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Today is Dividend Day.
The series where I teach you 5 things about dividend investing in less than 5 minutes.
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1️⃣ The Royalty Model
Do you know about Royalty Companies?
They are businesses that finance miners, drillers, or music producers and collect a percentage of their revenue forever.
To earn a royalty stream, a company provides upfront capital to an operator.
Operators do all the work → Royalty company collects a % → Pays you as a dividend.
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2️⃣ Royalty Companies vs The Market
Tech stocks are getting a lot of attention.
But royalty companies can be very interesting investments.
The reason is simple:
No operational costs
No capital expenditure
Recurring cash flows that compounds over time
That’s why royalty companies are generating strong free cash flow margins.
An example? Topaz Energy
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3️⃣ An Investing Quote
Building a royalty portfolio is about owning the toll road, not the trucks.
Companies like Franco-Nevada, Wheaton Precious Metals, and Royal Gold collect royalties from hundreds of mines worldwide.
The most important part is making sure that the traffic will continue to use your toll road.
"Most of the companies we invest in can be thought of as annuities or growth royalties. And the key is predicting which of these royalties will endure.
- Bill Ackman
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4️⃣ The Music Royalty Boom
Real assets are no longer just gold or oil.
Today, music is a global asset class generating nearly $30 billion a year in revenue.
About 69% of that now comes from streaming.
So as streaming grows, royalty income grows with it.
This trend is supported by:
More music being recorded, and more music being streamed
Growth of global music subscriptions and royalty collections
Growing investor interest in buying and monetizing catalogs as predictable cash streams<