At the conceptual level, the idea of investing in a royalty trust sounds like a simple straightforward way to earn income because there is no actual asset that you are operating, but rather, you are sitting on your rear and collecting a portion of the profits or sales from a business enterprise.
Typically, royalties (when present) are a component of start-up funding. Imagine if you wanted to begin a brewery, but did not have the resources to buy commercial brewery equipment. The traditional ways that you would raise funds is by either borrowing money from a bank (and giving them a secured interest in the equipment, and possibly a personal guaranty as well). The other way is that you might give up an equity stake to an investor as a capital raise.
Over the past generation, as wealthy Americans have become flush with capital and have relied upon their advisors … Read the rest of this article!
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