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.