The life of Michael Berkens and other domain investors does sound nice. Jetting off to a foreign country to sit in on meetings. Heading to 4 or 5 conferences a year in exotic and interesting venues. But in reality, this isn’t really the life that most lead. Most domain investors don’t have that type of portfolio. Most of us have to develop our names just to have any chance of making good money. Other “less funded” domainers have to seek outside investors to help pay for the more expensive name and you know what outside investors like don’t you? A solid payback.
The realities of trying to do this full time are scary. If you donate all your time to this in the best years of your life and it doesn’t work out what do you do for a living? Having “domain investor” or “web site developer” may sound cool on paper but the only job you are going to get after that is most likely working for someone else who is trying to do the same thing. Would you have been better off working your 50 hour a week job and then putting in an extra 30-40 hours a week on the side with domains? Will your family suffer if you have a bad year? These are all questions that have to be answered. Answers that led me to think that the only way you do this full time is if you have plenty of money or an investment grade portfolio that you could sell off if things go bad.
Don’t read this the wrong way. I’m all for risk. I’ve lost $150,00 of my own personal money in one option trade a few years ago. More money than I have in cash then and now. If I don’t have that kind of money then why would I risk that much? Because I realize that in order to be do what you want full time you have to have a bankroll or solid domains. If you don’t, then you have to scrape and struggle to earn a living for yourself. Since my domains suck I knew I needed money. Here’s the story you didn’t know. At the point I had the losing trade, I had turned $2000 into $250,000 in 9 months trading options. I hadn’t traded options professionally in 10 years but I had a contest with my wife about who could make the most money with $2K. I obviously was winning. I put all the money into one option and held it through earning. One of the stupidest things you can do………normally. I knew though, that if the trade went well I had over a million dollars and if it went south I was going to lose a little. Of my $2K investment I took out $10,000 and bought the family a 50″ plasma and in the wall high end theater system. A totally unneeded thing but something I’d alway swanted. In the end I ended up with only $80,000 and I was still happy. I had a real chance to make a million dollars and my consolation was pretty good. Sure I could have had more money than I ended up with but I got there with calculated risk and I stayed with it to the end. And this leads to this statement. The reason I had the opportunity to make the million is I didn’t need the money I had already “banked” $20,000 and taken away all possibility of having less than 2000 percent return . I had done quite well and I had the choice to either take more risk or I could be patient. I was in control.
When you are trying to make a living on your own there are many outside pressures. Your friends are moving up the corporate ladder. Stock options, bonuses, and raises. They are putting away money, saving each year. Meanwhile you’re taking all profits and plowing them back into the business. You can’t take out too much because you need the capital. Your wife questions your contributions to the family income. She has to take a job because your income is unsteady. I realize it sounds like a good story but only if the ending leads to wealth. The problem is there is a chance it ends is mediocrity and loss of valuable career building time. It takes away years of saving that could have lead to a much earlier retirement. Pressures of failure.
If this seems negative then you don’t know the problems of building a business, any business. All the issues I named above translates to domain investing but it could just as easily be the story of someone building a print shop. I had those exact same issues with building our nursery. Taking home $18,000 a year when all your friends are taking home $75,000. It’s all part of sacrificing for the overall gain. I always knew I would do fine because regardless of outcome, I, and nobody else determined my fate and I can live with that. I also learned the most important key to any successful business person. A spouse with a good paying job. A job that covers all the bills so you can pursue your dream.
My business has turned the corner and most of my worries are over. I am comfortable and have a ton of assets. I have to fight and work hard daily to keep it that way but I don’t worry about where my next paycheck is coming from. I still take home less than my friends but I have an entity that can delivery millions a year in the near future. As the business matures I realize that I now have more time to devote to domain investing. I have some capital, no financial worries, and don’t have to make a living doing it. I go to sleep at night and don’t have to worry if anyone buys my domains or visits my website. I can turn down offers or feel comfortable asking for higher prices because I am an unmotivated seller. In short, I make more money domaining on the side than I might make if I did only that, with a lot less pressure. So go ahead and dream about doing this full time but what you really are dreaming about is just being wealthy and you can get there plenty of ways.
So what method did your wife use for her $2000?
She put it into my daughter’s 529 with my $10K
Great points, I can see myself doing this as I grow up but not full time, I want to work office hours for some time to see how it is to work for someone.
Post like this comes to me as a reminder when I’m in a cross road. Sometimes, my job get so unbearable that only the other day, I had my resignation letter all ready to ‘shuck’ it up my boss face. But somehow, reality bites and sadly, I’m always able to hold on to my emotion……..
Anyway, thanks for the post.
Great points, one has to realize that life is long and act accordingly. The odds of making $2 Million or whatever is needed to be very comfortable are slim, so plan B has to kick in.Will you trust Google to keep you in the first page 2-5-15 years from now? Exactly.
My plan is simple: build a house in another (much cheaper) country and go live there while the business is doing very well to save up. Of course those with children of education age, working spouse etc cannot do that so everyone is unique. As you said after you remove yourself from the job market for many years, you will have a very hard time to get back in. And the children, spouse and 401k cannot wait forever so you can ‘hit it big.’ In this line of business you need a way to deal with lean times and possible failure.
I enjoy your story very much. You sound like a skill options trader with money to prove it. You sound like a guy with a lot of skills. Good for you.
Interesting points, and the part about taking home $18k while everyone else is earning $75k or $125k or more is very true. But the long term risk is worth it. Mediocrity is the chance you take when seeking the greatness, but no truly mediocre person ever achieved greatness by playing it safe.
As many of the great entrepreneurs have said, if I’m going to work so hard to build a business, it might as well be my own. I fully subscribe to this notion. I’ve been scraping around for a while, but the fact is you don’t get a shot at the moon by riding in the back of a buggy. You take a chance and build your own ship.
If it flies, great! If not, learn from it and do it again. It’s a scary thing being independent and trying to make it on one’s own, and I like it that way. When I get hungry, I work harder. It’s called freedom, and I wouldn’t trade it for the world.
😉
Let’s say Frank’s success is 1/ 100,000.
In order to achieve Frank’s success, you’d have to put in a similar amount of effort. I hear Frank is a workaholic.
In order to achieve Frank’s success as a part timer, your odds are 1/ 1,000,000.
What kind of odds do you want? What kind of risk can you take? These are the questions you need to ask.
Good write up – I believe that negativity is the key to success – actually, realism – people arenr born millionaires – its requires a chance – if you never try you wil never succeed/
Great tips shane!, but I have one objection on your thought . This plan doesn’t work well with the single domainer, a man who doesn’t have wife and children yet, it’ll going to harm him badly and let him waste his life time chance!, because if you have a dream to reach a $X,000,000, and you have no family responsibilities yet, you should have the courage to bear the bad circumstances and keep trying a new risks until get the big prize, the Experience!. You may be failed or depressed, but the good news is you finally recognized the wrong ways to get the goal.
I don’t think if there is a (job man) with wife/children will have the time to learn domaining secrets just like the full time domainer!. The best strategy in my opinion is starting as a full time domainer, and after establish the basic rules, you can going to do it by another way .
You have to remember the “michael berkins” got in years ago. When you could still get the one word domains. Now he is hurting too. As a newbie you’re not going to make that kind of money on domains.
Great article. It is almost identical to my situtation, but without the stocks. I have several college degrees, and a ton of student loan debts. I worry whether I get visitors, clicks and I’d I make a sale. My main goal has always been to write films. I invested a lot of time in domain investing.
I agree with you that domaining on the side is better than doing it as a full time job. When I mess up on making a sale, it puts me in a bad situtation. You’re pressured to make a sale, and will sell for less when a buyer comes around. Domain investing is not easy at all. It’s very time consuming and cab expensive, as well as risky.
Awesome article!
Lou, it is actually easier now. Back when, there were lots of folks fighting over the one worders including Scott Day and many others. No domains had sold for millions. The size of the WWW was much smaller back then. Today, there are 200 million domains registered and the internet is central to life on Earth in virtually all countries. Billions of people are connected. Tons of great software is available for blogging and creating online stores. Tons of monetization options exist such as domain parking, affiliate programs, and private labels. The cost to register a dotcom has dropped from $100 to under $10. Many business people have proven that becoming a millionaire with domains is possible. The cheese has definitely moved, but it is still there, and still possible to grab –with enough creativity and effort.
Great article, and one that many can identify with.
You have to take risks to get gains. And it doesn’t hurt to do domaining part-time while you learn, and have a main day job. Also a good idea to learn about the stock market and other investing markets – good to know all the options available to you.
The more I do domaining, the more I think it is a good idea to just pick a few domains related to subjects you have an interest in, and put all efforts into developping sites on them. Even if you just ran a few blogs on subjects you like, it’s possible to do it part-time.
Excellent article Shane.
Cuts real close to the bone, for any entrepreneur, not just domainers.
And Hal is totally right in saying, its still possible here and now, you just have to see your path and have the conviction to follow it through.
Trading stock options is lot more profitable than buying domains (with a few exeptions)
I’ve been trading stock options for the last 6 years, never had a loosing year and in the same time I registered several hundred domains and never made profit parking them.
I rather spend time researching stocks than developing my mini websites or parking them
hoping to get a few pennies from mighty Google
This is my feelings as well and when you have to worry about the family, mortgage, and numerous other bills. There definitely is less pressure when low-ball offers come in and you know you don’t have to settle just to pay your bills.