If You Had a Million Dollars, How Much of It Would You Put Into Domains?

Apr 03 2010

The answer to this question probably lies in how much money you presently have.  It would also depend on the confidence in your ability to either monetize or flip the domains you purchase.  Every day I hear people say “If I had a little more money I would buy that”  but really, would you?

The fact that most domainers don’t have a lot of extra money to put into domains most likely is their saving grace.  If they had more money they would probably make terrible buying decisions so it’s better off that they just keep doing what they are doing, not making much but not spending much either.  It’s easy to get caught up in auctions or personal likes and dislikes that lead one to spend more on a domain than it’s worth.  Domains are not trophies.  They are tiny little businesses that either need to be developed or flipped.

My answer to the question would be 250K.   Why $250K?   Most of the domains I would buy and sell are in the 10-20K price range and $250K would give me plenty of money to build my portfolio.  I would like to see a return of $25K and that’s possible because I return half that with a $50-60K portfolio.  Money makes money and presently I can get 5% interest safely and 10% if I am a bit riskier so I set this as my benchmarks.  This is the least I expect from a domain purchase.  If I don’t think I can get a 10% per annum return on my domain investment I’ll put my money elsewhere.

In reality I would put most of it into my brick and mortar business because I can make much more money by investing in it but what fun would that be?

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Outsmarting the Dumb, Outworking the Smart

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8 comments

  1. Peter Askew

    me.. I’d prob spend $300k or $400k on one category killing name – a name that receives natural type in traffic I could immediately begin to monetize.. and on a high $ topic.. Carpet.com was one I sniffed around a few years back.. but I had nowhere near the cash to acquire (think the sale price was somewhere around 400k).. and I had a hard time figuring out a web angle to sell carpet.. but I really liked the name (still do)

  2. Michael

    I’d spend $400k getting 3-4 quality prodserv domains that would dominate their respective categories. Then I’d spend $200k on developing them, and keep the remaining $400k for running the new businesses (marketing, legal, accounting, etc).

  3. Attila

    I’d put it in the bank and retire off the 2-3% the bank gives ($20-$30k a year)

    Oh wait, banks stopped 2-3% years ago, damn it.

    I’d invest $400k in domains and $400k in development. The rest $200k be spent on maintenance, staff, better apartment in China. Maybe get some salt water fish. NEMO!!!

  4. Acro

    This is a question that depends on one’s overall cashflow. The max I’ve invested in a single year in domains was $45k. However, if you wanted to play it big, the sky’s the limit. Remember, Marchex paid Yun Ye $164 million dollars for his portfolio!

  5. everything.tv

    I would put 0 into domains. I would just focus on having a bigger forex and equity portfolio and trade. Along with a bigger bankroll for Poker. The million would also mean I could stop reading domain forums and that alone would be worth a lot imo.

  6. Kevin

    If I had $1mil, I’d pay off my debt, buy myself a home, and invest the rest in domains and building out a few of them.

  7. domain report

    Less than 100k would go to domains. I’d pay off some bills and invest the rest in stocks or mutual funds. Less risky than domains and more guarantee of returns if you know what you’re doing. A million bucks would take financial pressure off most people and let them live comfortably for a long while. I’d still keep domaining and building sites though, cause it’s fun. With domaining you have the potential to turn a little money into a lot in a short time, but it’s also good to diversify.

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