An Update on What to Do With My Pool of Money
A couple months ago, I talked about a few different options for what I was going to do with the pool of money I’d accumulated from teaching English abroad in South Korea (for all the details about teaching in Korea, see my other blog: My Life! Teaching in a Korean University). For the original post, see: What Would you Do With $80,000? In the blog post, I outlined the three leading options:
- Dividend paying stocks. I love dividend stocks. Like really, really love them. Almost nothing makes me happier than logging into my brokerage account each month and seeing how much money I accumulated for doing absolutely nothing. Then, I reinvest that money to make more money for doing absolutely nothing.
- Buying some established websites. I think we’re only in the very beginning stages of the Internet real estate boom and the time is ripe for buying. Google seems to be hitting the sketchy websites hard and rewarding websites made by real people, for real people.
- Buying property of some kind in Canada and either living in it or renting it out. I could basically pay cash for a cheap condo or house. The good news is that in those original calculations, I forgot about a $10,000 housing deposit on my place here in Korea. It’s now in my bank account and so I have closer to $92,000 in cash, which makes this option even more feasible.
I’m Leaning Towards Buying Websites
These days, I’m strongly leaning towards the second option of buying some established websites, particularly Amazon affiliate sites. Over on Empire Flippers, a $50,000 website would earn me around $2000 a month which combined with my current investment and online income would be more than enough for me to live on.
Here’s why I’m liking the buying websites option best:
Stocks aren’t Cheap Right Now
As of Feb. 11, 2016 the P/E ratio of the S&P 500 is just over 20. 15 is considered average, 16-19 a bit pricey and anything over 20 is just overpriced. If you’re dollar-cost averaging, don’t stop. However, it’s certainly not a time to be investing such a big lump-sum unless you want to buy energy stocks. Unfortunately, I’m already pretty heavy on those in my portfolio and don’t want to buy more.
Should the stock market crash tomorrow like it did in 2009, I’d transfer at least $50,000 to my brokerage account and go all-in. But, it seems kind of unlikely at this point in time.
Amazon Affiliate Experiment #1: Moderately Successful
My first Amazon affiliate site experiment has been moderately successful. I started this niche site, Reusable Menstrual Cups a few months ago in order to diversity away from the ESL teaching niche. It’s been consistently earning over $100 a month and is increasing steadily as I get more traffic. However, the average price of a menstrual cup is only around $20 and there are no repeat customers so it’ll be hard to scale this site into something bigger. But the biggest benefit by far has been the mistakes I’ve made and what I’ve learned from them.
Amazon Affiliate Experiment #2: Very Initial Stages
My second Amazon affiliate experiment, Kitchen Gadget Reviews is only in the very, very initial stages (I started working on it today!). It’s going to take me a year or two to scale this one up and start earning some real money. I anticipate spending 5-10 hours a week on it for the next year, so it’d be nice to buy a hands-off kind of site that just made money without a lot of work on my end besides perhaps 1-2 posts a week.
Amazon Tiers: Need to Get Higher!
When you link to products on Amazon, people buy them (or other products) and you get a bit of commission. It starts around 4% and goes up to 10%, depending on how many products you sell each month. I currently hit the 6.5-7% tier, but a strategic purchase of another Amazon affiliate site could put me in a higher tier, which would make the current sites I have even more profitable.
My Own Interests
I’m kind of obsessed with building websites. I was obsessed with investing and dividend paying stocks about five years ago. These days, not so much. What I am obsessed with is keyword research, search engine optimization, niche selection, etc. Going to Starbucks and nerding out with this stuff for a few hours makes me feel so happy.
I also think it’d be really fun to buy an established website, analyze it to see what could be done better and then make it happen. I’m going all-in on the digital entrepreneur when I go to Canada so I should have time to do this.
Real Estate: The Math Doesn’t Add Up
Real estate seems like not enough income for too much hassle. After doing the math on buying a cheap condo of some kind and then renting it out, it seems like way too much of a hassle for only a couple hundred bucks a month. And that’s not even factoring in things like maintenance, taxes, increasing strata fees and months with no tenant. I feel kind of depressed even writing this right now.
The Moral of this Story
I’m moving to Canada from South Korea in four days from now! I’ve purposely avoided making any major decisions about how to use my money during this whole moving continents thing. But, the time is now here. Stayed tuned to see what goes down in the website buying world.
And, anyone have any Amazon affiliate sites they’re interested in selling? I’m looking to pay 15-20x monthly earnings for the past 12 months.