I’m here to tell you, the traditional method of making money in trucking is not attractive as it used to be. Truck investing for passive income is a non-traditional way of making money in the truck industry without directly investing in equipment. The traditional way of making money on the road has a lot of risks inherent in it. You have to maintain a truck in good road condition and keep it fueled and staffed at all times. Unfortunately things don’t always go perfectly. In this article I want to give you a couple of ways in which you can protect your money and still invest in the trucking industry (passively).
Typically if you want to invest in trucking you are actively running a truck or a fleet on the road with some drivers. That is more of an active investor. We can talk about that in another article. I like to focus on the passive investor, because that is what most of us want. Most of us want to invest in something with a yield with little, to low risk. Passive truck investing can be accomplished in several ways. A common way is when you buy shares in companies that own and operate trucks. You can think of any number of large companies like UPS, and FedEx as well as Amazon that own and operate a national fleet of trucks. When you invest in these companies, you are betting that package delivery (U.P.S. and FedeX) demand will remain high and expand. You are also betting that goods will be consumed at the same or higher levels (Amazon, Walmart, etc). Usually when we talk about truck investing, we’re referring to buying shares of companies that own and operate trucks. Most of these companies do more than ship goods as a third party agent like U.P.S. for instance.. A large number of these companies are national wholesale shippers of consumer and commercial products. Think of Coca Cola, a huge consumer brand. They focus on manufacturing and shipping their own product, Walmart too. But then you have a company like Amazon who makes a huge chunk of their logistics money, providing logistics services for other businesses.
Another more non traditional strategy or method is Truck Investing for Passive Income by buying debt or accounts receivables within the trucking industry. This method is less known and hides right out in the open. The traditional method of passive investing in the trucking business is via factoring. You have a whole group of large companies that provide short term funding for the carriers. This is called factoring within the industry. Essentially a factoring company buys an accounts receivable (lends money) at a reduced rate from the carrier and collects the original bill from the shipper. You can invest in these favoring companies directly. Or you can get a line of credit from a bank and start your own favoring company. A non-traditional way to make money in this business is to provide factoring for another group within this industry that is underserved. There are many diesel mechanic shops that are all around the country servicing and fixing the trucks and equipment that is on the roads. Yes you have a lot of truck stops that have a mechanic on deck that does a lot of the basic work. But a large chunk of this industry is smaller mom and pop shops that are all around this country. These smaller shops sometimes run financially thin and have less resources to rely on. If a smaller shop quotes an engine overall for $20,000 he may have to spend $5-7K or more on parts that he has to float out of his own funds and pay salaries. What happens now when the work on the truck is completed and nobody shows up to pay the bill?
Our company provides an entry point for passive investors to get tint the truck business without risking too much and buying into a high yield operation. The worst thing that can happen is the owner does not buy back the debt from us and then we can legally possess the truck, payoff the primary lien holder (if any) and run it thru the nearest truck auction. In the worst case scenario, we make even more money for our investors. If you want to learn more about this method for truck Investing for Passive Income, the contact me right away. Our business goal for 2023 is to buy a larger portion of accounts receivables for our portfolio, provide an essentially risk free investing opportunity, while safe guarding investor funds. All in all, truck investing is a smart way to earn passive income while also diversifying your portfolio. As always, do your due diligence and make sure to invest wisely.