Several readers have asked me this week what “Dividend Superstations” are… so that’s the target for the Thinkolator today.
The ad comes from Brett Owens for his Contrarian Income Report, which is usually sold as a service that looks for a “secure 8% ‘no withdrawal’ return” for retirement — an admirable goal, and not terribly out of line with what income-focused newsletters have typically aimed for.
But the “Dividend Superstations” ad is much more specific than “buy some high-yielding stocks” — it talks up the impact of Tesla’s Supercharger stations, and the backdoor income investment potential that they provide. So what’s the story?
Well, here’s a little taste of the ad to get you revved up…
“Unknown to most investors, a network of money-payout machines is quietly being developing in all 50 states…
“And you can tap into this secret to collect monthly checks worth as much as $5,441.
“Keep reading to see how you can receive your first payment by November 24th, 2017.”
He includes a map of the Tesla Supercharger locations, including those that are built and those that are planned — and other than the fact that it’s a little out of date, the map is an exact match for what’s on Tesla’s website.
And though Tesla owns those Superchargers and will probably not pay a dividend for at least another decade or so, you can somehow make money from these — how is that? More from the ad:
“Tesla’s investor relations people say they don’t pay any dividends, and have no plans to.
“But anyone who enrolls is legally required to collect checks.
“This is not a temporary thing. You can continue collecting payments for as long as you want.”
And, more oddly:
“This is the missing piece to every retiree’s dream: A way to collect a steady stream of income without having to dip into their nest eggs.
“And getting started is easy. All you have to do is sign up and the checks will start rolling in every month.
“As long as Tesla keeps making cars, you’ll get a steady stream of payments – regardless of their stock price.
“If their shares keep pumping higher…
“You can collect monthly checks worth $2,720 to $5,441.”
So clearly there’s some attempt to connect this income investment to Tesla’s nosebleed-valuation stock price, but what he’s teasing is a Real Estate Investment Trust (REIT)… we know that because he cites Public Law 86-779, which is the law that set up the special tax rules for REITS (they avoid corporate taxation as long as they pass along 90% of their taxable income to shareholders, who will then inherit that tax liability).
So what’s this REIT that somehow benefits from Tesla’s Superchargers? More from the ad:
“Tesla built a network of stations around the country called Superchargers.Are you getting our free Daily Update
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“These are the Dividend Superstations I’m telling you about.
“They not only solves the biggest problem plaguing the entire electric-vehicle business…
“But also creates a network of ‘cash cows’ that you can tap into for dividend checks.
“And right now, a lot of money is up for grabs.”
Then we get the implication that somehow it’s selling the Supercharger electricity that will be the source of our dividends…
“Tesla… had no choice but to shell out $270,000 to install each Supercharger and pay for the electricity for anyone who used it. The success of the company depended on giving Tesla owners this sweet deal.
“But with more and more people wanting to buy a Tesla, and a growing waiting list for their cars, that’s no longer the case.
“And on January 1, 2017, they made a landmark announcement.
“They said that from then on, folks would only get 400 kWh for free—good enough for a 1,000-mile road trip.
“Anything after that, the driver is on the hook for. The exact rate is displayed on the in-car touchscreen display and can range from $0.08 to $0.26 per minute.
“That makes a trip from San Francisco to Los Angeles about $15. Not bad for a 383-mile haul. And cheaper than gas for sure.
“Now here’s where your cut of the deal comes in…
“Anytime someone stops to charge their Tesla, you can be getting a piece of the pie!”
It’s 400 kWh a year now, in case you’re curious — and after that the fee is still less than refilling a gas tank, at least at current gas prices, though it would not be surprising to see prices go up (free Superchargers have already been abused by regular “recharge every day” users who use it instead of plugging in at home or at work, so instead of the long-haul “range anxiety” solution it was designed to be some Superchargers effectively became congested gas stations with long fuel lines in some heavy Tesla-ownership areas like Northern California… after all, it still takes far longer to recharge a battery than to refill a gas tank, even if you only need a 15-30 minute top-up on the battery… sometimes you have to charge more for something just to get people to use it less).
But how is it that you’re “getting a piece of the pie?” Lets see what other clues are dropped… he runs through some examples of folks who have been “averagin