There are plenty of people making money on the internet now. Some of the concepts change rapidly earning lots of money in the first few months but dying down sooner after. Many digital entrepreneurs first look for other investment ideas online, but increasingly, they are going back to safer, long-term traditional investments to safeguard their new wealth.
Here are some suggestions for traditional and digital assets that compliment each other well.
Real Estate Investing
For digital investors who are used to earning regularly cash flow from niche sites, Amazon FBA, or other online ventures, they look for a similar trait in their traditional investments too. They do not usually want to drop a load of cash into a static investment that doesn’t pay a good amount of highly-visible cashflow on a regular basis. The return doesn’t have to be spectacular – they’re looking for predictable funds to reduce their volatility risk – but the visible cash flow element tends to be important.
Putting some money into a deal is a good idea, but it’s also useful to borrow other people’s money to enhance the total return on the investment. Hard money lenders like lionshare offer loans against good rental properties that will provide plenty of rent payments from tenants to repay their loan. When putting some cash into the deal too, the loan to equity ratio is lower and the risk for a lender is minimized, making it far more likely that a loan will be granted, all other things being equal.
Niche Web Sites
Unlike Amazon FBA, which is a heavily cash-intensive business with money tied up in stock in various Amazon warehouses, and more on the way by cargo boat from China, niche sites don’t require much upfront investment. There’s no stock sitting in a warehouse because the sites review other people’s products and receive a commission if someone chooses to buy a product. It’s all virtual and at arm’s length.
The costs of running a niche site are the domain name, web hosting, content for the site, and any links needed to get into a better position in Google. The upside is a good amount of cash per month once the site is ranking well for many search terms in the search engines. Most sites are valued based on a 20-30-month multiple of their trailing 12 month’s profits, so they’re fairly cheap compared to buying an established business. The annual yield is 40-60% in some cases, but this volatile.
Another interesting route for entrepreneurs that like owning real assets and wish to step away from the online business is to buy infrastructure stocks. These tend to be a lower value than more popular companies and pay regular income. There are different assets to consider including airports, ports, toll booths, and other options. Also, several US mutual funds and other investment formats offer access to US and global infrastructure for investors who don’t like to dabble with individual stock picking.
For digital entrepreneurs looking to diversify away from online assets but still receive regular cash payments from their investments, there are a good number of options. There’s certainly no need to put money into investments like gold or cryptocurrencies that pay zero income.