3 things you should do if you want to start investing in domain names

Domain Investing

This weekend I was talking with a friend who recently had a bit of a windfall with some stock options she had and asked me about putting some money into domain names. While my friend is incredibly savvy in the tech world, like most people on this planet, she doesn’t know much about investing in domain names.

Her big question for me after she did a bit of research was, “if I buy an expired domain on a marketplace like Go Daddy auctions, can I just assume I’m buying at wholesale?”

My answer to her was, “back in the day yes, but not any more.”

The reality is, the domain investing world changes every year, that’s part of what makes it so fun to be an investor, and also why there are so few of us, it takes time (and more than most people think) to stay relevant. That being said, there are more resources out there than ever before to help new domain investors get started, so in many ways, there’s never been a better time to dive into the domain investing world.

As I shared some tips on getting started with domain investing with my friend on Zoom I thought, I may as well share them on my blog as well. So here we go.

  1. Don’t start by going on a domain buying spree – okay, I know, my first suggestion is by saying what not to do, but honestly, so many people make this mistake (myself included 🙋‍♂️) that it has to be said. The first thing you should do is learn, not buy.
  2. Go through DNAcademy, watch DomainSherpa, listen to Josh Reason’s podcast, and read Domaining.com – these three resources are absolute gold for new and experienced investors alike. I watch DomainSherpa, listen to Josh’s podcast, and read Domaining.com religiously, and there’s honestly no better course out there to learn about domain investing from the ground up than DNAcademy.
  3. Vet your first investments with experienced investors. One thing I’ve always appreciated about the domain industry is how open and helpful everyone (or pretty much everyone) is. When I first started buying domains, I ran a lot of my early purchases by people much more experienced than myself. They helped me learn what was junk and what might actually have some real value. This is easily one of the best ways to learn, and to avoid wasting money on domains that won’t sell.

Of course there are a lot more than three things you should know in order to start your journey into the domain investing world but I think these three are the most universal, especially tip #1.

As with any highly speculative, non-liquid investment, I can’t stress this enough – do not invest any money you need, ever again, into domain names. It’s best to assume, as you’re getting started that your first $10,000 in will yield $0 out. Unlike the stock market or real estate where you have the ability to sell investments, even at a loss, in a relatively easy way, the same is not true with domain names.

That being said, don’t confuse this with me implying that you can’t make money with domain names. Domain Investing has changed my life, and the lives of many other people, my ROI has been more than I could have ever dreamed of and it has allowed me to live a very different life than I would have been able to if I had stuck to stocks and/or real estate.

But domain investing is not a good way to get rich quickly. Instead, it takes a long time to learn the basics to really put your money to work. My first few years investing in domains were life changing in the negative direction, I lost more money than I ever had in my life. Yes, that’s all a distant memory now, and yes, I made back so much more money than I lost that it was worth it, but that leads to what is without a doubt the most important thing to keep in mind before you dive in.

Do not invest money in domain names unless you’re okay if you lose all of it. Jumping into domain investing with money you had set aside to buy your dream house or to put your kids through college is not the way to go. Instead, know that your first few years (yes years, not months) will be a learning experience, so only invest if you are okay losing money learning in the beginning.

Okay, that’s it for now, if you like this post and would like to see a follow-up, let me know, I could keep going! Oh, and if you have some tips to share yourself, feel free to share away in the comment section below.

{ 4 comments… add one }

  • Victor Meeks August 23, 2020, 8:13 pm

    Listen to Rich Schwartz and ignore everybody else. That is the the way to domain riches like I have done

    Reply
  • Varun Sharma August 24, 2020, 3:41 am

    Very informative and important blog.

    Reply
  • Ethan August 24, 2020, 4:08 am

    Visiting Domaining.com every day is helpful, too.

    Reply
  • Tyler Hitchcock August 25, 2020, 1:42 pm

    Interesting view; reguarding your “3 things to do….when investing in Domain Names.

    The reason why I am texting you is that my LLC registers Domain Names that relate to an idea or invention my Ideas Based Business hopes to offer or help create.
    (novel idea…just haven’t proven it yet)
    But then that is what I am texting you about.

    You see…I don’t know you (but then the same thing could be said about me).
    The real difference is my LLC is literally NONE OF YOUR BUSINESS (in all caps)!

    Though my LLC creates and markets ideas; my LLC offers the highest form of anonymity (being that it will be my LLC which my investors go through) being that it is infact “none of your business” who you donate to or I best in.
    You would go through me (as in my LLC).

    Why I am so sure I can keep your anonymity is that my LLC has devised a way to allow you (the investor) to use a sequence of crypto codes that will identify you to your client/business (but not to the world in general).

    Having an ex-wife who worked in Intelligence tend to make one (let’s just say) insightfully.

    What I am asking is your help to offer your readers (which to launch your carrier) a way in which they can invest in my LLC…the idea being that you will oversee all the exchanges being the one who is offering them the idea which to invest in.

    When I have registered over 75 TLD…three of which are Virtual Online Banking/Virtual Escrow Holding and Virtual Venture Capital .com Domains.

    I don’t think you will have any problem safeguarding their investment which I look forward to sending you emails (at the end of August).

    All I ask is the chance to help out others, but most of all challenge China’s Digital Dollar (with what I will give you one guess with)?

    Reply

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