Generating a decent ROI is not enough, you need to also factor in how time-consuming domaining is for you.

This obviously varies a lot from person to person. Some people just own great domains, sit back and relax. They reply to an offer here and there, renew their domains, finalize sales via escrow or other methods and that’s it. Others have a more hands-on approach and list on lots of platforms, auction domains through various venues, do end user outreach and the list could go on and on.

If the first person, the more passive one, tells me he/she generates let’s say $20,000 in pure profits per year, it’s probably a decent deal for him or her. After all, he maybe spends 1-3 hours per month on his portfolio and that’s it. Great. Since the person in question spends so little time time doing domaining-related things, the only dilemma is whether the opportunity cost equation (I have a video on the opportunity cost over at One Minute Economics if you want to learn more about the concept, it’s only *one minute* long, heh) makes sense for his/her capital. Or in other words, in such a situation, you only have to ask yourself whether or not your capital would generate a better ROI if you’d allocate it toward other assets. If the answer is no, keep on doing whatever it is you’re doing domaining-wise.

But what if the second person works quite hard? Maybe 40 hours per week, so let’s say about 2,000 hours yearly?

In that case, the opportunity cost question needs to also be asked when it comes to his TIME!

If you invest 2,000 hours of your time to make $20,000, you’re essentially paying yourself $10 per hour. Which can be enough or not, depending on the country you live in, your current income level and so on. If your current job gets you let’s say $15 per hour, then domaining isn’t an amazing deal for you. This is because while your job generates $15 per hour and only requires your time, your domaining activities generate $10 per hour and also require capital to be parked in this asset class. Doesn’t sound all that great to me 🙁

At the end of the day, it all depends on the particularities of your situation, just please never forget to analyze the TIME dimension as well.