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Deep Dive Into a Music Royalty Investment: Full Monty Exposure!

As anyone who has ever found their way to my blog knows, I love investing in music royalties. It's a fantastic way to balance out your investment portfolio, and the returns are solid. But since this is a largely unknown asset class to most investors, it is important that those of us who are building knowledge share it. That is the primary reason why I launched musicroyaltyinvest.com. You can read a bit more about why I created that site here as well.


In order to continue educating others about investing in music royalties I wanted to expose all of the details about a catalog that I've purchased. I'm going to use screen shots from the different sources of information so you can see first hand what an investment looks like & how the money flows.



The Music

First of all, here are the details of the catalog we'll be digging into here. There are only 2 songs in the catalog from a Hip Hop artist named Kaiydo. One of the songs (Fruit Punch) is the primary earner. Here's a video of the song. It's catchy, even though I'm not much of a Hip Hop guy. Go ahead, listen to it - I'll earn $.000001 if you do.



Sing it with me:


But I got this Fruit Punch in my cup

Night's just getting started

I'm already doing too much

Reach down in my pocket, my wallet missing boy tighten up

Party all on the rooftop might just fall off if I jump

That's when you showed up


Okay, back to business.


The Purchase Details

Here are the details of my purchase for the music royalties of this song.



As you can see I purchased the rights to this catalog for $8,600, and the royalties I'm purchasing are for 10 years (note: for this purchase someone who originally purchased the 10 year royalties sold it to me with 8 years remaining, so I will receive payments for the next 8 years). My purchase price was 4.11x the previous 12 months of earnings for the catalog. The twelve months before my purchase the catalog earned $2,093, which was a 17.37% drop from the year prior. The vast majority of the catalog earns royalties from Online Streaming, although there's a decent amount earned from International Sources as well (note: International Sources are basically a mix of all kinds of different royalty streams from a bunch of different sources outside of the United States).



The Income

Before I get into the breakdown of the payments I've received, let me walk you though the process.


Payments for royalties are captured by Performance Rights Organizations (PROs). For this particular catalog the PRO is BMI. BMI captures the payments, then I am paid by Royalty Exchange through a company called Exactuals. I have it set up so my Exactuals payments are direct deposited into an account I have established at SOFI for all of my music royalties. Worth noting that Royalty Exchange sets all of this up, so the only thing you have to do is set up the direct deposit - they handle all of the other backend management.


Okay, so lets breakdown the payments I've received for this catalog thus far:




September 2020

$484.27 flows from Royalty Exchange (via Exactuals)...

...and into my bank account.




January 2021

$405.30 flows from Royalty Exchange (via Exactuals)...

...and into my bank account.




March 2021

$539.40 flows from Royalty Exchange (via Exactuals)...

...and into my bank account.



You see how easy this is? Can't get much more "passive income" than this. I get these payments once a quarter. Love these paydays.



The Overall Performance

Okay, so how well is this investment performing overall? Let's dig in and see.


Here is a summary of all of the payments received thus far:


Here's a breakdown of the overall performance:


As you can see this particular catalog is currently returning 15.82% annualized. Not too shabby! In case you were wondering, it is important to back out the depreciation for these investments since at the end of the investment term, they no longer have value. Here's an article I've written previously about calculating returns.


So that's it, hopefully this helps some of you see how passive this form of investing is. After analyzing opportunities and closing the deal, I sit back and watch the money flow into my account without lifting a finger. It's easy to see why I love music royalty investing as much as I do.


If you're not sure if this form of investing is for you, I encourage you to head on over to musicroyaltyinvest.com to learn more about this asset class and different investment options that are available. More content is being added there often, so check back frequently.


Alright, back to enjoying my profits:


This is all that I wrote for you, yeah It go on a perfect night, It's just me and you, ay But girl let's just wait 'till this party through, yeah Cause girl I feel great but I don't know 'bout you I don't know about you

Still got this Fruit Punch in my cup Life's just getting started




Wanna support this blog?

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  • M1 Finance: I use them for my dividend stock investments.

  • SoFi Invest: This is where I make individual stock investments.

  • Chase Bonvoy: This is my primary points reward card.

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