How to Get Royalty Checks Every Month
Do you remember that episode of Seinfeld where Jerry is revealed to be famous in Japan and he continues to get royalty checks from his appearance in the "Super Terrific Happy Hour?"
The checks are later revealed to only be a whopping twelve cents due to the exchange rate. :)
In many intellectual industries, a royalty is paid to both the artist and the publisher of the work. In the music world, the royalty is a percentage of the money earned from the sale of the song or use of the song on the radio, Pandora, etc.
If you're an artist, you should check with SoundExchange.com which was established by the Library of Congress to help track down artists with unclaimed royalties. Sound Exchange is currently holding more than $40 million in unclaimed checks and it's pretty easy to search through their database for any royalties that might be owed to you.
How to Get Someone Else's Royalty Check
If you're not an artist, it's still possible to get royalty checks by buying someone else's share to a song in what's called a writer's auction. You see, if a songwriter dies their heirs will sometimes auction off a percentage of the song to raise money during an estate sale. Conversely some artists who are still alive will auction their writer's share to help with debt and bankruptcy.
For example, one of the auctions currently up for sale is the Theme Song for the Monkees! The auction is for 1% of the writer's share and the cost is $3,000. The website also has some helpful information about the financial records and the average royalties of the song.
It looks like the average royalty for this song is $10,200 a year, which means if you bought a 1% share, you would get an average check of $102 per year. That's a 3.4% annual return on your investment. Not amazing, but certainly better than my savings account.
The winner also receives a plaque that can be displayed (which will certainly will be used for bragging rights to your friends and family).
Some of the other Monkees songs are also currently up for sale (I Wanna Be Free, Words, Steppin' Stone, etc.). A few months ago I even saw some of the Disney catalog up for auction.
One word of caution before you buy... you'll want to check how many years are left on the copyright before making a purchase. The length of copyright depends on when a work was published, but for works published before 1978, the copyright lasts for 95 years after the artist's death. Needless to say, you might be getting $102 checks for a very long time... :)
Good Luck Penny Hoarders!