Today, more and more investors are exploring barge investments as another means of portfolio diversification. Investors include corporations, trusts, partnerships and individuals. Why? The reasons are convincing:
Barges are in a ‘’single-shared risk” operating pool with assets provided by investors. Investors share revenues, expenses and earnings based on their proportion of participating barges. Earnings statements are issued monthly and income is distributed to each owner. Each owner receives identical income “per barge day” for barges in the same hull class and maintenance age category.
Average long-term annual operating earnings have provided solid returns on un-leveraged investment of approximately 5-8 percent. Returns can be enhanced by leverage and tax-sheltering possibilities.
Asset Value Stability
Investing in a barge represents tangible property- a hard asset – as opposed to the intangible value associated with many conventional investments. Over the long-term barge values have exceeded the calculated depreciated value. This results because Inflation in barge construction prices enhances value of this long-lived asset (30 years)
Barges move “basic” commodities that are critical to the agricultural, construction, industrial and energy sectors and are unlikely to be supplanted. Barge design has changed little over the last 70 years providing little risk for technological obsolescence. Federal laws preclude foreign ownership control for barges in the nation’s transportation fleet.
Purchasing a barge provides a means to shelter other income due to the accelerated depreciation schedules allowed for this type of asset. A decreased tax burden puts more money in your pocket and makes cash available for other uses.
Barge assets are hard assets that can be sold. The intrinsic value is assessed objectively. Also, barge ownership provides cash flow on a monthly basis.
When you consider all of these benefits, your next question should be; “Who will manage my barge assets?” and “How will I maximize my barge investment earnings potential?”
We’re on solid financial footing. We’re Heartland Barge Management, and we have a proven track record of success for our investors.