Ok, despite what I may have led you to believe, there are some not-so-beneficial aspects when you commit to investing in websites. But there are also some unbelievably wonderful, extremely beneficial aspects as well.
How uncomfortable did you feel reading Pros & Cons the wrong way around? Me too. Simple re-wording of classic phrases can engage more users. <— Tip of the day
Don’t ask me why there’s an Orange as the featured image. It’s an orange Orange, the website’s theme is orange, everyone’s happy. Plus, Oranges have Pros & Cons as well!
I haven’t really specifically touched on a lot of website investing benefits before, nor any of the potential downsides one may face. The creation of this post summing up a few of the major advantages and disadvantages of investing in websites aims to clear some of that up.
It’s not an exhaustive comparison, and I’m sure your weighting on each of the factors will be different to mine, which is perfectly OK. It’s simply a general guide to shine some light on a few things to consider before starting to invest in websites.
Cons of website investing
“What? Of course having no boss is an advantage instead of a con!” For those of you who’ve been self-employed before, you’ll know this sometimes isn’t entirely true.
Without someone above you, there’s no one telling you what to do. “But why would I want someone telling me what to do?” Because it’s easy.
It’s easy to come into work every morning, and not have to think about what comes next – that’s someone else’s job.
It’s easy to have pre-set deadlines handed to you in which there are real consequences if they’re not met.
And it’s easy to go home at the end of the day and leave all the problems in the office.
I know, all of those can be done if you’re self-employed as well, but it takes far more discipline to achieve consistency.
I’m not aware of many website investing jobs out there, so if you’re taking this route, you’ll likely be your own boss. Understand being your own boss it’s not as easy and straightforward as many people make it out to be. There will be challenges, difficult ones.
Remember the three qualities:
If you have those three, being your own boss will come easy. Don’t expect to achieve them in a day, nor even a few weeks. These will take a while to develop, but will last you a lifetime.
Internet is a necessity
If the description of what you do has website in it, it’s likely you’ll be depending on the internet for a large majority of the work.
Fortunately, our society is becoming more connected around the world with companies like X developing Project Loon – balloon-powered internet for all.
Unfortunately, it’s not completed yet, and we’re still far from a universally connected globe. So there will be areas where internet connectivity is dicey, or worse, non-existent.
For those looking to travel whilst maintaining your online portfolio, this will restrict some of the areas you’ll be able to visit. It’s only a small amount, though, so I wouldn’t be too worried.
If you’ve read through the website due diligence posts, you’ll understand there are a few risks involved in investing in websites.
For example, you’ll likely rely on 2-3 platforms for all your traffic if you’re yet to build an email list (what are you waiting for?!). Relying on any single or a few third parties to provide you with income is risky among nearly all asset types. Thankfully, these can be easily minimized through diversifying.
There’s also a risk of buying scam sites, which are far more common over anonymous web transactions than business deals in real life. But, as you’ve already absorbed all the information on how to not get scammed (especially on Flippa), you won’t be worried about this.
One of the classic investing principles is – in order to achieve a higher ROI, you must maintain a higher risk. As websites often achieve an annual ROI of anywhere from 30 percent all the way up to the 000’s, surely there must be a higher risk as well?
I’d argue there isn’t. Fully apply the three qualities above, and with the knowledge and experience you’ll gain along the way, you should be easily able to minimize the risk to the levels of assets with far lower returns.
This completely depends on who you are as a person and the current relationships you have. But I’d thought I’d bring it up as I’ve had to deal with some interesting situations personally, and I’m sure others have as well.
For those who do work the normal 9-5 lifestyle, imagining how someone could actually make a real living online can be difficult.
As a website investor, you may find yourself in situations where people ask what you do, and you aren’t quite sure how to respond. I’ve found myself on more than one occasion simply spitting out “online stuff” and quickly getting back to the football in fear of my passion falling on deaf, uninterested ears.
And if you’re at a stage where you truly don’t have to work full-time to maintain your sites, some of those around you may develop some jealousy. I’d be wary of these people if you call them your true friends.
I’m not saying your family is going to abandon you and all your friends will hate you. Just that you may find some of your relationships may experience turbulence along the way.
Pros of website investing
All the doom and gloom behind us, let’s see how the positives sides of website investing completely outweigh the negatives.
Low capital requirement
If you’ve read through where to buy websites for sale, you’ll already know the capital requirements are relatively small to make your first investment.
Personally, if I were to start again from the beginning, I’d save up around $20,000 and find my first site for around $5,000. You want enough to make a decent purchase, but you want more than enough so you don’t use all your capital on a single website.
Head to the other side of the price range, and in a few years after you work your way up, you’ll find plenty of deals available in the hundreds of thousands to millions ready to be bought by your booming website portfolio.
Return on investment
As briefly mentioned above in the risks, most websites have an insane ROI compared with traditional investments.
At the minimum, most sites will sell with around 30-40% return. Of course, the site will have to maintain it’s current earnings to achieve it.
There are circumstances when the ROI can lower, but hopefully, with your experience, there’ll be far more circumstances in which the ROI has greatly increased.
Focus on making your winner’s truly big winners, and either reducing your input on the stagnant ones, selling them off, or simply dropping them completely.
I’m guessing this is the one most of you are interested in website investing for – the lack of a physical office as a necessity.
No longer will you be tied down to one location! No longer will you be forced to keep your current job to pay your rent!
However, it all depends on the types of websites you purchase and the level of maintenance required.
If you think you can live in Bangkok whilst maintaining a local eCommerce store in Vancouver, I’d strongly suggest you think again. Highly passive websites are the way to go if you’re after the traveling lifestyle.
Remember, highly passive sites are more desirable to some and may come with a higher price tag.
No boss is back! This time on the pros side because, seriously, who wants a boss!? Once you overcome the initial laziness love affair in which no one is telling you what to do, your productivity will skyrocket.
You’ll truly be able to focus on the 80/20 for your business, and for other areas in your life as well.
You don’t have to work 2 hours one day whilst spending the other 6 pretending, you don’t have to take lunch with the colleagues who have no ambition, and yes, you will be able to play mini-golf on a Tuesday morning whenever you like.
Be warned, though, once you take the leap into the land of no bosses, it’ll be backbreaking to make the crawl back.
Yes, this is a somewhat biased post. I wouldn’t be in website investing if I thought the negatives drowned out the benefits. Why would anyone do such an activity?
Hopefully, for those not currently investing in websites, you’ve found a few of the areas mentioned above of interest. Let them be a guide to your decision to join the journey or steer to another path.