One problem I think many of us have is that we sometimes view our domain investments as a means to make a lot of money quickly. I know a number of people who got started in the industry after reading articles about people like Rick Schwartz making a lot of money with virtual assets, and they want to follow suit because it looks like a great lifestyle filled with “easy money.”
I must admit that the domain investor “lifestyle” I live is great, but it’s not exactly the stereotypical one that people probably think about. I work 12-16 hour days developing, researching, and negotiating, and I work every day. I enjoy what I do, and I set my own hours, so it’s worked out well. If I want to take a day off, I have the ability to do that. There are very few people in the industry who sit back and relax all day while drinking cocktails on the beach at night, although that stereotype does sound relaxing.
All of this said, I want to give a bit of a warning to people who may be new to the industry. Just because you see a specific type of name selling for a lot of money (and growing in value), it doesn’t mean that all similar names are worth the same amount of money. Simply because some people are investing isn’t a good enough reason for you to buy as well unless you know why the name is increasing in value and believe the rationale is correct.
Over the past year, prices in a number of verticals within our industry have dropped considerably, while premium domain names have kept their value. The reason is that many verticals (like 3 and 4 letter domain names) were perceived as being much more valuable than other domain names, and domain investors who were doing most of the buying couldn’t sustain the growth. Eventually, there were many more sellers than buyers, and the prices dropped, tremendously in some cases.
I am not going to preach and tell you what types of names are best to buy and what types of names aren’t. It really isn’t as easy as that. I will say that you should do your due diligence when you buy, and if you are looking to make fast money, you are in the industry at the wrong time. Just about everyone I know is working hard, and there is no such thing as easy money.