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What We’ll be Doing With This New $50,000

by J. Money on Wednesday, October 23, 2013

vintage cash register

Yesterday I announced that I sold 4 of my non-fun websites for $50,000. I intended to leave it at that, but after reading y’all’s comments and questions, I quickly realized that I omitted a bunch of stuff by accident – specifically with what we’ll be DOING with this extra money now! The best part! Haha…

Before we get to that part though, here are some more clarifications/answers/etc:

  • I didn’t create, or “brand,” any of these sites I sold. They were all picked up purely for business reasons where I merely hired a staff, grew the revenue, and then pocketed whatever profit was leftover after all expenses were paid each month. It was boring, but it was MONEY.
  • If I sold them all last year I would have made $75,000. Ouch. But such is the way things go with business and life, eh? I wasn’t in a position – or motivated – to offload them anyways. You never are when your raking in the money :)
  • I still sold them between 2x-5x what I originally paid for. Not only banking a profit on the flip of them, but also earning all that money coming in every month I owned them as well. You know that saying to run with what you’re good at? This was one of those cases :)
  • We did not sell Love Drop, and we never would. Who’d want to buy a site where you GIVE AWAY all your money anyways? Haha… we’ll be holding on to this life changing project forever in the event we start ‘er back up again one day :) This is our baby.
  • We DID sell Take Our Stuff.com, however in a totally random and separate transaction. For a whopping $1,001, haha… Nate (my biz partner) and I lost interest after 6 months and started moving to both our new homes, so we scaled back from 4 giveaways/mo to 1 a month and then eventually to none. Where I suggested we just shut it down and say our goodbyes, but was later convinced to try out a website flipping site called Flippa and learn how it all works. So we listed TakeOurStuff there for 1 week with no minimum (it’s very much like eBay, but for websites!) and it closed 7 days later at a thousand bucks. Definitely not what we thought it was valued at, but well worth the experience and more than $0.00 had we just pulled the plug. If you were a member of the site – we thank you so much for participating :) We wish the new owner lots of luck, and hope he can grow it much bigger and *cooler* than we could!

If you’d like to ask me anything else, I’m happy to answer. I live for this stuff :) Just leave ‘em in the comments below…

My friend Tim from The Mint Manual summarized this whole thing the best:

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.

Now what will we be USING this money for??

I’ll tell you :) Because you always have to have a plan for your money, right?!

  1. $10,000 will be set aside for future business endeavors – either passively, or for creation
  2. $15,000 will go directly to maxing out our SEP IRA at the end of the tax year. This will save us thousands in tax money, as well as continue pushing us on track to growing our nest egg.
  3. And $25,000 will be tucked into our savings account bed :) Giving us an almost $50,000 total cushion in there now. Allowing us to breathe again…

You know what I *won’t* be doing with this new cash? Putting it into our mortgages :) Right now I need to be able to touch as much money as I can in the unlikely event of an emergency, so there will be no debt paying in progress this time around… That’s the one major downfall to paying off stuff – you can’t get your money back :(

There is, however, a *slight* chance I take that $10k business money and drop it into maxing out both our ROTH IRAs, but we’ve got a few months before we need to make that decision… Right now I’m liking having some personal backing in that department – especially when the money came from other businesses anyways – it’s “like-minded” money! Haha… I know most of you consider every dollar the same, but for us emotional people it’s not ;)

So there you have it…. I still have all my favorite babies online with no intentions of selling, but I’ve sweeped away the sub-pars and have a bigger cushion to sit on looking forward. And again, if anyone’s interested in learning more about this stuff, or wants my help with your own business/blog, I’m happy to help :) If it’s a simple question, just leave it in the comments below, and if it’s a more detailed one, shoot me an email instead.

Tomorrow we’ll be back to “normal” personal finance stuff again… Just had to put on my business hat again while the iron was hot ;) Hope y’all have a great day!

——
Photo cred: zizzybaloobah


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{ 48 comments… read them below or add one }

1 Liquid October 23, 2013 at 6:41 am

Happy hump day! And wow, congrats on the sales! If I had an extra $50K I would put half of it into savings, and use the other half to invest in gold bullion and real estate in Florida or Phoenix :) Glad to see you are not paying down any tax deductible debt. Keeping money on hand is important because liquidity isn’t just used for emergencies, but also new potential for projects and investments :D Warren Buffett said the biggest mistakes he’s made by far are mistakes of omission and not commission. Opportunities have to be seized and having cash on hand will help with whatever life throws your way :)

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2 J. Money October 23, 2013 at 10:11 am

You know it! That Buffett is one smart man :)

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3 Lance @ Money Life and More October 23, 2013 at 7:33 am

I’m glad you had a plan when you did this, although it would take $11k to max out both of your Roth IRAs this year if you haven’t put anything into them yet. The limit is $5,500 this year, which is a good problem to have :)

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4 J. Money October 23, 2013 at 10:11 am

True true… I can finagle an extra $1k from the post for that :)

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5 Rebecca @ Stapler Confessions October 23, 2013 at 8:36 am

Congratulations on the sales! I’ve taken to treating our Roths like they’re retirement accounts with an emergency escape valve if we ever need the cash, so if want to stash some cash in order to have some breathing room, I put it in the Roth.

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6 J. Money October 23, 2013 at 10:14 am

Do you ever get tempted to withdraw from it though? In non-emergencies? I’d be too afraid of that so I just block out all retirement accounts when it comes to cash. If I know I can tap it for a business idea or something I’d be screwed! Haha.. (unless the business takes off ;))

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7 Rebecca @ Stapler Confessions October 24, 2013 at 1:31 pm

No, I haven’t been tempted to withdraw it, even now that I’m laid off. We have little pockets of money in different savings accounts, earmarked for annual expenses. So, we could temporarily dip in there before dipping into the Roths. Then if we haven’t replaced the cash we “borrowed” from those accounts, we would consider tapping in. But that hasn’t happened yet.

The thing is, after April 15, 2014, the money wouldn’t be in there anyway — so if you eventually withdraw it, at least it earned you a little interest while it was there.

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8 J. Money October 25, 2013 at 9:57 am

I love that you have pockets of money everywhere – sounds so magical!

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9 John S @ Frugal Rules October 23, 2013 at 8:51 am

Sounds like a great plan J$! I love that you’re breaking up how you’ll be using the money to beef up the savings and hit the IRA hard. That’s one of my favorite things about running a business, that we can put so much in a SEP and have it directly benefit us tax wise. Double bonus in my book. :)

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10 J. Money October 23, 2013 at 10:15 am

You know it, brotha!

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11 Nicole D. October 23, 2013 at 8:57 am

The only thing i don’t see in your breakout is any set aside for taxes. I guess the $25K savings portion could go to that eventually.

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12 J. Money October 23, 2013 at 10:19 am

You have a good eye :) Fortunately/unfortunately business has been so low that even WITH this nice increase in money I won’t need to be setting much more aside. I’ve paid so much earlier in the year since it was based on last year’s income, that it’ll make up for this nice increase, as well as to the end of the year if you can believe that. An interesting pro to making less which I’ll be blogging about soon :)

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13 Holly@ClubThrifty October 23, 2013 at 9:45 am

Sounds like an awesome plan! A SEP IRA is an awesome tool for retirement for the self-employed. I can’t believe how much money we’re allowed to stash away.

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14 Alicia @ Financial Diffraction October 23, 2013 at 9:50 am

Awesome use of your month. I didn’t realize your contribution room didn’t roll over, which is why Americans are always talking about trying to max their Roths. Here in Canada, the closest thing we have is a TFSA and the contribution room does carry over so that if I miss the $5500 this year I can just put in $11000 next year. I am very thankful for that.

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15 J. Money October 23, 2013 at 10:20 am

Nice! Can you carry it over for even like 10 years if you wanted?? We def. don’t have that here :)

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16 Alicia @ Financial Diffraction October 23, 2013 at 11:11 am

Yep, sure can. The TFSA (tax-free savings account) is a new savings/investment vehicle, and has only been around for 5 years, for a total of $25.5K in room (assuming you were over 18 from that point). Every adult (over 18) gets the contribution room per year, whether or not you are employed, and it carries over indefinitely.

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17 J. Money October 23, 2013 at 9:03 pm

SEXY!!!

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18 Ben @ The Wealth Gospel October 23, 2013 at 10:02 am

Solid plan! And whenever I get to the point where I’m self-employed, if you need any free help to kickstart Love Drop again, I’d be all over that!

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19 J. Money October 23, 2013 at 10:21 am

Sounds good :)

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20 Brian October 23, 2013 at 10:15 am

I really like the $10K for business endeavors. You fattened up your saving & retirement and still have some cash to hopefully turn into more $ in the future. Good stuff!

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21 Sarah Greesonbach October 23, 2013 at 10:16 am

Always love following along with your online business moves… thanks for sharing! If you’re looking for some post ideas, some tips for monetizing blogs would be a great teaser for your blog consulting services! :-P

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22 J. Money October 23, 2013 at 10:23 am

Indeed :) Unfortunately it doesn’t help the majority of readers here since it’s all about personal finance vs blogging, but if I still paid attention to BlogSexier.com it would be perfect! Haha… Maybe one of these days I’ll re-focus on it.

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23 Cat Alford (@BudgetBlonde) October 23, 2013 at 10:21 am

Love that you are taking 10k and reinvesting in the biz and fun, sparkly ideas! :)

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24 Chadnudj October 23, 2013 at 11:19 am

I’m sure you know this, but remember that if you take that $10,000 and put it in a ROTH IRA, you can ALWAYS withdraw the principle (i.e. that same $10,000) without penalty at any point in time.

Now, the market could go down and you could lose some, but since this is money for “future business opportunities” anyways, why not let it do some work for you (i.e. earn some dividends and hopefully some capital gains) in your ROTH right now?

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25 J. Money October 23, 2013 at 9:05 pm

Great point for sure, but I have a “no touchy” policy with my retirement accounts :) If I open up the door just a tiny bit to allow myself to pull some out for whatever reason, the flood gates may swing wide open and I might never go back to saving! Haha… So I don’t even dare test myself. Once it’s in there, it’s in there.

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26 Amanda October 23, 2013 at 11:30 am

Long time reader, first time commenter. If you don’t mind my asking, do you guys place your savings accounts into taxable investments or do you currently keep your savings liquid? My husband and I are going back and forth with this for future savings now that we have a healthy 8 months of living expenses in cash. Thanks for your blog!

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27 J. Money October 23, 2013 at 9:10 pm

Hi long time reader, first time commenter :) What a lucky day today is to hear from you!

We have all our cash savings in a regular savings account through USAA. Well, not super regular as we were able to get one notch higher to a *slightly* better interest rate, but compared to all the other fancy stuff out there it’s pretty simple.

And the reason for this is because we want our money 100% liquid and the ability to pull from it anytime we want 24/7 without any penalties/fees/selling/cashing out/etc.

It may not be the smartest route factually speaking (I’d imagine CDs or other funds would generate more income long term off the money), but for us it works. We put all our other money to work to earn interest/dividends, not our emergency fund $ :) (Plus – these days the difference in what you can earn off it isn’t that drastic anyways, outside of stock investing and more riskier routes)

Big congrats on hitting 8 months though – that’s incredible!! Now that that’s out of the way I’m sure you can have fun investing all the rest in the future, eh?

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28 Kevin Watts @ GraduatingFromDebt.com October 23, 2013 at 11:51 am

Great! I am glad to see that you have awesome plan. You know well how to mange money. I also like your idea of not using money for mortgage.

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29 Broke Millennial October 23, 2013 at 12:54 pm

This is a really awesome story. I didn’t realize you had so many sites out there!

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30 J. Money October 23, 2013 at 9:12 pm

I’m tricky like that ;)

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31 Michelle October 23, 2013 at 1:29 pm

I like your plan for how you will be using this $50K, sounds smart to me!

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32 Carla October 23, 2013 at 1:57 pm

Have you done a comprehensive post on your internet profession? I’ve been reading for a while, but I’m still trying to get a handle on what you do.

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33 J. Money October 23, 2013 at 9:16 pm

Haha, no…. But here it is in a nutshell :)

1) I blog
2) I consult on blogging
3) I launch random projects and hope one of them explodes and makes me lots and lots of money one day :) And if/when they don’t, I shut them down or sell them or buy other projects with the same intentions.

There’s of course a ton of details/skills/energy that goes into all of the above, but when someone asks what I “do,” that usually answers it.

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34 moneystepper.com October 23, 2013 at 2:06 pm

Good to have the update and that sounds like a pretty good plan for the money.

That’s an impressive ROI on the businesses, especially if they were profitable in the interim (and given the future income you are still entitled to)…

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35 J. Money October 23, 2013 at 9:17 pm

yup! profitable after 2-4 months each, and then all the future stuff too as you mentioned… Can’t really complain.

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36 Pauline @RFIndependence October 23, 2013 at 4:29 pm

Congrats! Now you have cash for a house in Guatemala :)

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37 J. Money October 23, 2013 at 9:17 pm

HAH! Don’t think that didn’t cross my mind for a few seconds either ;)

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38 Kyle | Rather-Be-Shopping.com October 23, 2013 at 4:48 pm

Congrats on the sales, looks like a great move from where I’m standing. Also a smart move to max out your SEP. I have been doing the same in recent years with my SEP and it is the best way I can find to tell the Fed to sit on it and spin.

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39 Marissa@Thirtysixmonths October 23, 2013 at 10:56 pm

Awesome! Congratulations on the sales! If this happened to me, half would most likely go to my savings. The rest will be divided accordingly to investment and business creation just like you did. Since this is an extra money I would probably not use it to pay debt as well. Hats off to you for having a great plan and making everything work to your advantage. Good choices J!

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40 J. Money October 25, 2013 at 10:00 am

Thanks Marissa :) Hope things on your side are well too!

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41 Christine @ ThePursuitofGreen October 24, 2013 at 12:39 am

Must have been fun figuring out what to do with a large amount of cash!

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42 EL @ MoneyWatch101 October 24, 2013 at 12:06 pm

Cool breakdown. If invested right that 50K can make you at least 2500 a year.

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43 J. Money October 25, 2013 at 9:58 am

Yeah? I’d like to know that secret :)

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44 Donny @ Personal Income October 24, 2013 at 2:19 pm

I like the fact that you are putting a portion of your earnings back into the growth of your business. It is all about creating more positive monthly cash flow.

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45 Retire By 40 October 25, 2013 at 11:20 am

Great job! I really need to learn how to do that. I’m terrible at hiring people and tend to want to do everything myself.

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46 J. Money October 25, 2013 at 11:50 am

It’s not easy, that’s for sure!

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47 James November 4, 2013 at 10:02 am

Can you get an offset or redraw on your mortgage?

You should be able to take any money back that you put into it and reduce your interest rate at the same time :)

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48 J. Money November 4, 2013 at 3:07 pm

No luck when your house is underwater :) But even if it was, I’d prefer to have the extra cash laying around at the moment… Once business is back on track I’ll consider trying to finagle a way to refinance and save more later on. If we haven’t sold it by then! (I don’t want it anymore, haha…)

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