Websites As Investment Vehicles?

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kingdf
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Websites As Investment Vehicles?

Post by kingdf » Sun Jun 10, 2018 10:47 am

Maybe this is an odd question because I've always thought of owning websites as similar to owning virtual real estate, but now I'm not so sure. Its starting to seem more like a stock or fund that pays monthly dividends.

I own 4 websites that currently generate income through Adsense, Affiliate links, and book sales. I spend $17 / month /each to keep them running. As I add more to them I've seen the income increase over time, and they should generate increasingly more income over time.

I've recently purchased 2 more websites... 1 will be passive residual ad revenue due to it being a resource site. The 2nd is more to promote a new etsy business.

When websites are bought, developed, and held to produce passive income... do they fall into the realm of business, investment, or some hybrid of the two?
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KyleAAA
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Re: Websites As Investment Vehicles?

Post by KyleAAA » Sun Jun 10, 2018 10:51 am

Business. they are MUCH riskier than stocks, for the most part, and are never truly passive if you want to maintain them as income streams. They have nothing in common with investments as we would describe them and their valuations reflect that.

whiskeyChaser
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Re: Websites As Investment Vehicles?

Post by whiskeyChaser » Sun Jun 10, 2018 11:45 am

Business. they are MUCH riskier than stocks, for the most part, and are never truly passive if you want to maintain them as income streams. They have nothing in common with investments as we would describe them and their valuations reflect that.
+1

kingdf
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Re: Websites As Investment Vehicles?

Post by kingdf » Sun Jun 10, 2018 12:11 pm

KyleAAA wrote:
Sun Jun 10, 2018 10:51 am
Business. they are MUCH riskier than stocks, for the most part, and are never truly passive if you want to maintain them as income streams. They have nothing in common with investments as we would describe them and their valuations reflect that.
How so? I can acquire a website for a year through Godaddy for a $12 risk. Time investment and a good niche can generate $50+ per month or more for the laziest web developer.

After the promotional period, even at the rate of $8 per month to keep it, it still would generate $42 / month profit.

In terms of money $42 isn't much, but in context of ROI it's over 500%.

So what am I missing when you say owning a website solely to generate adsense revenue is "riskier than stock" which requires a higher risk of capital in exchange for much lower rates of return?

The 2 websites that I have fully up, running, and indexed by Google generate about $400 per month combined (adsense + affiliate links), but cost $34 / month to keep online.

I have 2 websites nearing the functional stage, which are producing about $12 per month combined, but cost me $23 to keep online. I'm losing $11 per month on those, but its expected because they aren't finished yet.

I have 2 sites that have little to no content yet so those are a total loss at $16 per month combined, but 1 is for my new etsy business i'm launching in July.

In general, they're cheap to acquire and have the potential for exceptional returns without needing a physical product.

What am I missing?
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tibbitts
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Re: Websites As Investment Vehicles?

Post by tibbitts » Sun Jun 10, 2018 12:20 pm

kingdf wrote:
Sun Jun 10, 2018 12:11 pm
KyleAAA wrote:
Sun Jun 10, 2018 10:51 am
Business. they are MUCH riskier than stocks, for the most part, and are never truly passive if you want to maintain them as income streams. They have nothing in common with investments as we would describe them and their valuations reflect that.
How so? I can acquire a website for a year through Godaddy for a $12 risk. Time investment and a good niche can generate $50+ per month or more for the laziest web developer.

After the promotional period, even at the rate of $8 per month to keep it, it still would generate $42 / month profit.

In terms of money $42 isn't much, but in context of ROI it's over 500%.

So what am I missing when you say owning a website solely to generate adsense revenue is "riskier than stock" which requires a higher risk of capital in exchange for much lower rates of return?

The 2 websites that I have fully up, running, and indexed by Google generate about $400 per month combined (adsense + affiliate links), but cost $34 / month to keep online.

I have 2 websites nearing the functional stage, which are producing about $12 per month combined, but cost me $23 to keep online. I'm losing $11 per month on those, but its expected because they aren't finished yet.

I have 2 sites that have little to no content yet so those are a total loss at $16 per month combined, but 1 is for my new etsy business i'm launching in July.

In general, they're cheap to acquire and have the potential for exceptional returns without needing a physical product.

What am I missing?
You're missing the fact that websites aren't a passive investment and so not comparable. You could mow lawns in the neighborhood and make a 500% ROI too.

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Re: Websites As Investment Vehicles?

Post by KyleAAA » Sun Jun 10, 2018 12:31 pm

kingdf wrote:
Sun Jun 10, 2018 12:11 pm
KyleAAA wrote:
Sun Jun 10, 2018 10:51 am
Business. they are MUCH riskier than stocks, for the most part, and are never truly passive if you want to maintain them as income streams. They have nothing in common with investments as we would describe them and their valuations reflect that.
How so? I can acquire a website for a year through Godaddy for a $12 risk. Time investment and a good niche can generate $50+ per month or more for the laziest web developer.

After the promotional period, even at the rate of $8 per month to keep it, it still would generate $42 / month profit.

In terms of money $42 isn't much, but in context of ROI it's over 500%.

So what am I missing when you say owning a website solely to generate adsense revenue is "riskier than stock" which requires a higher risk of capital in exchange for much lower rates of return?

The 2 websites that I have fully up, running, and indexed by Google generate about $400 per month combined (adsense + affiliate links), but cost $34 / month to keep online.

I have 2 websites nearing the functional stage, which are producing about $12 per month combined, but cost me $23 to keep online. I'm losing $11 per month on those, but its expected because they aren't finished yet.

I have 2 sites that have little to no content yet so those are a total loss at $16 per month combined, but 1 is for my new etsy business i'm launching in July.

In general, they're cheap to acquire and have the potential for exceptional returns without needing a physical product.

What am I missing?
You’re missing the risk. I’ve owned a lot of websites and at one point was making close to 6 figures from them. There were multiple google updates that dropped my income by 80% overnight along the way, and it took a lot of effort to attempt to get back to where I was. But you said it yourself, “time investment.” I’ve never invested ay time in my index funds. Managing a website portfolio requires work.

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Re: Websites As Investment Vehicles?

Post by nisiprius » Sun Jun 10, 2018 12:35 pm

kingdf wrote:
Sun Jun 10, 2018 12:11 pm
How so? I can acquire a website for a year through Godaddy for a $12 risk.
No, you can't.

That's just for the domain name.

Hosting is going to run you on the rough order of $150/year for something really low-end, capable of running a not-for-money personal or club site.

If you don't want everyone to have your name, address, and phone number through WhoIs, it will cost more. If, as you hope, your site develops significant traffic, it will cost more. If you want to sell anything on the website via credit cards, then you need a shopping basket service and a merchant account. It's not going to be $12/year, it's going to be absolute bare-bones $1,000 year for starters.
Time investment and a good niche can generate $50+ per month or more for the laziest web developer.
How can you possibly know such a thing? Even if true, what is the time investment? What is your hourly rate? At $15/hour (which is a good deal less than I used to earn) $50/month will only pay for about an hour a week of time spent on the website.

Heck, about once a month WordPress is either going to tell you to install an update, or that it has auto-installed an update. If you've used plugins, and it's pretty hard to get along without using any--they require periodic updates, too. When the website software and plugins are updated, you'd darn well better spend at least an hour doing bedrock-basic SQA just to make sure the site isn't grossly broken.

Do you honestly believe you can run a profit-making website with less than an hour a week of attention?
What am I missing?
The work that's involved. A truly static website, that never has any fresh material on it, is not going to interest advertisers.

Jim Dahle, who has said on this forum that he makes serious money out of his investment website, also has said he spends about 30 hours a week on it. As his username, EmergDoc, indicates, he's a emergency room doctor, so you tell me what thirty hours of his time is worth.

It's a job. It's work. It's a small business. It's not a passive "investment" and no amount of wishful thinking is going to make it so. It might be a terrific small business for people who have the right idea at the right time and the right dash of entrepreneurial skill and knowhow.

It's also not very good as a one-person business. When you are gone on a nine-week camping road trip and you get an email complaining that your site is down, lots of luck trying to fix it over your smartphone and KOA campsite WiFi... while your sweetie is waiting for you to make the morning coffee.
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gotester2000
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Re: Websites As Investment Vehicles?

Post by gotester2000 » Sun Jun 10, 2018 1:06 pm

Missing point is you need to develop content frequently to generate and maintain traffic for the website to generate revenue without selling anything.
I write content as a side hustle and it needs significant effort. And we are not even talking of the technicalities of maintaining the website.
If it was that easy everybody would have given up jobs and sit at home lapping passive??? revenue.

kingdf
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Re: Websites As Investment Vehicles?

Post by kingdf » Sun Jun 10, 2018 6:35 pm

nisiprius wrote:
Sun Jun 10, 2018 12:35 pm
kingdf wrote:
Sun Jun 10, 2018 12:11 pm
How so? I can acquire a website for a year through Godaddy for a $12 risk.
No, you can't.

That's just for the domain name.
Wrong. Godaddy offers $1 / month hosting for new sites + FREE domain name.
Hosting is going to run you on the rough order of $150/year for something really low-end, capable of running a not-for-money personal or club site.
Wrong. I've been doing web development since 1997 as a hobby. I build all of my own sites so I don't need to hire anyone to do anything.

[quote[
If you don't want everyone to have your name, address, and phone number through WhoIs, it will cost more. If, as you hope, your site develops significant traffic, it will cost more. If you want to sell anything on the website via credit cards, then you need a shopping basket service and a merchant account. It's not going to be $12/year, it's going to be absolute bare-bones $1,000 year for starters.[/quote]

Wrong again... it's 2018. Privacy costs $9.95 /year. I can sell my stuff through Etsy which eliminates the need for any of the above. Still at $12 / year for me. $22 if I want privacy for year 1.
Heck, about once a month WordPress is either going to tell you to install an update, or that it has auto-installed an update. If you've used plugins, and it's pretty hard to get along without using any--they require periodic updates, too. When the website software and plugins are updated, you'd darn well better spend at least an hour doing bedrock-basic SQA just to make sure the site isn't grossly broken.
It's not that bad. 99% of the time nothing breaks the site. It happens on occasion but wordpress now catches it most of the time before it happens and deactivates the problem plugin automatically.
Do you honestly believe you can run a profit-making website with less than an hour a week of attention?
Who said less than an hour a week? Seems like a random number you fabricated. But yeah even the laziest person with a decent know how and skill set can make money. Also keep in mind that I have a subscriber base of over 20,000 active addresses. 50,000+ if you count inactive. I can launch a site pretty easy and get shares, traffic, etc.

I'm not speaking for everyone's situation. Just my own.
The work that's involved. A truly static website, that never has any fresh material on it, is not going to interest advertisers.
I run websites already... and it's 2018. Nobody is out looking for advertisers. Adsense works fine. However I do own a domain that I'm developing now that lawyers will jump on as soon as I get out of Google's 90 day sandbox.
Jim Dahle, who has said on this forum that he makes serious money out of his investment website, also has said he spends about 30 hours a week on it. As his username, EmergDoc, indicates, he's a emergency room doctor, so you tell me what thirty hours of his time is worth.
What does his situation have to do with mine? I'm sure he'll tell you that every situation is different. I spend less than 30 hours a week on my sites now and as stated, they bring in money. Not tons of it, but enough to cover all my bills and have some left over.
It's a job. It's work. It's a small business. It's not a passive "investment" and no amount of wishful thinking is going to make it so. It might be a terrific small business for people who have the right idea at the right time and the right dash of entrepreneurial skill and know how.
Wrong again... My history website that gets 70k visitors / month... I updated it 2 times last month. It took me maybe 4 hours to write the 2 articles I did... made $175 in adsense, $80 in affiliate income, and $1,095 in kindle sales from it... I have tracking codes so I know which site brings in what. Less work than you think, but as I've said before... I have a subscriber base already.
It's also not very good as a one-person business. When you are gone on a nine-week camping road trip and you get an email complaining that your site is down, lots of luck trying to fix it over your smartphone and KOA campsite WiFi... while your sweetie is waiting for you to make the morning coffee.
I wish I had money and time to go on a 9 week camping road trip. LOL.

That's not even remotely an issue. I can always just take my laptop and use my phone as a wifi hotspot assuming I can't find one through Cox... which pops up everywhere as a free courtesy to their customers.

I did take a 3 month hiatus from 1 of my sites a couple years back. It was in its early stages and still managed to bring in about $350 / month profit. But that was then and this is now.

I intentionally set up websites where information is the product that can be automatically sold via Kindle or Createspace. All my kindle links are affiliate links so 2 for 1 there. Time input is usually less than 10 hours / week on my end.
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kingdf
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Re: Websites As Investment Vehicles?

Post by kingdf » Sun Jun 10, 2018 6:45 pm

KyleAAA wrote:
Sun Jun 10, 2018 12:31 pm
You’re missing the risk. I’ve owned a lot of websites and at one point was making close to 6 figures from them. There were multiple google updates that dropped my income by 80% overnight along the way, and it took a lot of effort to attempt to get back to where I was. But you said it yourself, “time investment.” I’ve never invested ay time in my index funds. Managing a website portfolio requires work.
You were using black hat techniques that's why. My sites have gained authority and SERP rankings with the last few updates. I've spend the last 3 years turning my main site into an authority site that links to my other site of closely related but different content.

I'm not using any seo "tactics" or anything other than loving the niche I create content for. I tend to get 100+ shares per article in the first 24 hours and a bunch more after that. It's not viral content but content people in my niche find to be exceptional. My average SERP rank is 9.5 site wide with over 3,000 indexed words and over 200 keywords in the top 3 results.

The new niche I'm putting up a site for has ZERO competition. I was shocked as hell and the niche gets MILLIONS of searchers per month per state... if you were to Google what I'm referring to you'd get a ton of lawyer sites advertising for clients, but no real site offering info on the subject... When I realized I only needed to put up 1 page per state and load them full of info. Spending that $22 was a no brainer.

Now I'm working on a fully automated site that serves nothing but info to people looking for it. Any products they buy will be through affiliate links and nothing I have to physically ship. The only time I'll have to update anything on it is if specific laws about it change, and even then I'm looking at a max of 1 update per page per year after it's 100% set up.

Websites that aren't shady don't get penalized. Websites that people trust don't get penalized. Google penalized people using shady tactics because when everyone else lost their minds about the updates, my sites did better.
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Re: Websites As Investment Vehicles?

Post by Sandtrap » Sun Jun 10, 2018 6:45 pm

Congratulations on your successes and savvy.
:sharebeer
Lot's of great advice here, including "nisiprius".

Websites can be a great business for those with your skills, but not for everyone.

Good luck.
j :D

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Re: Websites As Investment Vehicles?

Post by KyleAAA » Tue Jun 12, 2018 3:15 pm

kingdf wrote:
Sun Jun 10, 2018 6:45 pm
KyleAAA wrote:
Sun Jun 10, 2018 12:31 pm
You’re missing the risk. I’ve owned a lot of websites and at one point was making close to 6 figures from them. There were multiple google updates that dropped my income by 80% overnight along the way, and it took a lot of effort to attempt to get back to where I was. But you said it yourself, “time investment.” I’ve never invested ay time in my index funds. Managing a website portfolio requires work.
You were using black hat techniques that's why. My sites have gained authority and SERP rankings with the last few updates. I've spend the last 3 years turning my main site into an authority site that links to my other site of closely related but different content.

I'm not using any seo "tactics" or anything other than loving the niche I create content for. I tend to get 100+ shares per article in the first 24 hours and a bunch more after that. It's not viral content but content people in my niche find to be exceptional. My average SERP rank is 9.5 site wide with over 3,000 indexed words and over 200 keywords in the top 3 results.

The new niche I'm putting up a site for has ZERO competition. I was shocked as hell and the niche gets MILLIONS of searchers per month per state... if you were to Google what I'm referring to you'd get a ton of lawyer sites advertising for clients, but no real site offering info on the subject... When I realized I only needed to put up 1 page per state and load them full of info. Spending that $22 was a no brainer.

Now I'm working on a fully automated site that serves nothing but info to people looking for it. Any products they buy will be through affiliate links and nothing I have to physically ship. The only time I'll have to update anything on it is if specific laws about it change, and even then I'm looking at a max of 1 update per page per year after it's 100% set up.

Websites that aren't shady don't get penalized. Websites that people trust don't get penalized. Google penalized people using shady tactics because when everyone else lost their minds about the updates, my sites did better.
No, I wasn't using black hat techniques. I did the exact same things you are doing. I also gained traffic for a bunch of updates in a row. Google traffic is just inherently unstable. Sooner or later the risk will hit you, which is why search traffic should never be your primary strategy if you want to build something to last. The real money is in your email list.

Websites that aren't shady ABSOLUTELY get penalized. There is always collateral damage. We are talking about algorithms here. There is no such thing as a perfect algorithm. But most of the time, your site isn't penalized so much as a group of other sites just plain beat you out for your keywords. If you've actually found a lucrative low-competition niche, look out. It won't stay low-competition forever.

But taking everything you just described that you do, isn't it obvious why it's a business and not an investment? You said running your history site took "only" 4 hours last month. I haven't spent 4 hours managing my portfolio total over the last decade.
Last edited by KyleAAA on Tue Jun 12, 2018 3:50 pm, edited 1 time in total.

drg02b
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Re: Websites As Investment Vehicles?

Post by drg02b » Tue Jun 12, 2018 3:21 pm

Buying a Mutual Fund that operates websites would be investing. Buying website credit default swaps would be investing. Buying websites and generating content to bring in money is a business.

Freefun
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Re: Websites As Investment Vehicles?

Post by Freefun » Tue Jun 12, 2018 3:39 pm

Adding another to-do item to my post retirement list. Create kindle books and web sites. Don't care if it's passive, aggressive or just plain silly. Another thing to try.

I love this forum!

(And no, I wouldn't think of this as an "investment" for me).
Remember when you wanted what you currently have?

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