I have been feeling a bit magical recently. I have felt the magic of dividends and the magic of rents, but lately, I have been touched by another: the magic of royalties. I am entirely new to this form of passive income, so let me explain.
I never knew that a standard person could earn royalties. Truthfully, I never looked into it much. When I came to Japan 10 months ago, I was hell-bent on making money via a second job. I would use this secondary income to fund my dividend portfolio.
Something inside me told me not to sell myself short for $10/hour. So I stumbled into reading some financial education and personal finance books. The second book I read was “Rich Dad, Poor Dad,” in which Robert Kiyosaki said that I could create an asset without any money.
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To be clear, assets produce money. So he was saying that I could create an asset from thin air and have it make money for me. Well, I was intrigued, to say the least. I had already been writing many articles for my blog, so I was starting to form an idea.
I took my articles and my artwork and put them into book format. I figured the artwork would help the reader stay engaged with the words. And, I just continued to do that every day. Slowly but surely, I continue to see results.
Last month, five months into my quest, I made $40 from book sales. To me, that is a lot of money. First, I love what I am doing for this money (writing and artwork). Second, the books will continue to sell for a long time. Third, the money comes in without me working for it.
So, I had to choose when I arrived in Japan, work for money or learn how to build royalties. I am thrilled I chose the latter. The skills that I have learned on my quest for royalties will serve me well for the rest of my life.
You see, the only way you will make royalties is if you make sales. To make book sales, you have to learn to advertise, design and write. To make sales in video products (YouTube), you will have to learn a whole other set of skills.
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I recently wrote an article where I reviewed my early article designs. Whew, they were very rudimentary. The article is titled “Basics of Design 101: Don’t Leave Home Without It.” The entire series covers some of the main design principles that have helped me increase sales over the months.
But, I will continue to improve my writing, art, and advertising. In the meantime, I will be earning royalties. And that is where the fun comes in, the randomness of royalties. You never have any idea what will sell on any particular day.
I had a book I released in my first month that made its first sale in month five. I had a book I released that sold two copies in 24 hours upon release. It has indeed been a fantastic experience to see people interact with my works.
Luckily, I read a book called “The Practice” that helped me understand how to ship creative work. The goal is to create your own practice, or routine, that allows you to keep producing work. Do not focus on the outcome, which is sales or blog views. Those things are entirely out of your control.
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I have my routine now, where I wake up early and write an article, go exercise, and go to work. After work, I edit my writing, create some artwork, and publish it on my blog. Once I have enough content, I put it together into book format.
That is it, nothing special. I also make sure to read a new book 30-60 minutes a day and do a book report when I finish. This allows me to continue to have great content for my blog and readers.
So, what makes royalties so unique compared to the other forms of passive income? Royalties are entirely and utterly removed from economic forces. By this, I mean interest rates, inflation, stock market, real estate market, etc. Royalties exist in their own world and act as a great way to diversify your passive income.
Royalties are also random. Yes, some books will have a stronger propensity to sell, but overall you never know what you will get. I had a book that I wasn’t particularly fond of; however, my wife loved it. It has turned out to sell well for me continually.
I highly recommend everyone begin to create content with the intent of making royalties. The things you learn and your personal growth are beyond words. I have found something that I can see myself doing for the next 30-40 years. Not only does my mind stay sharp, but I am creating value for a subset of people.
It is also super fun to see your works do well. My wife and I have already decided that royalty income will be our restaurant money for the month. Last month I made $40, and this month, 16 days in, I have already passed that amount.
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So one day, we may be eating steak and lobster all from book sales and royalties. It is a great life to be able to do things without feeling guilty about them. It also feels good for royalties to have a tangible meaning to myself and my family.
Another thing about royalties that make them extraordinary is creating multiple income streams from them. Let’s say I have about 50-100 readers of my books currently. I can start putting ads, affiliate marketing, online courses, seminars, web conferences, etc., inside my books. I can also teach people how to create and publish books.
I am very early on in my journey. My main focus is to create great content. But one day, probably once I retire from the military, I will have the time to exploit other income streams from my writing. And that will be truly amazing.
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I hope I have done an excellent job of selling you on the power of royalties. Although they are random, there is a science to them. Just like the magic of compounding works with dividends and compound interest, it will also work here, with your works.
A good place to start is my article “Retire Rich, Retire Comfortable with a Business (book).” This book will guide you through building a business mindset, adding value, and shipping creative work.
From there, decide what kind of royalties you will want to begin your journey with. You have artwork, writing, books, videos, music, etc. You even can do things like t-shirt designs and printables on Etsy. There are many ways to skin this cat, but the goal is to start and keep learning and doing.
I hope everyone will experience the joy of earning royalties. It is magical to randomly come home to have sold five books in one day. It is an intense feeling; creating value for others and being paid at the same time. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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