You sometimes hear about successful domainers, who own names that (rightfully) make you drool, yet are dealing with financial difficulties.
It sounds downright ridiculous, doesn’t it?
After all, those who own a stellar portfolio (one word dot coms, LLL dot coms, the whole enchilada) are living the proverbial dream, are they not? Not a care in the world, right?
Well… no, not really.
You see, the main struggle of the domaining industry has always been the liquidity dimension. That, along with the “potential vs. cash on the table” debate and, unfortunately, you can’t pay any bills with potential 🙁
Therefore, we have a problem.
On the one hand, you as an investor might feel you own an asset that has the potential to literally change your life. One sale, that can be all it takes in some cases. One blockbuster sale.
However, you also have financial problems that demand your attention NOW. Maybe a mortgage payment, surely at least some monthly bills, perhaps an unexpected medical emergency or auto repair problem.
Reconciling your desire to extract as much money as possible out of your assets (which frequently entails waiting, usually more than anticipated) with real-world constraints which bring about a chronic need for liquidity… a ridiculously complex problem. A lot of times, some of our biggest “mistakes” are made due to liquidity concerns. Selling a gem that would now fetch a small fortune several years ago because you needed (but did you really NEED it?) a new car. Liquidating a portion of your portfolio to deal with an acute debt problem. The list of examples could go on and on.
These are obviously problems that can’t be “fixed” by a blog post.
My main recommendation would be this: acknowledge if or that you’re asset rich but cash poor and act like it. Avoid adding liabilities to your life, pay attention to the liquidity dimension every now and then and you’ll be on the right track in my opinion. Fortunately, it gets better with time if you do things right… but the “doing things right” dimension (in our case, it tends to revolve around saying no to instant gratification so as to improve your long-term financial robustness) is pretty problematic 🙂