Advice For Instant Millionaires

October 22, 2013

For more than 20 years, Chuck Headley has handled investments for members of $286 million asset Butler (Pa.) Armco Employees Credit Union, in the heart of western Pennsylvania’s fracking country.

Many of his clients had to watch their personal finances carefully before becoming wealthy almost overnight thanks to large land lease checks from drilling companies.

“A lot of farmers in the area struggled financially for years,” says Headley, the vice president of wealth management at Members Financial Services. “Now, they’ve got this newfound wealth and they’re putting money back into the farm, buying equipment, and doing things for themselves. It’s great to see.”

Land lease payouts began to trickle in 10 years ago but didn’t top $5,000, says Headley, a CUNA Brokerage Services representative. The market has changed considerably the past few years. Most leases reap at least $50,000 and go as high as $800,000.

A drilling company recently offered one of Headley’s clients a land lease deal for $1.8 million. That doesn’t count royalties, which typically represent 12.5% of the value of the gas extracted.

Wary of massive deposits that would saddle the credit union with excess liquidity, Butler Armco Employees steers these members to Headley, who offers financial planning options such as annuities, mutual funds, stocks, and bonds, within the framework of holistic wealth management.

Headley first tackles income-tax issues with clients. From there, he asks them to set their priorities—paying off a mortgage, funding their children’s education, and planning for retirement.

One couple’s wish list started with donating money to several churches, giving money to their children, buying a new vehicle, and tackling a few home improvements.