Money For Lunch – How Investors Can Profit From Toll Ways

How Investors Can Profit From Toll Ways

April 18, 2017 9:45 AM0 commentsViews: 6

 

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Just about everyone hates their commute to work as some of us only have to drive a short distance, while others have to take the highways to get to our destinations. We have come so far as a society technologically and there will come a day when we have cars that fly.

Unfortunately, when it comes to air travel, we have to rely on that of commercial airlines and private airports as planes need regular maintenance from electrical checks to replacing brake bleed valves. Until the day comes when we have flying vehicles we will have to stick to the roads.

The state governments spend a lot of money to keep the roads in good shape so that citizens can make it to work on time. Part of the way they keep up with maintenance is through that of toll ways. Wouldn’t it be nice to profit off the toll ways the same way the state does?

Well, the good news is that you now can benefit of investing in the toll way, and today we will go over the various ways you too can benefit. Let’s get started!

2Image source: http://www.meetingsnet.com

Public-Private Partnership

Most local states resort to public-private partnership when developing a toll road. What the state government does is award an exclusive contract for a particular partner, in order to raise funds. Some partnerships are done through that of a means of profit sharing for a set amount of time.

If your contract is for five years, you are entitled to collect the revenues from the toll way for five years regardless of the amount, so you will benefit from it when the road becomes busier and busier.

However, it helps to be wealthy in order to invest in public-private partnership. Keep in mind that investing in construction of highways is not a joke. The benefit is huge, and so is the investment. Nevertheless, there is no problem if you can afford it.

Municipal Toll Bonds

Another way the state government generates funds is by issuing municipal toll bonds. This works like any other trust fund in which you can buy a bond at a certain amount and be paid after a certain period of time such as one, two, five years or more. Every year, you can earn fixed interest. Upon reaching the expiration date, your capital will be paid back to you.

The local state government uses this strategy if no qualified partner is able to invest directly. The funds that the state government is generating from municipal toll bonds are the ones being used to construct highways and road facilities, and the funds the government will use to pay the bondholders will come from the revenues generated from toll booths.

How Else Can Investors Profit from Toll Ways?

Most private partners are not actually wealthy individuals. Usually, they are big real estate or construction companies that know to build infrastructure projects that publicly listed on a stock exchange. When they are awarded with such contract, these companies would normally issue new shares for the public to buy.

Final Thoughts

Investing in tollways is lucrative and safe idea for most people. The only risk that we can consider in investing in tollways is when people eventually move from the roads to the air. However, this is far from being a reality as we are only just moving to have autonomous vehicles.

 

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