I’ve explained this on more than one occasion over the years: don’t make the mistake of assuming that those who currently own amazing domains and registered them back in the let’s say 90s used a simple buy-and-hold strategy.

In other words, don’t assume they simply bought a bunch of domains, held on to them for 20 years and now they’re doing great. Please remember that back in the day, registration fees used to be higher than those we pay today. Paying a hundred bucks for two years for a .com may not seem like much but it’s enough to make it clear that those who registered amazing domains several years ago had to somehow come up with a strategy that generated cash flow.

Waiting for domain values to rise is great and everything but in the meantime, you have to put food on the table. Shelter is nice too and unfortunately, these basic necessities cost money. Therefore, those who were earlier to the game then you were, fundamentally speaking, dealing with pretty much the same predicament: how do I generate money while I wait for domain values to rise?

Rick Schwartz, for example, as he mentioned in several interviews as well as on his blog, made quite a bit of money by leveraging and monetizing the traffic his domains were receiving. Other domainers did the same thing. Some, on the other hand, who didn’t make much money through traffic monetization, had another income stream. Perhaps they ran a few popular websites, perhaps they had an offline occupation and so on, the bottom line is that you have to ask yourself first and foremost what is going to put food on the table while you wait.

Times have changed, domain investing is getting closer and closer to becoming mainstream but fundamentally speaking, the same problem remains. If you aren’t able to generate cash flow while you wait for domain values to rise, your business model will fail. It makes me very sad whenever I hear domain investors, especially beginners, say how they are willing to buy new extensions and wait for 5 to 10 years until values go up. Even someone with basic arithmetic skills should be able to figure out why this is utter nonsense. Even .com renewal fees add up, let’s not even talk about new extensions, which tend to be considerably more expensive to renew. Even if they don’t carry premium renewals, which is a different discussion in and of itself.

As a conclusion, if there’s only one thing you should remember after today’s post, it’s that you have to ask yourself the following question: how am I going to put food on the table while I wait for domain values to go up? If you cannot provide a satisfactory answer to this question, I’m sorry to have to say this but sooner or later, you will fail.