Probably running low on that royalty money!

The benefit is you can make an illiquid asset liquid & in exchange collect royalties from people buying/selling fractionalized pieces of the property on a secondary marketplace along with the standard price appreciation of the property.

Generally, property held for the production of rents or royalties is considered to be used in a trade or business.

There's a lot of money to be made in PM, and I do not believe most of the franchises available offer anything proprietary and worth paying for (certainly not that IFF and their royalty percentage.) 

he must het some royalties from this company to use him in their scam.

Same as #1 but working with an existing large company in their partnership programs to complete the project and collect royalties (basic research and industry knowledge, could take anywhere between 2-4 years before royalties are received)I know all are profitable, and obviously in these scenarios (or REI as a whole!) 

They might even have some income leftover for maid service every couple of weeks to come in and clean the place- live like royalty.

Oil and Gas:Summary: Investing in oil and gas involves participating in exploration, drilling, or production activities in the energy sector.Pros:Potential for High Returns: Successful oil and gas investments yield substantial returns, especially during periods of high energy demand and receive income through royalties or a share of the profits.Tax benefit against active income: Investors may receive a tax benefit and offset W2 or active income.4.

Income from investment activities, such as rental income from real estate, is not business income, it is classified as investment income (rents and royalties), and therefore sheltering that income via a 401k is not possible.  

Passive income is interest, dividends, royalties and rent from real property.