Dividends vs. Royalties part III

What a fantastic day to be alive! I just hit a significant milestone on my passive income journey. I reached $100 in Amazon book sales in one month. This is an incredible feat, especially as I don’t advertise my books at all. 

I started my Amazon publishing journey in January 2021. That month I earned $3 in sales. I was ecstatic to reach that amount of money because it showed me that you could create money from thin air. 

After having an amazing holiday season, January proved to be even more lucrative. I am excited to continue this path. Every morning, I look forward to grinding away on writing, creating, and organizing my collection of articles and books. 

Stock Market Down? Dividend Yield Up!

The book “You are the Brand” taught me to focus on one major addition to my brand per year. So, 2022 will be the year of the paperbacks. I have created twenty paperbacks so far this year, and I believe having these going into the holidays will be explosive. 

Milestones. Enough about my goals; let’s make some comparisons. Reaching $100 in royalties was my goal to write this article. Now, I can compare when I achieved $100 in dividends and $100 in royalties and see the various timelines. 

Refresher. But let’s do a quick refresher between dividends and royalties (don’t forget to read part I and part II of this series). Dividends are profits from corporations. You have to buy dividend-paying stocks.

Royalties are commissions from your creative works. I wrote an entire series on these opportunities called Passive Income from Creativity (music, photography, art & design, video, audio & speech, and writing). 

Your Retirement Planning Guide 2

Of course, writing is my favorite, but they all have advantages and disadvantages. Dividends are more passive in the long run; however, you have far less control over outcomes.

Multiple streams of income. A big difference between royalties and dividends is that you have much more leverage with your creativity. You can control pricing, availability, and additional income streams.

For example, I will earn a $100 paycheck from Google Ads on my blog this month. It took me a year to reach this payday, but subsequent checks will come quicker. Additionally, I earned $25 from a Voyager commission. Someone joined Voyager using my affiliate link. 

So, I may have sold $100 in books, but I earned $225+ in total revenue from my writing business. This brings me to another point—compounding is exponential. 

The Metaverse 104: Education in the Metaverse

The power of exponential compounding. When most people talk about compounding, they talk about interest and money. However, “The Compound Effect” showed me that compounding happens everywhere.

You may see $100 and think, “that’s not a lot of money,” which is fine. But going from $3 in January 2021 to $100 in January 2022 is an increase of 3300%. When I released my first book, I couldn’t even fathom earning $100 in one month. 

Now, what dividend-paying stock will increase from $3 to $100 in one year? That’s the power of compounding, leverage, business, and entrepreneurship. It’s something for you to consider on your journey. 

Comparison. Okay, sorry for ranting. So, it took me one year to earn $100 in one month of Kindle sales. How long did it take me to reach $100 in monthly dividend income, and how much did I have to invest?

It took us eight months to reach $100 of dividend income. Royalties were not too far behind. Remember, I didn’t know what to do with book publishing for at least 6-8 months. I found my rhythm in August 2021, about eight months into the grind. So, how much money did we have invested in our portfolio to achieve $100/mo dividend income?

We had $20,500 invested in the stock market to reach our $100/month dividend income. Do you have $20,000 lying around?

Investing for Interest 102: Super Safe Savers

Differences. Both passive income methods use exponential growth to become large numbers; however, one requires money and the other time. You have to decide which best suits you—or do you?

Use both to build extreme wealth. If I can create assets from thin air, that means they would be in an infinite return. If I put this infinite money (so named in “Infinity Investing“) in the stock market, I would earn compound interest on “free money.”

I am creating money that is then making its own money. Amazing. Becoming a content creator isn’t for everyone, so consider how passionate you are about the process. Read the book “The Practice” to understand better what content creation entails. 

Which method is my favorite? I cannot pick a favorite because I love them equally. I love dividends because someone else is doing all the work for me. I love royalties because I am doing all the work.

Become CEO of Yourself 2

Last month, my wife and I reached $900/mo in dividend income—what an extraordinary feat. I believe my writing business will be just as lucrative (if not more so). It will be interesting to see if Royalties can ever catch Dividends. I think they will.

Conclusion. If you are genuinely motivated to have a Happy Cash Flow Retirement, then get started on both. Only 1-3% of the population can achieve this level of income and understanding. The rest will choose to live on a fixed income.

My next article in this series will be once I reach $500/mo in the royalties income. I cannot fathom getting that amount right now, so stay tuned. 

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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. All Right Reserved Military Family Investing