Morning Folks!!
If you don’t have financial security, you don’t have your health either. Between worrying and maybe not enough cash for a medical emergency, your mortgage, etc. you are at the mercy of outside factors and other forces. So financial security is key.
There are thousands preaching one form of investment or other to protect and grow your assets. Reason being this is the #1 concern in life once you hit a certain stage or are struck with an illness that can take you out of the game. Or maybe a different challenge along the way.
I lived out of a suitcase for years. I could not afford to settle down or stop. I had to keep the sales and dollars coming in to get me to the next place let alone a home. The 1970’s were much worse than current conditions. There was so much less opportunity. Things moved slower.
Others based domain values on PPC and I never bought into that. It was flawed. Now everyone can see why and just how ridiculous that was. Now that did not mean you could not extract valuable data out of those numbers. Just not a way to base value. Guidelines and hints to the future.
I looked at it a bit different. If a domain makes $10 a day, how much would you have to have in the bank to earn $10/day? Whether it be PPC or Lead Gen or Lease or whatever.
$1000? Nope
$5000? Nope
$10,000? Nope
$100,000? Getting Closer
$365,000? BINGO
$365,000 @ 1% is $3650/Year
Sure, things can fluctuate. There are variables. Interest can go to 5%. So divide by 5 = $73,000
So a domain making $10 a day TODAY has a value somewhere between $73,000 and $375,000. Sell for less than that and you left a lot of money on the table.
But wait. That $10/day domain was making $50/day. It may return to those levels. Even exceed those levels. Consistency is key. Jack Rabbit earnings have to be looked at over a 365 day period to figure out a true daily level and that only if you JACK is still earning regularly.
Wait again. New opportunities can come up and make your domain even more valuable. So why sell just because you got an offer? You have the hardest asset in the universe to obtain. A profit making, income producing asset.
Buy income streams not domain names. All income streams are attached to a domain name however all domains are not attached to an income stream.
Yes, I know, there are no more type in domains. Fine. You win. Say that is true. That means the domains WITH type in traffic continue to have great value and I just proved it.
So the point is a type in domain with daily income is the single best investment on the planet today. Why would someone sell an income stream that may last forever? Because he wants to buy something RIGHT NOW. Pay off a note. Buy a toy. He has a “Circumstance”. That’s what makes the world go round. Circumstance. There is no more powerful motivator than circumstance.
Have a GREAT Day!
Rick Schwartz
PS: This is 'Face Value'. Raw Land. Undeveloped.
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Stan
Anyone who is keeping their money in any bank that pays 1% interest is a moron simple as that…there is a whole world outside the USA.
Keldon
Great post.
I sure hope you are right about earnings going back up someday.
It’s been almost four years now with no sunshine on the PPC side. :)
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Domain Lords
So the ‘king’ concedes. NO MORE TYPE INS… At last we agree on one thing. LOL
Holo King
Great Easter posts :)
Love your honest about the past
(I lived out of a suitcase for years)
True entrepreneurs never stop thinking
of new ideas and take advantage of every
opportunity. Rick you have done this
and it’s good to have a role model like you.
Todd goldstein
Rick,
I just started following you here. The concept you describe above is a brilliant concept for domain valuation. I recently sold my first domain. It was a great deal but I couldn’t agree more about circumstance. Thanks for sharing your valuable insight.
Key West Boat Rental
Thank you for adding this interesting correlation. Just another great way to think about the power of traffic domains as investment vehicles.
1800 Free World
Great post again!
Every time i come on your blog i learn something new.
Thank you so much for helping me find my dream job!
steve
When I went bankrupt I stopped caring…
I learned that is when people kick you the hardest.
Tell you I told you so.
Then when everything turns around and you make millions they all claim how much they helped you out. How you couldn’t of down it without them. Don’t be so greedy they say.
People will never understand you Rick. They can’t even make $10 a day. I don’t care anyway. I am astonished I was so pessimistic and yet I was spot on. The people that told me I was a 0 ended up being the 0.
Poor Uncle
Interesting way of looking at things. No wonder you are the domain king. You do look like a man that live out of a suitcase…but have fun doing it. :)
Kevin
Financial security is no longer a safe concept. The world economy is too dynamic and speculative and things can change instantly that totally impact an asset class.
Even the ultra wealthiest people on the planet are vulnerable as we’ve seen recently with the removal of megabillionaire dictators and their vast fortunes in the middle east.
Look at real estate, which traditionally was always one of the safest bets you could make, which took out $7 TRILLION of wealth just in the US market alone in the last couple years.
formerly of Sedo
Your math is wrong. A domain that earns $10 a day for you is also earning $10 a day for the parking company and another $20 a day for the feed. That’s why parking companies buy portfolios they can double the rev on any domain.
Take runningshoes at $700k. Niike spends $10 billion a year in advertising but can’t buy the value of owning the search result. Estibot doesn’t factor any of this in
Gazzip
“So the point is a type in domain with daily income is the single best investment on the planet today.”
As long as they can keep the lights on they probably are :)
“Financial security is no longer a safe concept. The world economy is too dynamic and speculative and things can change instantly that totally impact an asset class.”
I’d definitely go along with that, look at the price of gold now, there’s a reason so many people/countries are stocking up on Gold, Silver and buying arable land and its not all about expansion.
They’re expecting total economic collapse of fiat currencies…they going back to old school economics
Safe as a bank and safe as houses no longer apply ;)
Rick Schwartz
Formerly of Sedo, I stand corrected. You are absolutely right!
Even I have been in the forest too long.
Rick Schwartz
“Financial security is no longer a safe concept”
Kevin, true to a large extent. The game now is figuring it out and being right. Next time I see you I will tell you what I started doing in 2007 because of what I saw coming. I am just accelerating this activity now. The Dollar is worth LESS with every passing day. Every safety net has an Achilles tendon.
All I know is you have to act before not after. Water, food, shelter, protection.
Gazzip
“All I know is you have to act before not after. Water, food, shelter, protection.”
Bingo, the four essentials.
It sounds like Paranoia to most people but its just common sense to be prepared if you can afford it.
Shit happens and mother nature doesn’t care if you live or not…bless her fiesty little soul ;)
Matthew
I’m an advertiser, at one point I was spending 20-30k a day on the Google content network which included parked domains, I have lots of examples like this but this is my favourite so far, I was running an affiliate CPA campaign and my ad was along side 3 other ads on this domain.
These stats are over a 30 day period.
Domain: health*****.com
cost of clicks: $29
revenue: $562
Sales: 14
impressions:225
clicks: 47
CTR: 21%
CPC:$ 0.62
EPC:$11.96
ROAS:$19
I love type-in traffic. I’m currently trying to purchase the domain and a few like it to secure the revenue stream, after everyone else’s cut, how much is the domain owner actually making out of this $562 that was generated?
Lurker
At that valuation, it would take 150 years (after tax) to get your money back.. sounds like a winning strategy
insurance
always thought provoking Rick, thats why I pop in mate
it’s true your arguments, although with that sort of corn it owuldn’t be dumped in a 1% account, if you wanted the ‘security’ (LOL) of a bank or financial institution and wanted to be covered should they go tits, then breaking up into say $50k blocks would be better in various banks and shopping around for say 4% rates
although as we know you’re far better spreading around cash in domains and properties imho
patrick
On the spot again,if a domain can bring 100 customers a month but you make 200 per sale then you have the possibility of 20,000 in sales or profit if that is the profit rate x12 months that’s a lot of money. When the end users figures this out they will clamber for that 100 exact niche domain if it’s a generic domain of importance with even mediocre search then the sky’s the limit ,the value has always been with the market the domain represents,the domain itself is a given.A 5% roi is considered good in investments but i think the domain would outperform this figure.
Leigh
Excellent post Rick.
As someone just starting out that’s a great reference point when trying to get a handle on the values of my domains.
I’ve just gone through 3 and a half years of your posts in a week and it’s been well worth the read.
Thanks for all your effort,
Cheers,
Leigh.