The Hello Bar is a simple notification bar that engages users and communicates a call to action.

We’re $50,000 Richer.

by J. Money on Tuesday, October 22, 2013

internet neon sign

…But we had to give up a few things to get it ;)

If you recall, our cash flow has slowly been dissipating over the past handful of months. Mainly due to all our new expenses we’ve got going on these days (day care, rental property, other baby stuff), and the fact we’re living on only one income now, but my online businesses haven’t been performing all that sexily either. And due to this our cash account has fallen all the way from over $60,000 earlier in the year, down to just $21,000. Still a solid number indeed, but not when you’re self-employed and should have at least a year’s worth of expenses saved up.

So over the past few months I’ve been doing some soul searching and figuring out where I kind of want to go with this online stuff, as well as how to pump back up these cash reserves. And the thing that kept popping up over and over again was telling me to sell some of my sites I no longer care about and to get back to focusing on those that are important to me. You know, like Budgets Are Sexy and Rockstar Finance, and especially my re-energized consulting biz which has been super fun and rewarding lately. All of which make money, but all of which could make even more if I spent less time paying attention to the projects I’m no longer passionate about.

(Remember those sticky notes I mentioned were on my wall? With the one that says “Dumb $$$ Money?” Well, that’s the stuff I’m talking about here with these non-core sites I manage ;))

Once I got this idea in my head, I started pitching them around a little to gauge interest and figure out if it was even a possibility to offload them right now. To which I got back mixed results. Some wanted to take them off my hands at a fraction of my asking price (par for the course with business, right?), while others didn’t even want to mess with them anymore due to the constantly changing online scene with Google. Who unfortunately/fortunately has the power to make or break a site within a matter of days with its algorithms.

It wasn’t looking that good, until I heard from an old friend and business partner who mentioned he was looking to “get in the game” again. He had learned of my desire to offload some of my sites I’ve collected over the years, and he was willing to make me an offer that he felt could help the both of us out. In a nutshell, he wanted to buy all four sites off of me at right around my asking price, and THEN pay me a sizable chunk to continue running these sits for him too. That way I’d continue receiving a decent income stream from them going forward (which is obviously a concern of mine), but more importantly he could invest in a purely passive way as I’d be doing all the work FOR him ;)

What this meant in numbers was a $50,000 bump in cash for me for handing over ownership, but then a 50% cut of all future profits as a “salary” for continuing to run them as I have been. An intriguing deal that I eventually accepted after weeks and weeks of thinking it over and discussing with multiple friends and family. AKA my wife ;)

So essentially what I have done was trade ownership and 50% of profits, for $50,000 in cash. A good or bad move, depending on how you look at it:

The pros:

  • I now have $50,000 in cash!!! [UPDATE: Here's what we'll be doing with the new $$]
  • And still get 50% of all profits from the sites going forward :)
  • Which means I can now feel a LOT more safe and secure than we have been lately…And I can start to move on from these sites I no longer care for much anymore tooEspecially since they’ve been trending downwards as far as income over time – something I made sure the new owner was made aware of, and which also was appropriately reflected in the sales price.

The cons:

  • I no longer own the four sites
  • I now “lose” 50% of all future profits, which means I need to recoup it elsewhere
  • I haven’t freed up ANY of my time whatsoever to do this
  • I still have to do my duty and pay close attention to these sites since both my salary AND the new owner’s profits depend on it – as much as I’d prefer to move on
  • And lastly, I haven’t freed up any of my time whatsoever! (Have I already mentioned this? ;))

So overall an interesting turn of events, and one I definitely signed up for since cash is our #1 concern at the moment. As well as me wanting to start distancing myself from all those projects I’m no longer that interested in anyways – even though I couldn’t pull the trigger on that completely ;)

Not a perfect plan here, but pretty close to it. The next stage is to figure out what to do after our 12 month contract ends with me working on these sites, which is something I happily signed since it gave both of us ample time to test it out and see how it goes. More of a risk on his behalf than mine, considering I have all the knowledge and he just wants to do things passively, but I’ve promised him I’d help him learn and find him a solid replacement in the event I do end up wanting to part ways later. Which I think is pretty fair?

So that’s the dilly… I offloaded a handful of my sites for $50,000, and continue to make 50% going forward for at least the next full year. All the while *forcing me* to find a way to recoup the 50% loss in the future which was something I strongly needed to get on anyways as I was starting to get complacent. One of the drawbacks of being used to making so much money, only to have it dry up even though you’re still doing the exact same thing in a given day! Crazy how business can be…

What do you think? Smart? Dumb? Am I an idiot for offloading my sites, only to not cut out *any* of my time? Or am I brilliant since I not only still get paid for them, but I STILL reap the rewards of a large chunk of money?? :)

I’ll of course keep y’all updated on how it pans out over time (not like I can avoid it anyways since the success or lack of will be reflected in my monthly net worth numbers!), but right now it *feels* like it was the right move so I have to be happy however it turns out. I took my time to think about everything, ran the numbers over and over again and in different possible events, and every time my gut said it was the smart thing to do. I’d love to get my hands on a crystal ball to prove it, but unfortunately they were all out of them over at Walmart… So fingers crossed!

———
PS: Before you ask, I cannot disclose the sites I’ve sold :( This kind of stuff is usually locked away in the contracts you sign to make sure nothing funky happens once you offload them. But any time I *can* divulge something you know I will! Like these numbers I was able to today…

UPDATE: Here’s what we’ll be doing with the new $50,000 :)

[Photo credit: Julian Burgess]


{ 61 comments… read them below or add one }

1 Sense October 22, 2013 at 5:53 am

That is interesting that you cannot divulge which sites they are, given your unique voice and ample following on THIS blog. Surely some of us would love to hop over and see your other projects (LoveDrop, anyone?), generating more hits and…more money?…from the traffic. In any case, best of luck with the new deal! Happy that you are overall happy with the way it worked out.

Reply

2 J. Money October 22, 2013 at 9:40 am

Well don’t worry, they weren’t anything exciting :) Nor anything I created myself actually. They were all sites I bought purely for business purposes which I managed on the back end. AKA didn’t wrap my “brand” around it.

Oh, and we still have Love Drop! Never passing that to anyone as it was our baby :) Plus, we GAVE all the money away so no one would even WANT to buy it, haha… Good times, good times…

Reply

3 Michael October 22, 2013 at 6:52 am

Interesting. I’m sure the cash bump is useful and it’s nice to retain a piece of the profits. You’ve essentially de-risked yourself a but here. The challenge going forward will be to maintain the motivation to pour your energy into something that is no longer entirely yours. This could be good or bad. Either it reinvigorates you because someone else is now depending on you, or… It won’t and it will become a drag. Hopefully the former. Can you comment on how long you’re obligated to keep working on it?

Reply

4 J. Money October 22, 2013 at 9:43 am

It’ll probably be more of the latter – a drag, haha… but at least the new owner is fully aware of it :) We have a back up plan once I’m ready to dip out 100%. (Pretty much me training someone to take over)

I signed a 12 mo agreement to continue helping with them. But if I want to leave earlier – which could very likely be the case – the new owner has agreed to revisit it. So a pretty good setup.

Reply

5 Lance @ Money Life and More October 22, 2013 at 7:31 am

I think you made a smart move for you. The cash in the bank should more than offset the reduction of income when it comes to easing your mind about financial worries. The contract is only 12 months and you’ll still be making a decent amount from it. Now that you’re all inspired-like from FinCon you can kick it into high gear on what you want to focus on while still maintaining the old sites. You’ll do great :)

Reply

6 J. Money October 22, 2013 at 9:44 am

Thanks man! Exactly the plan too! Just made it back finally yesterday (we broke the 850 miles into TWO days this time, haha) so now I’m playing catch up and then it’s on!! Was a pleasure meeting you too in person finally :) Thanks for the extra drink tickets too! Haha…

Reply

7 Free Money Minute October 22, 2013 at 7:36 am

I am disappointed you cannot share the websites. That was the first question that popped into my mind. I understand where you are coming from. Sounds like a pretty good move. Have you guys thought about how you would handle it if you decided you no longer wanted to run the sites? You would simply lose the “salary” of 50% of the profits and he would be on the hook for maintaining the sites, correct?

Reply

8 J. Money October 22, 2013 at 9:47 am

Yup, if I were to walk away tomorrow I’d lose my 50% salary and the new owner would be on the hook to continue maintaining them. Though I’d never leave ‘em hanging and agreed that I would find a replacement to train and bring up to speed before it was time for me to go – esp as this is a passive investment on their side. They have no intentions of doing any of the work themselves ;)

Reply

9 Free Money Minute October 22, 2013 at 10:46 am

Can you share how much passive income they are receiving for their $50k investment?

Reply

10 J. Money October 22, 2013 at 11:45 am

It’ll vary, but anywhere from $1,000-$3,000/mo.

Reply

11 Free Money Minute October 22, 2013 at 1:52 pm

That is actually a very good return for $50,000. At the low end he will return $6,000 per year and at the high end it will be $18,000 per year. I am assuming the numbers you gave me are are 100% of what the website generates. That would give a 12-18% return. Although that comes with a lot of risk.

Reply

12 J. Money October 22, 2013 at 2:23 pm

nope, that’s 50% of what he’ll be earning… with me getting the other 50% for managing.

Reply

13 Free Money Minute October 22, 2013 at 3:37 pm

Wow, sounds to me like he got a great deal. Even with the risk it seems like a great return with only the potential to go up from there. At least you are in a better cash position and you can bring in some of that income.

Reply

14 J. Money October 22, 2013 at 4:05 pm

yup – it’s a good deal for everyone really. all based on risk levels :) if they explode for the good, he makes a killing! but if they explode for the bad, it all goes down… though really the future affects *both* of us since we’re now equal parts. I just get to not worry about selling them one day if’/when that day comes from the new owner :)

Reply

15 Brian October 22, 2013 at 8:29 am

I agree with your pro and con list. My fear would be that now I would feel like I had to spend more time making those sites better since I am now working for someone and wouldn’t want to disappoint them. So the time commitment might actually go up. I guess what I am trying to say is you were neglecting them for a reason… So in the end I probably would have just sold them off and been done with them.

Reply

16 J. Money October 22, 2013 at 9:49 am

Possibly yeah. Though I’ve gotten it down to a science as far as the actual maintenance part, so it’s more of just a nuisance than anything. But I can tell you that seeing $50,000 in cash in my accounts has lifted a major burden already that I’m pretty damn happy with it all so far, haha… We’ll have to check on me in a month though ;)

Reply

17 Anne @ Unique Gifter October 22, 2013 at 8:29 am

Sounds like a very prudent move to me! The NPV probably works out very well by moving such a large payment to the forefront.
Enjoy the financial padding and here’s hoping your income picks up again.

Reply

18 J. Money October 22, 2013 at 9:50 am

Thanks Anne, appreciate it :)

Reply

19 Mr. 1500 October 22, 2013 at 8:37 am

“So overall an interesting turn of events, and one I definitely signed up for since cash is our #1 concern at the moment.”

So, were you worried that you would burn through the remaining 21K as well?

I read that Jobs biography and one of the things that stuck with me was one of his philosophies about work. It was something like, ‘it’s better to do a couple things really well than do a bunch of things poorly.’ Not saying that you’re doing anything poorly, but it sounds like slowly getting rid of some of your pursuits and focusing on just a couple may be a good long term goal?

Reply

20 J. Money October 22, 2013 at 10:01 am

YUP! That’s kinda right inline with this actually – focusing on just the stuff I love and am passionate about :) I wouldn’t say I was doing poorly on them as I flipped each of the sites for at least 2x-5x what I originally paid for them, but my motivation was certainly gone. And if anything dampened what I was able to do with budgetsaresexy and rockstarfinance/etc…

Now we see if this mental switch helps me work on my passion projects more – even though I’m still technically doing the work on the others :)

Oh, and no – haven’t been worried about draining the original $21k in our savings (other than not being able to max out our SEP Ira and/or roths this year), but I did want a bigger padding again to just release the stress and feel as close to being non-stressful for a while as I could ;) And so far so good!

Reply

21 Brian October 22, 2013 at 8:47 am

I wondered what the 50% incomes would be over the time frame and does it come close to the $50k you would be making up front? If not sounds like a winner and now you have an exit plan to move on to something new.

Reply

22 J. Money October 22, 2013 at 10:03 am

It would take a while for me to start “losing” money with this game plan, and by the point we’d get there I’ll probably already be long gone :) Plus, if that day DOES come sooner, it just means we all made a lot more money than expected! (In a way)

Reply

23 Brian October 22, 2013 at 11:46 am

Sweet. Dropping 50K in the bank sounds good to me them!

Reply

24 John S @ Frugal Rules October 22, 2013 at 8:48 am

Like Lance said, I think you made the smart move for you. I know nothing can really be done about the freeing up of time aspect now, but signing on for only 12 months should help as you still get 50% of the profits and not too long term. I think I would’ve done the same thing as it’s important to have that peace of mind when running your own business.

Reply

25 J. Money October 22, 2013 at 10:04 am

Thanks man. And I’m SO GLAD we were able to finally meet up at the last day of FINCON this weekend! I was really wanting to meet you in person but it was just so dang crazy there and I was all over the place… So glad it worked out :)

Reply

26 John S @ Frugal Rules October 22, 2013 at 2:03 pm

Likewise sir! Every time I saw you, either I was talking to someone or you were talking to someone. Glad it worked out too!

Reply

27 Matt Becker October 22, 2013 at 9:30 am

Certainly an interesting trade-off. I certainly get the desire for increased financial security, which you seem to have handled very well. At the same time, it’s not giving you the opportunity to focus on the smaller number of things you a) seem to enjoy more and b) might be able to provider greater long-term security/opportunity. But you mention that it’s only a 12-month commitment, so there certainly isn’t anything binding here. That gives you the time to figure out if this is really the arrangement you want or if you’d like to go in a different direction.

Reply

28 J. Money October 22, 2013 at 10:06 am

Exactly. Maybe I end up liking working with them still and end up sticking for the long term? It’s doubtful, but you never really know… It’s usually had for me to quit something cold turkey so I try and pad some flexibility with my projects ;)

Reply

29 slug | sunkcostsareirrelevant.com October 22, 2013 at 9:34 am

I’m going to guess that the 12 month contract does not renew. Are there any clawback provisions on the sale if certain earning targets are not met?

Reply

30 J. Money October 22, 2013 at 10:08 am

Nope – not an ounce. I was sure to put that at the top of the Cons list for the buyer and was completely honest and transparent throughout the entire process. The risk is certainly there, or else I’d have just kept them myself and hired my own manager to do all the work ;) But with Google and everyone changing algorithms 24/7, no site is ever completely safe. So I offloaded the more riskier/non fun ones (at a discount because of it too, mind you), and now I only have my *good* ones.

Reply

31 writing2reality October 22, 2013 at 9:51 am

I think this was a tremendous move on your part.

First off, you were able to cash out in a declining revenue environment which boosted your reserves just in case you and the family had some challenges over the course of the next year.

Second, you gave yourself an out. Sure you will continue to work on them but there is nothing stopping you from training and turning things over to someone else the moment you no longer have the desire to give 100%. This is worth far more than the $50,000. Once you have utilized your option to pass on the management to someone else, you can truly maximize your time and energy on your other pursuits without being spread too thin.

Reply

32 J. Money October 22, 2013 at 10:10 am

YUP! You got it. I’m glad you see it the same way – makes me feel a bit better that I ran with it :) You always have to doubt yourself with big moves like this, so any pats on the back feel good, haha… Even if I chose wrong!

Reply

33 Tim October 22, 2013 at 10:13 am

J$ – GREAT NEWS! Love that you actually made your priority a PRIORITY – i.e. you wanted to beef up your cash stores and that’s what you did, while still maintaining income from the properties sold. Love the move because it a) checks off the “get more cash” box, b) keeps money rolling in post-sale, c) allows you to focus on the other sites, which will ideally make even more money than the 50% future (uncertain) profits you cashed in. Great move.

Congrats!

Reply

34 J. Money October 22, 2013 at 11:46 am

Thanks man – so far so good! :)

Reply

35 FF October 22, 2013 at 10:28 am

Sounds pretty good to me. You were uneasy about your cash situation and you found yourself a solution: got the full asking price, plus the ability to earn more income from those projects in the future (in exchange for your time, of course…). But you got the big chunk, and that probably makes it easier to make wise decisions without worrying about cash. If you need to walk away, even if it’s a year away, you’ve got that option too.

I guess it depends on how badly you wanted to free up that time, or if the main thing was just getting some breathing room in your bank account. Sounds like your gut is giving you a good answer, and I’m glad to hear it!

Reply

36 J. Money October 22, 2013 at 11:50 am

Yeah, it was a combination of both really. So figured we hit it about 75% – with the option to take advantage of the other 25% (time) in the future :) Couldn’t have asked for a better set up.

Reply

37 Cat @ Budget Blonde October 22, 2013 at 10:33 am

Congratulations!!!!! I think this is fabulous. :)

Reply

38 moneystepper.com October 22, 2013 at 10:47 am

Could I ask what multiple of current annual earnings the $50k cash represents for the four sites in total?

Reply

39 J. Money October 22, 2013 at 11:52 am

It varied per site, but around 10-15x. Which included discounts for the risky market (aka Google) and for picking up all 4 of them off me. I still actually own one more site, and odds are this same partner will be picking that up in the future too. Or I’ll keep it, cuz it’s a decent one :)

Reply

40 Angie Noll October 22, 2013 at 10:50 am

I think there is a prime opportunity for outsourcing some of this writing to somebody who shares your passion for 25% of the profit…you have blogs full of followers and I am sure you could find a like-minded, talented writer to support you. Your reward for such a find would be a piece of the pie and the ability to free up some of your time for other your other sites that you are drawn to grow and develop.

Reply

41 J. Money October 22, 2013 at 11:53 am

That’s funny that you mention that because it had crossed my mind :) Though I’d probably feel bad cuz it’s probably not worth the work at only 25% of income for whoever would take it all over. And also prob not fair to the new owner either cuz they’d want a solid stable partner and the less you get for work, the less likely you’ll stay on board.

Reply

42 Michelle October 22, 2013 at 11:00 am

I think you made the right decision. Pairing the $50,000 with the 50% to still manage seems like a good deal to me.

Reply

43 dojo October 22, 2013 at 12:30 pm

Congratulations on the sale. I don’t see it as a bad thing. You have more money, more time and also got rid of some sites you weren’t as interested in anymore. I have sold sites of my own (not at such prices though) and it was a good choice.

Reply

44 Shane @ Beating Broke October 22, 2013 at 12:37 pm
45 J. Money October 22, 2013 at 2:24 pm

hahaha… it’s CLOSE to what I’d like to see! But for now, it works ;)

Reply

46 Nick @ ayoungpro.com October 22, 2013 at 1:46 pm

I think you made a wise decision. A bird in the hand is worth two in the bush and all that.

Reply

47 Ben @ The Wealth Gospel October 22, 2013 at 1:59 pm

I think it’s a great idea. From your perspective, the $50k is what you need for the next year to feel secure. And if things don’t work out, you don’t renew the contract and move on. It’s kind of like my job situation right now. I’m in a position I didn’t go to college for and don’t really want, but from a cash perspective, we need it. Once I can get out, I will, but until then, it pays the bills. The last few months have felt like an eternity, but in the end, only six months or a year of my life isn’t that long.

And I can keep complaining about it as long as I’m actively looking for another opportunity :)

Reply

48 J. Money October 22, 2013 at 2:26 pm

Haha.. true that. You’re not allowed to complain if you WEREN’T actively searching though! Which 99% of people do :)

Reply

49 EJ October 22, 2013 at 5:45 pm

Hi Ben
We know that feeling. My partner has spent the last 5 years working in the mines and while that was awesome while we were child free, the working away all the time will eventually take its toll because you miss out on a lot. We have been fortunate in my son’s first year to have a drive in drive out position but it will soon change to flying interstate for a few weeks at a time which is no fun with a growing family. We have the plan to cut a certain amount off bad debt and mortgage and then look at a lower paying job with more time home. Hopefully by then my blog will have increased and working from home will be all we do and being able to travel overseas and finally get back to the US for a holiday. I hope your next big opportunity presents itself soon :)

Reply

50 Money Beagle October 22, 2013 at 2:38 pm

If the new owners are more dedicated and grow the business, your 50% of income will be greater than what it is today.

Reply

51 J. Money October 22, 2013 at 4:07 pm

That’s technically true, yes. But since the new owner will have a passive role, it’s still ultimately up to me :( You never know though – he could find something that works much better than I ever could! Which would be a warm welcome indeed.

Reply

52 Jacob October 22, 2013 at 5:25 pm

Sounds like a great deal both ways. Once you figure out making money online, it’s just a science, and if they know what they’re doing, the hand-off should go fine. Plus, you got some great terms, and they’re assuming all the risk. $50k today is much better then NOT $50k today….just sayin’ :)

Reply

53 EJ October 22, 2013 at 5:35 pm

Hey J Money! Congratulations on the cash injection! I’d love to hear more about how you work out how to buy and sell sites. I read a lot about people who create little niche websites and sell them but havent found a lot of how to actually do this and source buyers etc. It’s easy to say “create a website” but what is actually involved in that ? Do we require special skills? If I could make $50,000 for a few websites I think that’s what I would be doing to get my own cash injection for further investment so I could renovate properties ( one of my ultimate dreams, if you have ever seen flipmen on foxtel) As far as time management goes can you outsource elements of it, or would that eat into your wage too much? Maybe utilise Fiverr? I love that site! Maybe also you could talk to the new owner on your sites about getting a commission for referring new people to the site eg you blog traffic? More $$ for you which could then mean more delegating? Just a thought. How very exciting ! I’d be happy to make $50,000 in a year I was earning $65,000 in my case management job so I’d like to get close to that working from home so please let me know this buy and sell formula! :) All the best with what you choose to do with that sum of cash! EJ

Reply

54 J. Money October 23, 2013 at 10:29 am

Hey EJ – that’s one loaded comment :) I’d love to help out and give specifics, but unfortunately it would become next week until we were done talking abut it, haha… much easier to do via phone or skype one day, but you’d have to hire me for it I’m afraid as I’m overloaded with stuff these days :( I’d suggest looking for awesome bloggers online who talk about the ins and outs of it – maybe SmartPassiveIncome.com? – and go from there. there are a lot of easy parts, and a lot of annoying parts, but it really comes down to research and grunt work. And of course a LOT of time. If it were easy everyone would be making $50,000 every month :) Sorry I can’t be more helpful at the moment.

Reply

55 EJ October 22, 2013 at 8:35 pm

And another question with websites, howto get around facebook rules of only being allowed to have one business of to link a facebook page to?

Reply

56 J. Money October 23, 2013 at 10:31 am

Haven’t heard about that before, but you can make as many “fan pages” for businesses that you want, if that helps?

Reply

57 Christine @ ThePursuitofGreen October 23, 2013 at 1:33 am

Seems like a good move to me! You got a bunch of cash up front and having 50% profits will hopefully keep you motivated to keep maintaining it. You’re feeling a lot better about things now so that will probably go a long way to keeping it positive and ramping things up for you!

Reply

58 EL @ MoneyWatch101 October 24, 2013 at 12:04 pm

Thats great news, if you cant disclouse the websites, maybe you can hint as to how many sites?

Reply

59 J. Money October 25, 2013 at 9:54 am

Sure, I sold 4 of them :)

Reply

60 Chris Guthrie February 28, 2014 at 5:42 am

Hey J Money – just saw you featured in a video on the FinConExpo.com site (think I’ll be at the event this year). Anyway we both timed our sales within a few weeks of each other. Not sure what your policy is on linking to blog posts in comments (especially since this is my first comment here) but I spoke about my sale for $42,000 of a single site I bought:
http://entrepreneurboost.com/55k-website-flip/

In past years I also sold another one of my sites in a six figure deal, but yah I love buying and selling websites so if down the line you have any you want to sell or know others that do feel free to send them my way.

Perhaps I’ll see you in New Orleans in Sept

P.S. Go ahead and remove the link to the post if it’s not cool. Great site been reading for the past 30 minutes… I really should sleep though lol 2:42 AM.

Reply

61 J. Money February 28, 2014 at 8:29 am

Nice man, congrats! Def. cool with you leaving relevant links here – it all helps us reading and who are interested in this kinda stuff :) That’ quite a flip you did – reminds me of real estate, only online! That’s something I want to try out actually – trade an online property for a physical one :)

http://www.budgetsaresexy.com/2012/08/trade-website-for-real-estate/

It’s really only selling one and then picking up the other, logistically, but it just SOUNDS so cool, doesn’t it?? Both have their ups and downsides, but one of these days I’m gonna do it ;)

Stop by anytime, brotha. It’s nice to e-meet you.

Reply

Leave a Comment

Previous post:

Next post: