Stop Chasing Dreams, Start Making Money

It’s been the motto of Linton Investments for some time now, “Stop Collecting. Start Investing.” I came-up with this after I found myself with a collection of domain names in 2008 and very few solid investments. What I had discovered is that continually buying domains didn’t make sense without a solid game-plan. This is the path that many new Domainer Investors make…and to be honest with you, they are never really investing, instead they are gambling.

Domain Shane did an excellent post today that I think is an absolute must-read. He touches on some really good points, about people only sharing their successes and how many of them (and unfortunately some of you reading this) are really just gambling with their money rather than investing. I think a lot of these dreams come from books, blog posts, videos, etc. by people talking about how easy it is to make money with domain names.

Sorry to burst your bubble everyone but I’ve said it before and I’ll say it again…there is nothing easy about making money with domain names. Domaining is definitely not a no-risk, no worry method of making a living online. You can’t take a $9 domain name and flip it for a 10x profit quickly and easily on a regular basis. The people that make money in this industry work hard and it absolutely takes more than a few hours a week to build a successful business.

The problem is that there are so many resources out there making it look like Domaining is easy. My book is one of the few that I’ve seen which says plain and simply – Domaining is not an easy way to make money, it takes a lot of time and energy. I’ve received a ton of positive feedback from readers saying that my book is completely different from most of what they’ve read about Domaining, sobering and realistic rather than selling a false dream. The first part of my book talks about all of my failures and what I learned from them – I think you have to fail big to learn big, or at least learn from someone that failed and wasn’t afraid to admit it!

In Shane’s post he says something that I see every day as well:

So how do I know that most people are lottery players?  I get the lists sent to me every day.  Names that are horrible.  Lists several pages long with every tld known to man.  Typos. Words people never use. Words in an order usually not spoken in the English language.  All sent by people that honestly believe they have a winner in their somewhere.

I also get these lists, and I can relate to them. When I started in Domaining I did the exact same thing…however I continued to run my domains by friends of mine who made a full-time living off of domain names and they were not shy in telling me, “Your names suck.” I’m a persistent guy but I like being persistent and moving in the right direction. Now I see lists everyday and as politely as I can I respond to emails from readers saying, honestly – you should drop all of these and invest the money you would have spent on renewals into one or two good names.

Let’s face it. If you’ve been Domaining for three, four, or five years, and you aren’t actually making money…you’re really not investing in domain names. Remember, an investment is something that pays you. Having equity in a swamp doesn’t make you an investor, having equity in a house in Beverly Hills that pays you $2,000 a month, is. See the difference?

Now there are two paths you can take in the Domaining world and I don’t think it’s easy to do both at the same time. What has always attracted me to domain names is passive income. I like building brands that make money every single month whether I’m working on them or not. In the beginning I spent every bit of free time I had building these brands, as they started generating revenue I began hiring people to manage them so I could focus on working on my business rather than in my business.

Over the last year I’ve been enjoying learning the ropes of buying and selling domains however as I said last year – I suck at selling domains. If you’ve ever emailed me a question about selling domains you’ve probably received the following from me, “I’m not an expert at selling domains so you really shouldn’t take my advice.” Ask anyone who makes money selling domains and they’ll probably tell you they’re no expert at building brands. You need to pick a model that works for you and then stick with it.

Here’s what has always amazed me about Domaining. People will buy 100 domain names, not be able to sell any of them, and then renew them and continue buying names. They just keep telling themselves they are making an investment and eventually one will sell for big bucks and it will be all worth it…doesn’t this sound a bit like the lottery to you? I think Shane nailed this one – it really is the same thing. You buy a lottery ticket every day and tell yourself, some day if I win this will have all been worth it…in many cases the lottery is a better deal because you don’t have to pay to renew your losing ticket every year!

So for everyone out that that wants to make money with domain names, I’m happy to say you can do it…but it’s not always easy, and like most things, it takes time. I find most people in the industry are attracted to flipping, if that’s your thing, do it and do it well, but pick a path and stick to it. I made a goal when I started in this industry to make enough money to cover our condo, car, groceries, weekends, etc. I have reached that goal and it was damn hard to do…but I did it and because my focus has been on building brands that money comes in whether I’m spending ten hours a day or zero hours a day. This year I set a new goal – make six-figures in this industry, and I’m on track to exceed my goal.

Set a goal and stick to it, but don’t stick with a losing model. Don’t keep buying domains that you can’t sell or aren’t able to successfully monetize. Don’t take advice from people that aren’t doing it themselves, like I said earlier, I’m not your guy for advice on selling domains – Toby Clements, Andrew Rosner, Michael Berkens and many more make good money selling domains and these are some of the people I reach-out to for advice myself. Don’t be afraid to fail, but when you fail don’t by shy, tell people you failed and do what you can to turn it around…but don’t fool yourself, just because you have hundreds or thousands of domains doesn’t make you an investor, only if those domains are making you money every single year (and I mean a profit) are you really a domain investor.

Beware of anyone telling you it’s easy to make money with domain names because anyone saying it is…probably isn’t doing it themselves.

{ 8 comments… add one }

  • Shane July 5, 2011, 5:29 pm

    Oops “in THERE somewhere” My English teacher should be fired.

    Reply
  • http://1-800AUCTION.COM July 5, 2011, 6:07 pm

    You don’t suck at domain selling. Domain selling sucks.

    If making money with ‘domaining’ should be hard, why do it at all?

    I got into domaining because, to be frank, I want to make money by working smart, not working hard. If it’s going to be so hard to make money with the damn thing, might as well go be a politician or something.

    The truth of the matter is that, like most things, domaining has been “stopped” dead on its tracks by BIG FISH companies. It’s now unstructured. Once in a while sales will be made, but you can’t rely on it. Even sex.com is not guaranteed to return on the investment by the buyer!

    To me, the true domainers nowadays are people like Facebook, Zynga etc. And none of them have a “category Killer”, they have Brand-ables. You heard me! So shut up to all domain propagandists! Good dictionary one worders, and 2 to 3 word/letter domains are still good, but, beyond that, it’s going to be a doggy-dog business. Do you think Rick Latona will leave auctioning domains if there was life still left to squeeze out of it? No!

    However, having said that, we will continue in this business, but we have to be honest about it.

    Reply
  • Gene July 5, 2011, 7:11 pm

    With all due respect, I disagree with your assessment – and Shane’s -, Morgan.

    The underlying premise of your post is that if you’re not earning income from your domain assets, you’re doing it wrong; and, by implication, your domain names suck.

    I’ve been domaining since the days that registrations cost $135.00 (apiece) from NetSol. The first wave of names that I registered (back in 1997) were in the legal space; but I quickly learned that lawyers are among the cheapest (least visionary) clients imaginable – and I say this as a TM lawyer, myself.

    I subsequently became wiser over time (many, many thousands of dollars later), and kept refining my approach, and overhauled the constituents in my portfolio. A few years back I came to realize that (good dot-coms) were rare commodities; and as rare commodities…kind of like rare earth commodities…were capable of being hoarded, i.e., “collected.”

    So I proceeded to lock-up all the available dot-coms in two key areas of technology: Holograms and Sentiment Analysis.

    I have an entire team of developers and designers, who have built sites on some of my names, but I never had enough time to devote to treating them like a real business (yet); so, for now, I have shelved development, because I am one of those guys (like you) who has a ‘real day job.’

    The bottom-line is that, so long as you can afford to (and have the right instincts to stick with) maintain a portfolio of quality domain names, you will likely win in the long-run. [A great way to gauge interest in your names without putting them up for auction is to see how many times your WHOIS records are viewed, if you have a GoDaddy account].

    Look, if you owned shares of Apple, Facebook, or Twitter (the last two being restricted shares, because they’re privately held), you’d receive ‘no income’ – only asset appreciation. The same goes for fine art (which must be properly stored, and preserved until the day of sale).

    So your (and Shane’s) premise that ‘income’ must be earned from your domain investments is flawed; and frankly, denotes a ‘let’s flip, develop, or leave the business’ mentality. I know that you’re trying to give fair advice to newbies, but postings like this one (and Shane’s) come off as quite arrogant, and, again, simply reinforces the notion that this industry has a handful of ‘elite leaders’ – and everyone else is a serf.

    And that’s why I have always refused to attend events in this industry.

    Sorry to be so blunt.

    Reply
    • Morgan July 6, 2011, 8:42 am

      Hi @Gene, I appreciate you sharing your opinion, that’s what my blog is all about!

      I guess it all depends on what your goals are. If you lost your job tomorrow would you be able to provide for your family with the income you make off of domains? That was my goal and I hit it…we all have different goals. It is absolutely true though that an investment is something that pays you, not something that you pay for so if you’re spending more money each year than you’re making…it really isn’t investing.

      Reply
  • Mike McAleer--Sell To EndUsers dot com July 6, 2011, 9:47 am

    Hello,

    I would like to say that I actually agree with Morgan and Shane. But in all honesty it depends on your goals.

    When you do need to make $5k a month from domains because you don’t have a job, then that is the case.

    If you have a job, you can make domain flipping a hobby and not a business.

    Mike

    Reply
    • Morgan July 6, 2011, 11:27 am

      @Mike – excellent point and very true. It really does depend on your goals, Domaining can be a hobby or a real income source. There’s no reason it has to be a major revenue source, plenty of people have fun, learn, and enjoy the industry without making much money. It all depends on what your personal goals are.

      Reply
  • Neeraj July 6, 2011, 11:22 am

    I completely agree with Morgan, Shane.. Investing in domain names with the goal of having a cash flow from them, is a good idea! After all, this can be one of your retirement plans. I’m a complete newbie who started to ‘explore’ this domaining world recently. I bought few domains last week, with a sole intention of building a suitable business model around it which would add value to it and bring in cash flow on a monthly basis.
    Cheers!

    Reply
  • Gene July 6, 2011, 2:09 pm

    @Morgan

    I hear what you’re saying. But I think that your definition of “investing” is (very paradoxically) how the (we) baby-boomer generation viewed the activity than your generation sees it.

    During the post-war years, folks ‘invested’ in stocks primarily to receive a stream of dividends (which is something right out of Benjamin Graham’s Intelligent Investor treatise). Fast forward to the startup conference that you just attended: Do you think a single VC in that audience would put a single USD or EURO into a showcase firm in return for a stream of dividends — however high?

    Answer: No. They were looking to deploy their capital into a potential, global brand, which they could one day exit for 20x to 100x their investment. They’re looking for a major score; and the way that they ensure that that will happen is (a) investing in people — more so than solutions, (b) spreading their investments over a large portfolio of companies, and (c) monitoring market trends in real time, then adjusting their strategy in each investment, accordingly.

    Those principles can – and should – be identically applied to domain name “investing.”

    With that said, I fully agree that if you have the development talent/resources, building sites atop your best names is a great strategy to extract additional returns, i.e., dividends in the form of ad revenue or product sales.

    Reply

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