Royalty Exchange: Buying Music Royalty Rights as Income Investment

sesameFor many songwriters and musicians, their primary asset is the rights to their music. Instead of a house, they have intellectual property. Every time their song is bought for a film, streamed online, or aired on TV they receive a royalty payment for the rest of their lives + 70 years. But what if the artist wanted a lump sum? They would usually sell their rights privately. Royalty Exchange is an online marketplace that aims to do this via public auction instead.

Until recently, you probably never had the opportunity to own income-producing intellectual property. That’s where Royalty Exchange comes in. We’re a marketplace where these types of royalty assets are bought and sold. We specialize in intellectual property with a documented track record of regular, consistent income.

You can view their live and closed listings here. Past auctions include works by Rihanna, Taylor Swift, Jay Z, Dr. Dre, Chris Brown, and Earth, Wind and Fire. You could have bought rights to “Elmo’s Song” from Sesame Street or Wiz Khalifa and Charlie Puth’s “See You Again” (Fast and Furious 7 soundtrack). I wonder if you get paid from any of the 3 billion YouTube views?

You do not need to be an accredited investor, but know that most auctions have ended between $10,000 and $100,000. Often, you are only bidding on a percentage of the complete royalty stake. Royalties are generally paid to you on a quarterly or biannual basis. There may be admin fees charged that vary per listing.

I like the idea of receiving an lifetime income stream, but I am not nearly familiar enough with the music industry to invest in royalties of individual artists or songs. You would think the artist has much more information than you. If they thought their income was going to decrease from the current level, wouldn’t they be much more likely to sell than if they thought income would stay high. I suppose you could say this for any business sale, though.

I’d also worry that the income stream wouldn’t be very reliable as songs go in and out of fashion quickly. The starting yields appear to be in the 10% to 15% range (i.e. $10k to $15k earned last year on a $100,000 investment) at least partially in consideration of this risk. Perhaps these sales are more about risk reduction for the artists.

For a music insider, royalties might be a nice non-correlated asset. But for me, this would be more of a consumer purchase than an investment. It’s fun to look through the listings and imagine owning the rights to a lesser-known song of a favorite artist.

PenFed Power Cash Rewards Visa Card: 2% Cash Back With Military Service or Checking Account


Pentagon Federal Credit Union (PenFed), the 3rd largest US credit union by assets, launched the PenFed Power Cash Rewards Visa Card in 2017. This credit card offers up to 2% flat cash back with no earning caps and no annual fee. Here are the highlights:

  • Sign-up bonus: $100 statement credit when you spend $1,500 in the first 90 days.
  • 2% cash back on all purchases with PenFed Honors Advantage (qualifying military service or PenFed checking account, details below). Otherwise, you get 1.5% cash back on all purchases.
  • No annual fee.
  • 0% Intro APR on balance transfers for 12 months. 3% balance transfer fee.
  • No foreign transaction fees.

PenFed Honors Advantage requires either of the following:

  • Military service (active, reserve, retired, or honorably discharged).
  • Checking account. Have and maintain a PenFed Access America Checking Account. This account has no monthly fee with daily balance or monthly direct deposit of $500 or more. $25 minimum opening deposit. As long as the account is open, you qualify for the 2% cash back.

In other words, if you don’t have military service, opening and keeping $500 in their Access America Checking Account will keep you qualified without a direct deposit or minimum activity requirements.

Cash back redemption options. Your cash back rewards can be redeemed as a statement credit, a deposit into a PenFed account, or a deposit into an external bank account. Simple.

Competition. The following cards currently offer a competitive level of cash back rewards. Some offer higher rewards, but with additional requirements and/or an annual fee. Please read my card-specific reviews for details.

PenFed CU membership eligibility. Check out their eligibility tool. If you have a military affiliation, chances are that you can join immediately. However, anyone in the general public can also gain access by first joining either the National Military Family Association or Voices for America’s Troops. Both of these partner organizations can be joined with a one-time donation of $17.

Bottom line. The PenFed Power Cash Rewards Visa Card offers 2% flat cash back on all purchases with no annual fee. There is currently a $100 sign-up bonus if you make $1,500 in purchases within the first 90 days. PenFed Credit Union membership is required, but is also open to anyone willing to donate $17 to the National Military Family Association (NMFA).

If you already have one of the other 2% cash back cards available with less requirements, this may not warrant an additional credit check and new bank account. However, PenFed does offer good customer service and other financial products. You might consider making them your primary banking institution if you live near PenFed branches (often near military bases).

Google Express: 20% Off Coupon Code (Both New and Existing Customers)


Google Express has a couple of coupon codes that may be of interest: SHOP2018 - 20% off your first order. Max discount $20. 5RTC4Q545 - $10 credit towards your first order. This is my referral code. Use the one above if it saves you the … [Read the rest]

Debitize: Will Making Your Credit Card Feel Like Debit Help You Budget? ($10 Bonus)


In our increasingly cashless world, I prefer to use credit cards over debit cards for a few reasons: Credit cards usually have better cash back, points, or rewards programs. Credit cards have additional features like free checked bags, … [Read the rest]

Anthony Bourdain: Taking One More Risk Changed Everything

Anthony Bourdain gets to travel around the world, eat great food, and hang out with interesting people. I have read a few of his books and enjoy his TV shows, but this YouTube video from 1 Step Away revealed some new details about how it all … [Read the rest]

Research Affiliates: 10-Year Asset Class Returns Forecast, Q1 2017


Investment advisory firm Research Affiliates has an interactive Asset Allocation tool that provides estimates of expected returns for many different asset classes and model portfolios. Their default model is based on valuations like the CAPE … [Read the rest]

Charlie Munger’s Life as a Financial Independence Blueprint


Charles Munger is probably best known as the Vice Chairman of Berkshire Hathaway and partner of Warren Buffett. The University of Michigan Ross School of Business recently shared a hour-long talk with Munger on YouTube (embedded below). Munger … [Read the rest]

Connexus Credit Union 5-Year CD at 3.00% APY: Early Withdrawal Penalty Comparison


Connexus Credit Union has raised the rates on their 5-year Share Certificate to 3.00% APY with a 365-day early withdrawal penalty. They also have 1-year Share Certificate at 2.01% APY (90-day early withdrawal penalty). Both have a $5,000 minimum … [Read the rest]

The Fall of Landlines and Rise of Cell Phone-Only Households


Here's an interesting chart from Statista showing how landline telephones are slowly dying away and being replaced by cell phones only. In 2004, more than 90 percent of households in the U.S. had an operational landline phone - now it’s … [Read the rest]

Sprint One Year of Free Unlimited Data Plan: Still Available


Updated: Offer still available, my 6-month update. Sprint still has a pretty solid promotion that isn't being advertised (TV, radio, newspaper, etc) and is only available online to new customers. If you bring over your own eligible smartphone … [Read the rest]

Berkshire Hathaway vs. S&P 500: Shrinking Edge?


It is well-known that the CEO of Berkshire Hathaway (BRK) is Warren Buffett, and that its long-term performance has crushed the S&P 500. This is usually illustrated with an impressive chart like this one from Business Insider: I'm currently … [Read the rest]

Big List of Free Consumer Data Reports (2/2): See Your Confidential Rental History, Insurance, & Employment Data

Links updated 2018. Here is the second part of my big list of free consumer reports from over 50 different reporting agencies. The first part included your credit, banking, and subprime lending-related information. This part includes your housing, … [Read the rest]