Master Limited Partnership (Part I)

By Ahmad Hassam

If you are interested in investing in companies that are involved in the production, transformation and distribution of commodities, than one of the best ways to do so is through investing in the Master Limited Partnership (MLP).

So how do you go about investing in an MLP? The shares that an MLP issues are called Units and the investors who own them are known as Unit Holders. MLPs are public entities that trade on public exchanges. An MLP issues shares that trade on an exchange just like a company stocks that trades on an exchange. You can invest in an MLP by buying its shares on an exchange. You can instruct your broker to buy the units of an MLP that you are interested in investing.

When you invest in an MLP, you are essentially investing in public partnership. There are tax advantages to investing in MLP. Unlike regular corporations, an MLP is only taxed once. Now most of the MLPs trade on the New York Stock Exchange. A few MLPs also trade on the NASDAQ and the AMEX.

There is a tax exemption on MLPs. You must be curious how this tax advantage works out. Because of Congressional Legislation, any MLP that derives 90% or more of its income from the production, distribution and transformation of commodities qualifies for this tax exempt scheme.

Since an MLP has got the tax exempt status it will only have to generate only $1.54 for each dollar that you invest in it. Suppose you invest $1 in the stocks of a regular corporation and you are in the 35% tax bracket. Corporate tax is 30% of its before tax income. This means that for each dollar that you invest you need to get at least $1/ (1-0.35) =$1.54 just in order to breakeven. So the corporation will have to generate $1.54/ (1-0.3) =$2.2 for each dollar that you invest in order to return you $1 after tax profit. In most cases, the majority of these GPs in MLPs are other corporate entities setup with the specific purpose of running an MLP. This tax advantage gives an MLP competitive advantage as compared to other corporations when competing for assets. This means a huge advantage for an MLP. Now an MLP is run by a General Partner (GP).

The role of a GP is very important in an MLP. You as an investor in the assets of MLP might have a very limited role or say in its running. You can think of yourself as a sleeping partner in the MLP. In most cases, the majority of these GPs in MLPs are other corporate entities setup with the specific purpose of running an MLP. This tax advantage gives an MLP competitive advantage as compared to other corporations when competing for assets. This means a huge advantage for an MLP. Now an MLP is run by a General Partner (GP). But you don't have to worry much about the GP. Most GPs do a good job of running the MLP as it is in their financial interests. GPs know that if they don't make sound management and investment decisions, most of the investors my eventually deicide to divest themselves from the units of the MLP. Now you must know as a limited partner in an MLP, you have limited voting rights. This means when you invest in an MLP, you are giving away the keys of ownership to the GP. This means you are out of the decision making in an MLP.

Investing in MLP units can give you quarterly cash flows as well as appreciation of the unit price. An MLP is obligated to distribute all available cash back to its unit holders on a quarterly basis, so you will be getting a quarterly income from your units. Secondly as the MLP expands and grows overtime, its units may give you capital gain as well. - 23204

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. Trade Dow Futures . Learn Commodity Trading !

Beginning Investors and The Stock Market

By Patty Berker

The stock market is not a place for the timid as shown by its terrible performance over the last year or so. You should never invest money in the stock market that you cant afford to lose and this has never been more evident than this past year.

There is no book that you can go out and buy that will tell you how to put your money in stocks with 100% safety and this should be noted by anyone interested in entering the stock market game. Stocks are risky and for that risk you have the opportunity of higher gain than something safer such as bank CDs.

The stock market seems to have become more volatile in the past 10 to 15 years with the advent of day trading and the ease with which someone can get involved who doesnt really know what they are doing. In years past, the stock market was a place for investors who placed long terms bets on companies in hopes those companies would prosper and the stock price would go up. Now days, with computer trading and trading via the Internet, it seems more like a mechanism for gambling with people trading in and out of stocks daily hoping to hit a score and run. An investor in todays market needs to keep a vigilante eye on his stocks as the market and market conditions can change at any time.

Anyone who is new to stock investing and the market may have a hard time understanding all the specialized jargon. Business shows on television and the radio are full of all the technical stock and trading terms that brokers and sophisticated investors use. This is something that confuses a lot of beginners and perhaps intimidates them into never getting started.

If you are interested in learning about the stock market, your best bet may be to do some studying first before you get involved. You can pick up some good books at the library or in bookstores that will explain market concepts to you and make getting started easier. You can also learn things online but it is important to know that your learning process will be a long one. There is a lot of information to understand about the stock market and stocks so you must be patient as your investing adventure will last a lifetime. - 23204

About the Author:

Are you looking for more information about buying stocks for the first time? If so please go to my website How To Buy Stocks Online.

A New Kind Of Template: Sample Business Proposals

By Cameron McDonald

There's not a business on the planet that couldn't use a new customer. Particularly in the moody economics of this day and age, learn-as-you-go business proposals simply aren't going to cut it. Forget about improvising and pick up a sample business proposal and use it as a template to create a great business proposal to secure new customers.

First, never underestimate the power of pre-writing. Since this is your first draft and you're not submitting it to potential customers at this time, relax and try to have fun. Do your pre-writing and figure out what exactly you are going to pitch in this proposal, what goals you have and what will differentiate your services from the other distractions your clients have to weed through every day.

Try organizing your thoughts. Break down any goals you may have into simple steps and take notes on what is needed to make each step safely. Be certain to write each of these steps in such a way as to lead the reader to the inevitable goal you stated during your pre-writing.

Start off the writing process with a simple cover letter. Make sure to use two or three paragraphs to summarize your goals -- for instance, you could write: "Our company will help you by doing x, y, and z. X number of businesses in this region do regular business with us." There's nothing wrong with elaborating on your successes. Don't ruin your chances with an exaggerating cover letter.

Next, the hard part: actually write your business proposal. Proposals are usually split into five pieces: the executive summary which states what you do and who you are, a statement of work dictating what services you plan to give your client, a list of steps to achieve your goal, a list of reasons why you are better than the next guy, and last but not least the legalese terms of your contract and payment arrangements.

Again, this is only the first draft, so take it easy on yourself and write what you would like your client to know. Imagine your target seated at the table with you. What could you tell them that would convince them to hire you?

Quality is not important at this stage. The only thing you need to worry about with the first draft is simply getting that proposal written according to correct proposal structure. Word changes, spelling and grammar fixes and combing for redundancies can all be done later.

Next, consider your pricing and your contract. Keep your prices competitive by doing a little footwork to find out what similar companies are charging. Now's the time to find out you're overpriced -- you don't want to be sitting down at the table with your client when you realize your prices are less than stellar.

Rewriting begins when your first draft is finally complete. Try having a friend give your proposal a once over to see if they can find any obvious typo's or other mistakes. If you're still holding on tight to what you needed to fix and doctor up from your first draft, do so at this time.

When you believe you've got your proposal in a finished state, try a little role-playing to head off troublesome customers. Why not try putting on your customer's shoes for a little while? Consider how they'll see your proposal. Is there anything that might hang them up? Brainstorm as many reasons for the client not to buy from you as possible, and then create counterarguments to squash their anxiety.

It may be difficult, but writing a business proposal from a sample business proposal is not rocket science. Take some time to incorporate each of these steps into your working process and before long you'll produce a solid proposal that will keep the attention of your clients through a long, healthy relationship. - 23204

About the Author:

If you want to write a business proposal, obtain a sample business proposal to give you a better idea of what methods are proven. You can use them as guides, or simply as an example of testing methods. Ensure you obtain it from a trusted source to make sure you're reviewing a real scenario.

Grants For Minority Women Business Owners

By John Holden

In order to start a business, women will usually go get a loan from the bank or perhaps ask friends and family for a loan. Not many realize that they can get free money in the form of grants.

As a minority woman, you can claim benefit to many grants for minority women business owners. You can use these grants to help start your business and pay expenses that come with running a business.For you to apply for minority business grants for women, you must be an African American, Asian, or Hispanic female.

Many organizations give out minority business grants for women including the federal government. The organizations may include Non-profits and businesses.

If you want to be taken seriously for minority business grants for women, then you must have a business plan. The grantors want to see that the money they give you will be put to good use. A business plan can also help you to organize your business and set goals.You can look for sample business plans online if you do not know how to write one. Otherwise, there are business consultants you can hire to help you.

Next contact local businesses and organizations that help women start businesses. They might provide grants. If not, they can at least give you some advice on how to start up your business.

Next contact local businesses and organizations that help women start businesses. They might provide grants. If not, they can at least give you some advice on how to start up your business.Finally contact your state or local government and see if they offer grants. State and local governments have separate grants from that of the federal government.

When applying for minority business grants for women, you should apply to as many as you can find. The reason for this is that you may not get all the grants that you apply to, but the more you apply to the better your chances are of getting at least one grant. - 23204

About the Author:

To read more about US grants, check out Success Grants. Also, check out the Success Grants review now!

Master Limited Partnership (Part II)

By Ahmad Hassam

You as an investor should make yourself well acquainted with the working of an MLP. The reason MLPs exist is to distribute all available cash back to the MLP unit holders. As said, this has to be done on a quarterly basis. Knowing this fact can make you more aware before making your final investment decision in an MLP. The following factors are considered before determining the amount of cash distributed to each individual investor:

1) The difference between the total cash flow and the cash flow ploughed back into the MLP for futures growth. 2) How many units you hold as an MLP investor. 3) The incentive distribution rights created for the GP. These are just a few factors. There might be more as well. You need to understand the reasons behind the factors that determine the distribution of cash among the individual investors.

Now there are many always to go about doing commodity investing. First you need to determine the hottest commodity in the market like crude oil or gold. Then you need to search for an investment vehicle that can give you the best return. You must do your due diligence while making your investment decisions. There are always pros and cons of each investment vehicle! So once you decide to invest in commodities, you have many investment options like mutual funds, stocks, ETFs as well as MLPs.

You can invest in commodity stocks, you can invest in commodity ETFs, you can invest in commodity mutual funds. The possibilities are many. So investing in an MLP is just like investing in stocks. Investing in MLPs is quite simple. Since an MLP is a publicly traded entity. You can simply invest in an MLP by calling your broker and telling him or her how many units of a particular MLP you are interested in buying.

Something like 50 MLPs is being publicly traded in the United States. Out of these 50, 40 are energy MLPs meaning that they are involved in the storage terminals, pipelines, transportation, refining and distribution. Majority of MLPs trade on NYSE with a few trading on NASDAQ and AMEX!

Moreover, investing in pipelines and other energy infrastructure offers steady cash flow streams for an MLP. You only need to remember this 90% of the income that comes to an MLP should come from the production and distribution of commodities for these MLPs to have the tax exempt status.

So when you invest in an MLP, you should look for answers to the following questions: 1) How much is the cash flow? And so on. 2) What's the historical payout of the MLP? If your brokerage firm has published some research on the MLPs, you can reference that.

Don't forget there is always some risk involved in any investment. The more return you demand, the more risk you will have to take. Now investing in MLPs do come with some risks like most of the infrastructure is like pipelines and drilling rigs that are vulnerable to natural disasters and earth quakes like the Hurricane Katrina, so any such event can have a negative impact on your investment.

Since the MLP is fairly small at this moment, there can be liquidity issues in withdrawing your investment from an MLP. These are some of the risk that you can face while investing in an MLP. There is another risk related with the management. You don't have much say in the management of the MLP. Running an MLP is basically a GP show. If you are not satisfied with the performance of the management or its policies only thing that you can do is to withdraw your investment from that MLP. - 23204

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. Trade Dow Futures . Learn Commodity Trading !