Seriously? Google’s obligated to pay you every month?
Well, kind of.
But no, not really.
This teaser pitch came in from Briton Ryle and the Angel Publishing folks a few times over the past week as they’ve been advertising The Wealth Advisory… and you might be thinking that it sounds kinda familiar. I thought so too, so I wanted to check and see if it’s just a revamp of their old “internet royalties” pitch that we’ve covered a few times over the years… here’s how the ad starts:
“Why GOOGLE is contractually obligated to pay you up to $2,058 per month
“Thanks to a small group of “tech heads” out of Denver, Colorado, EVERY American now has the chance to cash in on the third most valuable company on earth…
“Without owning a single share of its stock.”
Oh, who could these lovely “tech heads” be, I wonder? Apparently they’ve magically found their way into Google’s bank account? More from the ad:
“As long as Google remains in business, it is contractually obligated to disburse lump sum checks that give ordinary Americans the chance to pocket sizable piles of cash on a regular basis.
“The thing you need to understand is that the chunks of cash you could collect starting today — up to $2,058 per month — are all based on the amount of business Google does.
“In essence, every time someone sends an email through Gmail or uses Google to find the closest sushi restaurant, you get paid.”
THat’s some pretty over-the-top promising there — there’s some contractual obligation from Google for life? I really doubt that’s true, though the wording is squishy enough that they probably passed it by their lawyers before emailing it out.
A bit more…
“Get the idea? When Google gets used — even if it’s through one of its subsidiaries — you get paid.
“That’s why I refer to these payments as ‘Internet Royalties.’
“Of course, with the staggering numbers posted by Google, you only earn a very small amount of money each time its services are used.
“I’m talking about fractions of a cent.
“But those fractions add up extremely quickly.
“In fact, folks who’ve been using this loophole for some time now have banked some incredible sums of cash:
- Jerry L. Martin recently received a check for $153,406 thanks to “Internet Royalties.”
- Thomas Teague did even better, pocketing $265,213.
- And Robert Webb was the king of them all, raking in $287,751.
“If those numbers seem incredible, it’s because they are.
“But these guys have all been collecting “Internet Royalties” for quite some time now.
“When you start, it’s likely you’ll earn somewhere around the baseline “royalty” figure of $2,058 per month.”Are you getting our free Daily Update
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See what he did there? He made $2,058 per month seem like the very least you could expect the “baseline”… and he still hasn’t mentioned how much you have to invest to get that “royalty” income.
And yes, as we’ve now gotten partway through the ad we can see that this is indeed yet another variation on the “Internet royalties” spiel that Angel Publishing started running almost three years ago. Back then it wasn’t so much about Google being “contractually obligated” to pay you, it was about similar obligations from Netflix and Amazon. I guess they just tweak the ad when there’s a different company in the headlines (or when everyone’s already seen the old version and they need a new twist). That older article of mine has been updated a few times and is here, if you’d like more background.
So is it the same investment they’re still hinting at in the ad? I suspect so, but let’s run through the clues.
He implies that the returns were dramatically higher for this investment in 2015 than Google’s …
“Instead of forking over $25,000 and hoping Google’s stock does well, you could’ve made one-year profits of $50,000 by collecting ‘Internet Royalties.'”
Presumably he means you could have doubled your money, not that you would have tripled it (profits, after all, are only the part that’s an increase above your original investment).
And they’re still touting the fact that pretty much everyone is “contractually obligated” to “take part in these payments” ….
“Amazon… Netflix… Wal-Mart… Microsoft… Facebook… even Disney.
“You can collect ‘Internet Royalties’ thanks to ALL of them.
“Like with Google, they are all contractually obligated to take part in these payments. And if they want to stay on the Internet, they’ll continue paying for the foreseeable future.”
And apparently it’s not expensive to get your “baseline” of $2,058 in monthly payments…
“… you can begin collecting these payouts starting with less than $100….”
Obviously, there’s absolutely no chance that an investment of $100 will get you $2,000 returns every month. That’s wholly misleading, and just a wee bit of common sense would have you stopping your reading by now and saying, “phooey” to Briton Ryle’s pitch… but it wriggles its way in to those “greed receptors” in your brain and sometimes you just can’t stop daydreaming about your yacht and your Maserati (or, more prosaically, helping with your Childrens’ college education, rescuing your retirement, etc.).
So do the rest of the clues match the old “Internet Royalties” pitch from years past? Um, yep…
“So what are ‘Internet Royalties’ and how do they work?
“In September of 2010, the first ‘Internet Royalties’ were made available to the public.
“And on the very first day, investors spent a total of $270 million buying in.
“Ever since then, daily “royalty” payouts have ranged anywhere from a mere $840 to $94,350.
“That’s right… some folks have collected upwards of $90,000 in a single day.”
And we get a bit of the history of these “royalties”….
“… in five years, the payouts have skyrocketed by 223%.
“If you’d been collecting $2,000 per month in royalties five years ago, today you’d be making $6,460.
“Those who were making $10,000 are now making more than $30,000, assuming they’re still in the game.
“So if history is any indicator, if you get in today, you can look forward to payouts that will increase in price every single year from here on out.
“Thing is, you have to act fast because to make the kind of money I’ve shown you, you must get in as soon as possible. Every day that passes is another missed payout opportunity.”
So, yes, this is still a spiel about data center REITs, and the only specific hints still point to what also happens to be my favorite stock in that little sub-sector, Coresite Realty (COR)
So rub all of that money-lust out of your eyes for a moment, and let’s bring it back to earth.
Data center REITS are companies who build, own and operate data centers, which are the huge buildings that are filled with racks and racks of servers and provide power and huge connections to the internet. Each of the companies is a little different — some are more “retail”, some more “wholesale”, some have regional focus, some are international — but they all provide the same basic thing: Space for a company’s servers, lots of electric power, and a huge pipeline into the web with connections to the major telecom providers. Lots of companies also host their own servers, or even own their own data centers if they’re large enough for that to be feasible (Facebook, Google, Apple, Amazon all own data centers), but many of them also rent space in many other locations.
And because they’re REITs (that’s a Real Estate Investment Trust), they’re designed to be pass-through investments — so they have to pay out 90% of their taxable income in the form of dividends, and in return they don’t pay tax at the corporate level. That tax obligation is passed along to you, the shareholder (and REIT dividends count as regular income, they’re not “qualified” for any lower dividend tax if that’s available).
The data center REIT concept existed before Coresite, in the form of Dupont Fabros (DFT) and Digital Realty Trust (DLR), but this particular company was IPO’d by Carlyle in September of 2010, did indeed raise exactly $270 million in that IPO, and is priced at about $68 right now — it has roughly doubled since this newsletter ad first appeared 18 months ago, and just about quadrupled since I first