you know pretty bad actors in there from what i read uh you know china of course was well i think the day that he bombed the day that he snatched maduro they were having a meeting with the chinese and the delegation and then of course you know iran had a big proxy there they were obviously you pumping drugs into trying to dismantle America. I mean, I think all the bad actors that want to see America fail, they were using Venezuela to kind of as a staging point. Yeah, but not only that, on the macro world, in 1974, a guy named Kissinger went to Saudi Arabia because we came off the gold standard in 71.

7:21So we needed to back up the dollar. So in 74, the dollar became the petrodollar. So every barrel of oil that was sold throughout the world wasn't backed by gold, backed by oil. And just, I think, this year, Saudi Arabia did not renew that license. So Saudi Arabia is not in good graces with Trump. And so Maduro is out there pumping oil, selling it to China. And so they're bringing drugs into America. So Trump makes sure the cameras are rolling as he bombs these poor suckers driving drug boats. And killing all those drug guys is causing a big problem in America. Because Tom and Michael know my doctor, Dr.

8:09Gopalan. He says the fentanyl trade from China has provided a lot of heart transplant patients. But anyway, let's get back to oil. Tom, what are the advantages that I have for investing in oil? with. Well, they're huge tax incentives. I mean, in fact, we've had tax incentives for oil since the 1970s. And the biggest one, of course, is every dollar you invest with Mike, you're going to get about an 80 % to 90 % deduction in the very first year with a combination of intangible drilling cost deduction, which is everything but the equipment. Plus now we have bonus depreciation. So now we have, you get two deductions right off the bat.

8:52And on top of that, the income, that cash flow you're getting in, only 85 % of it is taxable. So there's a 15 % off the top right off. So as opposed to, let's say you get a dividend from Standard Oil, right? That's subject to tax. 100 % of it is subject to tax, whereas your oil dividend, your oil cash flow from one of Mike's wells is only 85 % of it is taxed. So huge tax benefits going in and coming out. It's one of the big differences between actually oil and real estate is that anybody can get into oil and they can get that deduction. They don't have to have any participation whatsoever other than investment.

9:42Yeah. And for most people, when they invest in oil, they invest in an oil company like Standard Oil. Right. Do they get the same benefits if I invested in a 401k or RRSP in Standard Oil? No, not at all. In fact, when that income eventually comes out, you're going to be taxed at ordinary income rates with no tax benefit whatsoever. Yeah. And I'm going to say something really quickly. We're not an investment company. We're not advisors. You should always check with your accountant and your attorney before doing anything, all this. And it's a big difference between tax avoidance and tax evasion. Correct.

10:22What's the difference between tax avoidance and tax evasion? 10 to 20 years in prison. So tax avoidance is legal. It's expected and it's actually encouraged. So this is, you know, people don't understand this. It's actually encouraged. We call them incentives, right? So you're incentivized to put money into oil that you might otherwise put somewhere else because oil is a little riskier than maybe some other investments. And so because in order to help you offset that risk, the government gives you this big deduction, which for you can be worth as much as 40 cents on the dollar of investment. So like you're putting in 60%, the government's putting in 40 % of the investment, and then you're only taxed on 85 % of the income.

11:11I mean, from a tax standpoint, oil and gas is the sweetest deal. Yeah. So again, you should check with your investment advisor. And if you have a 401k, we'll pray for you tonight because you can't use what Michael puts up there. So Michael, why else do you think, what is happening with Venezuela? I mean, not only drugs, which is good, but what do you think is going to happen with we take Venezuela as a 50 for a state? Well, you know, I mean, most of our refineries, I guess, on the Gulf Coast were originally built to handle Venezuelan crude. I mean, Venezuelan crude is a very heavy crude. Crude is usually based like sweet crude.

12:00is called 42 gravity crude, which is a light crude. In Venezuela, crude is anywhere from 8 to 12 gravity. So they would bring that oil into the Gulf Coast, into those refineries. And of course, they would mix it with our crude here, which would bring the gravity up and make it more valuable to make gasoline and other products. So I think one of the things that, you know, of course, when the first dictator took over, they nationalized the oil business and kicked a lot of the countries out companies out and according to trump and them i mean they they owe billions they owe the u.s billions and billions of dollars and and uh so they're they're going to try to you know reclaim that oil and and of course get that money back so you know i think in the long run that's what the big picture is is to try to stabilize our continent here in South America and then also keep China and Russia and those countries that are not friendly to America out.

13:03So I think in the long picture, that's kind of what the administration is trying to do. Yeah. If you raise the price of oil to China, and China's in serious financial condition right now, you raise the prices, that makes it harder for the Chinese to sell products to America. So Trump's doing this for many reasons. Final question before I go for the break. Tom, if I have a 401k, can I invest with Mike Maselli in oil? That's a question for Mike, whether he take your investment. But the better question is, should you? And my answer is absolutely not. You lose all the tax benefits if you invest with Mike through your 401k.

13:45And I agree with that. I mean, obviously, we try to discourage that because, like Tom said, there are no benefits of going through your 401k. And once or twice with Michael, we've hit dry wells. Yeah. And that's bugging our tax pay for that, right, Tom? You do. Of course, you get a full write-off for that. So anyway, that's the problem with going to school and getting a job and getting a 401k. You have to invest in oil. That's not the best for your benefit. When we come back, we're talking more about oil and Trump. Going to annex Greenland, the Gulf of America. It's now the Gulf of Mexico, the Gulf of America.

14:29And he's going to annex Canada because Canada has lots of oil. I mean, Trump is my good friend. His sons, Don Jr. and Eric, great, great young men. So when we come back, we're talking more about oil, but more the tax advantages and why going to school and having a 401k might not be the smartest thing for your taxes. We'll be right back.

14:55Ryan Reynolds here from Mint Mobile. I don't know if you knew this, but anyone can get the same premium wireless for$15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistance switch you to Mint Mobile today. I'm told it's super easy to do at mintmobile.com slash switch. Upfront payment of$45 for three-month plan, equivalent to$15 per month required. Intro rate first three months only, then full price plan options available. Taxes and fees extra. Default terms at mintmobile.com. Welcome back, Robert Kiyosaki. Our guest today, Michael Maselli.

15:31He's REI Energy. And for full disclosure, I've been investing with Michael for what, 25 years in oil. And Tom Wheelwright, he's the author of Tax-Free Wealth. He's my accountant. And the reason I like inviting Michael is I make a lot of money and pay very little in taxes. Now, you can't do that with a 401k, and neither should you. So anyway, it's an interesting time in oil. And again, I went to school for oil. I drove tankers for Standard Oil of California. So I like the oil business. So, Michael, what else is going on with you think this bombing of Venezuela? We're going to take Venezuela. How's it affecting the oil business in America?

16:13Well, I don't think it's had much effect so far on prices. Obviously, it's going to take quite a while to get Venezuela back to producing the amount of production they did 10 or 20 years ago. As far as that now, you know, Venezuela was one of the founding members of OPEC. So they are an OPEC, you know, country. So I'm sure that once that production starts flowing again, there will be restrictions on how much oil and gas each of these members can produce. So I don't really see it having that big of an effect, you know, on the prices of oil. You know, we, of course, here in the United States, we drill shell wells and shell wells are probably the most expensive oil to export.

17:00you know our our crude you know I mean you have to have 50 to 60 dollars a barrel so if crude was to drop say in the 40s for a while due to some of these these reasons that that you know about bringing more crude onto the market I mean you would definitely see drilling slow down here in the United States as far as on that so it's kind of a you know a give and take type situation. I mean, we have a lot of oil reserves here in the United States. Of course, we don't have 300 billion barrels of reserves in the ground, but our oil is more expensive to drill and it is more expensive to get out. So I don't really see it have that much effect on prices going forward.

17:43Okay. Any comments on that, Tom? Yeah, this is fascinating to me because it seems to me like it gives the U.S. an opportunity to control the production a little bit and actually have a voice in OPEC, which we have not had much of a voice in OPEC outside of Saudi Arabia. And of course, the price of oil is a big part of the investment in oil, right? Because you can't control the price of oil. A little easier to control, say, rents on a place you're renting. It's much harder to control the price of oil. So that is one of the challenges with oil, which is why the government gives us such big tax incentives for oil.

18:21Now, here's another interesting thing. You get incentives for investing in domestic oil, but you don't get tax incentives for investing in foreign oil. So, you know, the average investor in the U.S. is not going to be investing in Venezuela. That's going to be the big guys like Chevron, et cetera, Standard Oil, et cetera, that invest in Venezuela. They're the ones with the drilling platforms down there. The people who invest here are going to be really a lot of smaller investors, really doctors, lawyers, business owners, employees. One of the great things about oil is that you can be an employee and invest in oil and get the deduction immediately, whereas it's very hard to do that in real estate.

19:10So this is a huge advantage that oil has over real estate is that it's not a passive investment. So you don't have to have passive income to offset. You can have ordinary income and offset even your wage income up to a limit. But for most investors, it's a plenty high limit that it's not going to affect them. So I think that's a huge advantage of domestic drilling in the United States. So I asked this question, back behind me is a catchable board game. In the middle is a rat race and the outside is a fast track. The fast track is for accredited investors. You have to be an accredited investor to invest with Michael Vasselli.

19:54So you have to go on the fast track. So Tom, what's the definition of an accredited investor? Well, an accredited investor, you have to make$200 ,000 a year or a combined household of$300 ,000 or you have to have a million dollars of net worth outside of your home. Okay, your home doesn't count in that. So the idea of accredited is that you can afford to lose the money. It's actually not a are you qualified to invest. It's really can you afford to lose money. And that's what makes for an accredited investor in the United States. So if you're in the rat race like this and you're making less than$200 ,000, I mean, you're out.

20:33Right, you're out. Now, there are a few public offerings in oil. I know, Mike, you don't do that, but I know there are a couple. But it's hard to find. It's hard to find investing when you're in the rat race instead of outside the rat race. So, Michael, another thing is with REI Energy, I can full disclosure, I invest with you. We've made a lot of money together. I don't pay taxes on it, which is nice. But what's the minimum investment for the accredited, the fast-track investor? How do they get involved with REI? Our minimum investment is$25 ,000, so they can come in for that amount. It is a one-time investment where we're not going to come back to the investor and say, hey, we went over budget, please send us more money.

21:23so it's pretty easy to get involved with us as far as on our projects. We usually do two projects a year. Our focus is in North Dakota, Oklahoma, and Southeast Texas. They're about 60 % natural gas, 40 % oil now, the areas that we look at. Of course, the Bakken is about, you know, it runs about 80 % oil, 20 % natural gas. So we tried to start adding more natural gas into our program simply because of the AI technology that's come out, the data centers, and also exporting of liquefied natural gas. So we kind of try to have a mix there. So at$25 ,000, any other comments on that, Tom? Yeah. I mean, I suspect that most of your investors, though, your typical is going to be a hundred thousand dollars or more right now right yeah we have yeah we have investors anywhere from 25 some invest a million i mean it's just you know it's just the individual and how much they're looking to shelter and how much they want to you know put into our programs so once again the rich get richer and the poor middle class got to buy stocks bonds mutual funds and etfs so it's not fair necessarily but it's also not fair to be poor and that's why all these people will go to school for job security.

22:44It's really tough to invest in what on the fast track up here. You get stuck in the rat race. So Tom, any advice for people stuck in the rat race? What do you do? Yeah. Well, first thing I would suggest is, you know, even if it's a side hustle, start a business, start a business in your home, learn how to be a business owner, because there's so much easier to be an investor when you're a business owner than if you're not a business owner. That's one thing. Business is the best tax shelter there is. It's literally better than any other tax shelter in the world is your own business. And then second of all, learn about other opportunities for investing, especially if you have a high income from your wages or you can get involved in real estate or something else.

23:39Because, you know, you can look at oil and gas. You can look at real estate. You can look at some of these fast-track investments that have huge tax benefits as opposed to being stuck with your meager little 401k deduction. So, Michael, any words of caution for people looking to invest with guys like you? Well, there's always risk. There's risk in every type of investment. So, you know, if you can't afford to lose the amount you invest, then I would say you need to look at more of a conservative type investment. So one of the things I'm looking at right now, I was talking to Mike Masselli and Tom about this, with AI coming on board, that sucks up a lot of energy.

24:23Yep. It does. Michael, I guess looking at that because right now I'm looking at an investment for energy outside of oil. Tom, any comments on that? Well, there's obviously different forms of energy. I think that what eventually impacts more of the prices, we all know right now wind and solar, while they're investments, they don't account for a large amount of the energy that's produced here in the United States just simply because of the cost. I think going forward in the future, you know, you're going to see a lot more small nuclear reactors. You're going to see more nuclear energy that provided that we, you know, we continue on with the administration we have and we don't go back to the to the, you know, what the last administration was trying to do.

25:17But but I think in the future, you'll see more, you know, electricity being produced through nuclear just simply because it's a cleaner electricity. And, of course, our military has been running the battleships off of it for, you know, what, 20 or 30 years. So I think that technology will come on shore eventually. Well, on top of that, Mike, it seems like we've got a lot of opportunity for natural gas. Yeah. You were mentioning that your oil fields in Texas are 60 % natural gas, where it seems to me like until we get the small nuclear plants, which is still quite a ways away, Probably, I'm guessing, probably 10 years away before we get those small nuclear plants easily.

25:58During that time, aren't we going to see more natural gas production and producing a lot of that energy for those big AI facilities? Let's call them the data centers. Aren't we going to see that coming through natural gas? Yes, certainly. In fact, we have probably more natural gas reserves here in the United States than anywhere in the world. And our biggest problem that we have in this country is just getting the gas to market. If you look at some areas out in West Texas, out in the Permian Basin, I mean, they actually have to pay to get rid of their gas. They don't have the pipelines that can move the gas to the Gulf Coast or where it needs to go.

26:45So a lot of times, you know, it'll cost them$2 or$3 a barrel, I mean,$2 or$3 an MCF just to get rid of the natural gas. So let's say, how do I say this? If I make$100 ,000 with Michael, gross, how much in tax do I pay? Well, you're going to pay tax on only 85 % of that. So you'll pay tax on$85 ,000. but the reality is you can keep investing with Michael and never pay tax. So there's no reason, you know, somebody who's an active investor like you are, Robert, somebody who's constantly reinvesting, there's no reason to be paying tax because the money you put in, you get the tax benefit to offset the income you're taking out.

27:34So it's just, you keep, this is why the rich keep getting richer because the rich keep investing, they keep getting the tax benefits on the, And then they get the cash flow, but it's non-taxable cash flow because of all the tax benefits they're getting from investing. Yeah. And one of the things I loved about Michael Maselli, about 25, 30 years, I gave you money 30 years ago. I'm still being paid. I still receive income. I pay no tax on it because of a thing called depletion allowance. Right, Tom? That's right. Right, so you've got that 50 % depletion allowance, plus you've got all the new investing that you're doing is offsetting all the other income.

28:15Yeah. So, again, I'm not recommending. We're not investment advisors. You've got to check with your own accountants, your own attorneys, what's best for you. But Michael Maselli, the reason we created the cash flow board game is the reason you want to get out of the rat race is so you get on to the fast track and become what Tom classifies as an accredited investor. Right. If you're accredited, you can't invest with REI, and you'll pay more and more taxes. So with that said, that's why we do what we do here at Rich Dad. There's more ways you can get rich. Real estate has its own different investment tax breaks.

28:55We'll talk about that. And then the big one we'll be talking about is gold and silver because that's a huge tax loss if you're successful in that one. I made that mistake. So anyway, we learn by making mistakes. And I've made so much money in gold and silver, but the tax consequences are huge. So that's why Tom, his book is Tax-Free Wealthy, the Rich Ten Advisor, and Michael are on my team of advisors. That's how the rich get richer is because we have advisors, not financial planners. So with that said, thank you, gentlemen. When we come back, we'll be ready for the final words from Rich Dad. Thank you, Robert.

29:40Michael, final words on oil, really quickly. Why do you like oil? Well, I think oil is, you know, one of the best investments out there, I feel, especially when we're drilling these, you know, new hordes on the wells. I mean, it's not like the old days when I first started in the business that you had to go out and drill, you know, four or five dry holes just to find a well, you know, find oil and gas. I mean, today we're drilling into a rock that has oil and gas in it. Now, that doesn't mean that every well we drill is going to be commercial, but the bottom line is it's, you know, if you're in the right areas and you're in the best areas, you're going to make, you know, pretty decent money off of them.