International markets have retreated considerably, picking up where they left off last week with a sell-off driven by fears that the U.S. Federal Reserve is behind the curve on interest rate hikes. Against this backdrop of volatility, here are 3 of the best passive income investment choices for investors right now.
1) Destiny's Child Publishing Royalties
This music catalog listing features the song "Cater 2 U" by the renowned R&B group Destiny's Child.
Over the past five years, this catalog has seen a positive Compound Annual Growth Rate (CAGR) of 11.1%, placing it above the 75th percentile of all catalogs analyzed by Royalty Exchange. With a Dollar Age of 19.05, it indicates a stable and reliable revenue stream, as the songs have consistently generated royalties over a significant period.
Artist & Song Information: "Cater 2 U" is a standout track by Destiny's Child, released on June 14, 2005, from their final studio album, Destiny Fulfilled. The song saw massive commercial success, reaching No. 3 on the Billboard Hot 100 and No. 1 on the Billboard Hot R&B/Hip-Hop Songs chart. It was certified Gold by the RIAA and nominated for Best R&B Performance by a Duo or Group with Vocals at the 48th Annual Grammy Awards.
Revenue Breakdown:
- Streaming Mechanical Income: This segment has grown by 22.26% annually over five years, contributing significantly to total earnings with an average of 34.57%.
- Streaming Synchronization: Primarily from YouTube, with additional revenue from Apple Music and TikTok, this category contributed an average of 36.49% to total earnings, growing at 4.42% annually.
- Performance Revenue: Showing an impressive annual growth rate of 32.85%, performance income saw a substantial increase in the fifth year, contributing 21.92% to overall earnings.
Overall, streaming remains the largest source of income, accounting for 57% of earnings in the last 12 months and 63% overall.
The legendary status of the group and solo members such as Beyonce attribute to this catalog continuing to grow in the era of streaming. Consumers continue to increase their consumption habits year over year which helps make this asset an extremely consistent earner for years to come. Music royalty payments are one of the best forms of alternative investment as they are uncorrelated with the broader financial markets.
2) The Whispers Songwriting Royalties
This listing features songs from the acclaimed R&B vocal group, The Whispers.
Over the past five years, the catalog has shown consistent growth in annual royalties. Starting with $2,891 in the first year, earnings surged to $4,884 by the fifth year, marking an impressive increase of approximately 69% and reflecting a robust Compound Annual Growth Rate (CAGR) of 14.01%.
A notable metric is the Dollar Age, which stands at 40.40. This figure indicates the longevity of the songs' royalty earnings. A higher Dollar Age generally signifies more stable and predictable royalty income.
The Whispers, a cornerstone of R&B music, are renowned for their smooth harmonies and timeless romantic ballads. Since their formation in 1964, they have earned numerous accolades, including induction into the Vocal Group Hall of Fame in 2003 and the Official R&B Music Hall of Fame in 2014. They also received an NAACP Image Award in 2002 and the Governors Award from the San Francisco Chapter of the Grammy Awards in 2005.
- "Lady": One of The Whispers' signature songs, released in 1979 as part of their gold-certified album The Whispers. It peaked at No. 3 on the Billboard Hot Soul Singles chart.
- "Are You Going My Way": Featured on their 1984 album So Good, showcasing their blend of heartfelt lyrics and impeccable vocal harmonies.
- "Say Yes": Released in 1981 on the critically acclaimed album Love Is Where You Find It.
Top 5 Track Breakdown
- "Lady": Held the highest average earnings at $1,726 per year, with a CAGR of 14.25%, consistently contributing 44.22% to 47.35% of overall earnings.
- "Are You Going My Way": Achieved the highest CAGR of 26.78%, with a significant spike in Year 3 (64.93%) and steady contribution to overall earnings.
- "Say Yes": Maintained a stable contribution to overall earnings (15.36% to 16.3%) with a CAGR of 14.83%.
- "Do They Turn You On": Recorded the second-highest CAGR at 15.92%, with substantial growth in Year 3 (46.88%).
The largest source of income is streaming, accounting for over half of the overall earnings for the past five years and showing a consistent growth trend with an impressive CAGR of 21.97%. Radio, the second-largest revenue source, has also shown a positive CAGR of 6.29%.
This is one of the most consistent and growing catalogs we have seen on Royalty Exchange in quite some time and perfect for an individual looking for passive income for years to come.
3) Listerine Mouthwash Sales Royalties
This asset listing offers a unique opportunity for generational passive income with a 142-year history of generating monthly royalty payments from the gross sales of Listerine Antiseptic. This royalty income stems from a landmark business transaction in U.S. history. As the winning bidder, you will own a royalty interest in the global sales of Listerine Antiseptic mouthwash.
What is Being Sold: A royalty interest in the gross sales of Listerine Antiseptic. This interest originates from an 1881 agreement between the inventor of the Listerine formula and the original distributor. The agreement stipulates a flat-rate royalty on worldwide Listerine sales for as long as the product is sold. This agreement has been in effect since 1881 and was upheld as perpetual by a U.S. federal court in 1959.
About the Asset: In 1879, Dr. JJ Lawrence invented Listerine and licensed the formula to J.W. Lambert and Lambert Pharmaceutical Co. in 1881. The agreement settled on a royalty based on the number of ounces sold, payable to Dr. Lawrence and his "heirs, executors, or assigns" for as long as Listerine is sold.
For 75 years, the Lawrence family collected these royalties, with ownership eventually fragmenting among various heirs. Some heirs sold portions of their stake to additional owners, including New York real estate broker John J. Reynolds, who acquired half of these royalties in 1950.
When Lambert Pharmaceutical merged with Warner-Hudnut in 1955, the new management contested the $1.5 million annual royalty payments in court. They lost the case, and the decision is still cited in contract law today.
As a result, the Listerine royalty payments will continue for the lifetime of the brand, payable to whoever owns a share. Current owners include heirs of the Lawrence family, pension funds, universities, hospitals, and multiple individuals. We've even sold other shares of Listerine royalties in the past on Royalty Exchange.
