The Risk That Goes into Freedom Checks

If you’re in the investment industry, have watched television, or listened to talk radio, you’ve likely heard about or seen the commercials for freedom checks.” In the commercials, Matt Badiali, the man who brought the idea of “freedom checks’ to the public light, is holding a check guaranteeing that everyone who requests it will receive a share of $34.6 billion dollars. While they sound like some kind of government program or scam, they actually aren’t. However, it isn’t quite as easy as the commercials make it seem.

“Freedom Checks” is actually an investment opportunity. These investments are made in master limited partnerships (MLPs). Investors who invest in MLPs receive the various tax advantages of a limited partnership but, also receive the benefits of a publicly traded company. Investing in master limited partnerships has two main benefits. First, it is a requirement that 90 percent of an MLPs’ profits are passed to the investors. Second, there are a number of tax laws that do not apply to freedom checks. For example, the investor doesn’t pay taxes on capital gains, allowing more money to be made and kept.

Like with most investments, there is some risk involved with this investment opportunity. However, those risks aren’t necessarily higher than other investments. One such risk is that, according to Matt Badiali, there are over 565 MLPs companies. Seems like at that number a person’s odds for making a profit would be high. However, in Badiali’s opinion, only five of those MLPs are worth investing in. Another disadvantage of freedom checks is that the profits an investor makes is solely determined by the amount invested. On average, investors are seeing a return rate in the range of 5 to 9 percent. What this means is if a $10 investment is made, at the end of the year the profit would be less than $1. Therefore, the only way to make a lot of money, is to invest a lot of money. Whether or not this is a worthwhile investment opportunity is determined by how much capital an investor has to put into it.

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The benevolence of James Dondero of Highland Capital Management

James Dondero is the President and Co-Founder of Highland Capital Management, located in Dallas, TX. He has two Bachelor of Science degrees and he undertook his studies at the University of Virginia. Visit to know more about James.

Background information

He started working at JPMorgan Chase & Co in 1984. Afterwards, he landed his dream job at American Express. While there he managed $1 billion which consisted of fixed income between 1985 and 1989. In 1989, Mr. Dondero began working at Protective Life’s GIC branch as the chief investment officer. He transformed the original concept for the growing company into a $2 billion business.

In 1993, James Dondero began his own company. He named it Highland Capital Management. With its rate of success, it earned a reputation as one of the largest alternative credit managers in the United States and across the world. Highland Capital Management specializes in credit hedge funds, private equity accounts and a unique array of credit accounts.


James Dondero recently donated $1 million to Dallas Zoo hippopotamus habitat, after it closed down in 2001. Together with other local philanthropists, they donated $14 million to the cause. Mr. Dondero and his firm donated money to the Perot Museum of Natural Science and the George W. Bush Presidential Library and Institute. He is involved in helping Uplift Education and the Snowball Express.

When starting his firm, one of Mr. Dondero’s goals was to be involved in philanthropic causes. Now, the firm has a business association with the President and CEO of The Dallas Foundation, Mary Jalonick. Mary has an experienced team committed initiatives focused on philanthropy. This relationship has led James to commit more than $3 million to his annual philanthropic budgets.


Together they founded Highland Dallas Foundation Inc. as a way to help him select charities. The foundation focuses on North Texas, supporting veterans, health care concerns, educational needs and various civic organizations. Throughout the year, James Dondero offers grants to support various organizations within the Dallas area.

Through Highland Capital Management, The Family Place, a shelter for men who are victims of domestic violence receives $1 million challenge grant. It is located in an area close to medical resources and features such as a 24-hour crisis hotline. Visit to know more about James Dondero.