Internet Money
January 31, 2005
Some people have been contacting me about how to make money on the Internet. You can make some easy money and some good income streams, but it does take some study and work.
Having said that there is a lot of satisfaction from getting money from advertisers or cheques from affiliate programs versus collecting a pay check from your employer every week. The good thing about making money from an Affiliate Internet site is that once you have put in a lot of the hard work creating the site and making it popular, if it is popular and doesn’t take much maintenance you can continually generate income in the way that authors or song-writers generate income from royalites.
So how do you do it? I think you can classify money making sites into 3 areas. A single website can operate in one or all areas.
- E-Commerce sites
- Content sites
- Affiliate product sites
E-commerce sites
This is the traditional web-site where you use your web-site to sell your goods or services. It is often used by bricks and mortar shops and business attempting to make some extra sales. Amazon is probably the most well-known e-commerce sites around. If you are new in the business look out for new or niche businesses where people are looking to buy hard to find items. E-commerce sites are fairly labor intensive as you have to receive orders, ship goods and provide certain levels of customer service.
Content Sites
Content sites are where you display information on any topic that is of any interest to anyone who cares to want to read about it. If you have a hobby or have some obscure piece of knowledge about something, developing your site can be interesting and a money making labor of love. It takes time for your site to recognized and to see money coming in, but these kind of sites are a good long-term investment. Try to create content that won’t get out-dated easily, so you don’t have to keep updating it. How do you make money? Look for affiliate programs that offer products to your area of interest, or look into using Google Adsense. I will write about this more soon. One great content site that I like is: www.europeforvisitors.com which has thousands of pages of articles and information for people traveling to Europe.
Affiliate Product Sites
This area of the Internet is where the greatest profits can be made in the shortest amount of time. It is where you sign up to an affiliate program, for example an e-commerce site which sells plasma televisions. You then use whatever method you can to get people who are wanting to buy a plasma television to find your site and buy the product through your web-site. See my previous blogs on affiliate programs if you don’t know about affiliate programs. Do a search now on “plasma televisions” now. If you want to earn money in this area you have to be in the top ten sites. How do you get into the top ten? Do a search on “SEO” (search engine optimization). SEO is a huge area of specialization on the Internet where people can provide paid and sometimes free advice on how to improve your search engine rankings. Sometimes no matter how fantastic your web-site is, if no-one can ever find it is pretty useless. I will write more about this soon.
Recommended Programs
Friendfinder.com has several different programs and you can be sure never to miss a cheque from them. You can receive a few cents per click and $1 for every man and $2 for every woman that signs up for free.
Lazy Sunday
January 29, 2005
I am putting in an offer for a place in New Zealand this week. Real-estate agents don’t like using email. It can be very frustrating to wait 2 days for an email only to hear the property has been sold. My accountant and buyer’s agent in New Zealand are very good and my accountant even uses Messenger.
I have had a couple of emails from a real-estate agent in Australia who specializes in selling properties to overseas investors. I am planning to try and set up a company to sell properties in Australia to Japanese investors.
I am working on a web-site and then try to promote it on the Internet as much as possible, such as using google Adsense. Then, I would then start considering advertising in print media. I might also try running my own property seminars.
Japanese and foreigners working in Japan can borrow money in yen at an interest rate of 1.7% which could make the properties cash flow positive. Return on any investments in Japan is also usually low and most properties only decrease in value.
The ideas just keep coming.
Inspiration
January 28, 2005
There’s nothing like reading a classic rags to riches story to get some good inspiration. Read the story here about how a homeless entrepreneur launched $100 million empire.
The good news is the company has almost be formed and have received approval for finance from my bank. I will be putting in at least one offer today on a vacant place with a potential 10 per cent return.
Slow progress
January 26, 2005
I feel like I am moving forward but the pace seems fairly slow. I got word on a very promising deal on a block of flats returning 15% rental renturn, excluding any potential capital gains. Still waiting for further details.
I called an agent this morning who was pretty helpful. Much better than the one I called a couple of weeks ago about the commercial property in Melbourne! Unfortunately the property I was interested in, was already sold - unconditionally. I learnt today that cross-leased means properties on separate titles. Do we say this in Australia? He had a couple of properties that he was just preparing to list. It seems that this might be the way to go - trying to get familiar with a couple of agents rather than trying to continually scan the internet for deals.
My girl-friend told me about a guy who she saw on television who started a business selling XXXXX in the US. It sounds like a great idea and I thought I might have to give it a try by emailing a couple of companies who might be interested in the idea. I won’t divulge much more than this for now.
Still waiting to hear back on finance. I am getting so tired of waiting, I have emailed a couple of mortgage brokers. I will probably also apply on-line at another bank.
If you are still reading this, I thought I might make a mention of “affiliate marketing”. Some people have supposedly become super-rich from it, but for the average Joe, it is a nice way to earn a little bit of beer money. What is affiliate marketing?, I hear you ask. The best example is probably Amazon. Anyone who has a web-site can sign up for the program and if you are accepted (actually I am sure they accept anyone) you put some links to some books, dvds or any of their other products on your site. If someone clicks on the link and buys the product you get about 5% of the purchase price. How easier can it get? If you have a fan site about Harry Potter you could put lots of links to books, dvds and any other merchandise. Since you know the people who visit your web-site are interested in Harry Potter there is a fair chance they will buy something. Average sites get about a 3 per cent click through rate.
One good thing about Amazon is that if someone clicks on your ad or link to Amazon it stores a “cookie” on their PC and for the next 24 hours anything that person buys from Amazon, you credited for the commision! So if you have a recipe site and someone clicks on a link to a recipe book, and then someone else gets on the same PC and buys a book on motor mechanics, you still get the commision!
It sounds pretty easy, but actually your cut from Amazon is pretty low, compared with a lot of other programs out there. However, it is a nice way to get some free books. Stay tuned for more on affiliates.
Down to Work
January 25, 2005
I have now received all of the documentation for creating my trust company. It is a bit of a hassle but I know it is definitely better for the long run. My banker is away for the week, so the finance approval might take a bit of time. I just got my rates from my property in Melbourne and they have valued it at 230,000.
I wonder what the market value is? I can’t wait for the banks valuation. Looking at properties for NZ the rate value is well below the sale price. I wonder how this compares in Australia? BTW, feel free to add comments to my blog. I always have this switched on and would love to get some feedback (other than just email).
I have emailed a couple of agents in NZ and haven’t gotten any reply. I know agents in Australia are pretty bad with email so it doesn’t seem NZ is much better. I doubt that agents in the country areas don’t have much better than a 64K connection with a single shared PC in their office. I have my PC on all the time I am home and have all my email accounts open at work. I just can’t help responding to email as soon as I get it. I really appreciate it when the people I work with operate the same way.
To change the subject, I thought I might write a little about Internet Marketing, aka “Making Money on the Internet”. I am sure everyone has seen all the books and promotional e-books advertised. I probably also would have been sceptical when I first heard about it. It is definitely not a “get quick rich” scheme, it takes a lot of study and hard work (not unlike real-estate investing). With that said, if you put in the hard work you can get good cash returns. And if you set up your systems right, it doesn’t matter if you take a bit of time off, but the cheques and wire-transfers still reach your bank account. If you are time-rich, but money-poor it is a good way to do something to help save for closing costs and saving for deposits.
It would seem real-estate and internet marketing are completely separate industries, but I think the 2 are very close to each other. To make money in real-estate you have to look further and further from your own back-yard, so you either have to start doing a lot of travelling or doing research on the internet. Internet, real-estate related web-sites and tools must be making some good money. It’s kind of like the people who made money selling picks and shovels to gold miners.
Anyway, it is getting late for me and I hope to pick up on this or these topics again - real-estate and internet or affiliate marketing.
Start of the Week
January 24, 2005
I have just added a news feed from Property Talk to my blog. I have had a quick look at their discussion and their forum looks to fairly active. I will be spending a bit more time there this week.
I have started the application process setting up a trust. I just can’t think of a good company name. I guess it will be something related to Japan.
Someone has contacted me about the idea I had about helping Japanese invest in NZ and Australia. It seems like he also had the same idea when he was in Japan, but nothing came out of it. If there are any developers out there who need some buyers please do not hesitate to contact me. I am sure I could get a lot of interest if I organized a seminar or put an advertisement in a magazine here in Japan.
When I started doing this I thought I would have to rely on buyer’s agents to help in finding positive cash flow deals, but I was able to find a couple that looked promising and I would be saving on agent’s fees. I really need to start calling real-estate agents. Once I establish some email contact with agents I could make calling them part of my morning routine.
Finance applications
January 23, 2005
It was snowing a little bit here today in Tokyo. I went to my local bookshop and picked up a travel book on New Zealand so I can study more about the different towns and cities. I also picked up, “Trump, How to Get Rich”.
I completed an on-line application to get pre-approval on a loan with my Australian bank. If I can offer a quick settlement it might put me ahead of the competition when submitting an offer.
I also have an idea to help Japanese and foreigners living in Japan to buy property in Australia and Japan. With interest rates so low here and bonds sometimes actually having negative interest rates people are pretty keen to find good investment opportunities. Although I think most Japanese don’t know that they exist. If there are any developers reading this and would like to work together please let me know. I am also currently working on a Japanese website to advertise.
Applying for finance
January 21, 2005
I have received all the forms to fill in to re-finance my home. I will be spending tomorrow filling them in and going over the details. My bank will do a valuation on the house I own to see how much I will be able to borrow. I also need to get a bank account set up in New Zealand and possibly set up a trust.
After I get my bank account set up I will be transferring the money I make from my web-sites to NZ rather than Japan and Australia. It makes me excited, because it’s the first time for a long time that I have had a real goal and I am actually taking action.
It’s not a lot of money but it is enough to help pay legal fees, valuations and building inspections. I am so keen to get my first property, but I know I need to be patient and to get everything organized first. People have questioned me as to why I want to get more into debt but I plan only to buy properties that are cash flow positive. I have also done pretty well with the capital gains from my first house, which would not have been possible without getting bank finance.
I am also working on developing multiple streams of income so I will be spreading the risk. If I lose my job, or a property is vacant or a web-site stops making money, I will be able to cover the loss from another stream.
The problem is for too long I haven’t really thought about how I should be investing or how I should be using my savings. It was last year that I first read the Rich Dad books. They motivated me a lot to do something but I never really made a plan and I never took any action on all the great ideas I had.
I have always been good at saving but unless you actually do something with the savings that produces income, and grows with inflation it may as well be for nothing. The two times in my life which I have made a lot of money which I still have was first from shares, which I then used to purchase my first house which has almost doubled in value in a period of about three years. Now I just need repeat the process, make money from the internet and re-invest it into property.
My plan for now is to get my finances arranged and to concentrate on getting my first investment property. If everything goes well I will just need to repeat the process ten-fold.
First offer
January 20, 2005
I made my first offer on a place in NZ today, but unfortunately just missed out. It is a bit disheartening but I read that you need to make 10 offers to get one.
I have no intention into getting into a bidding war with anyone. The agent who I was dealing with about the shop hasn’t gotten back to me. I guess he has had enough of my questions! I contacted ANZ to get a loan for a house in NZ but they told me I would have to go through Australia and would lend up to 80 per cent.
My own banker hasn’t gotten back to me yet. Still thinking about setting up a trust. If I am going to get into this seriously I think this is the best option. An accounting firm in NZ sent me some helpful information on property investing in New Zealand. I was thinking of buying some books, but I have started to collect a fair bit of information for free already.
New Zealand Property Investing
January 19, 2005
I was emailing an agent about a shop/office for sale in Australia. The price is $130K and the expected rent is aroun $940 a month. It sounds like a reasonable deal, but I didn’t realize you have to pay GST on the sale! I know I might be able to get this back later, but I think it is ridiculous!
Then I started reading more about NZ. Prices are low, +ve returns are possible, possible growth and NO capital gains tax or stamp duty. The Australian government really knows how to milk everything for extra cash. I just need now to find an agent, property manager, accountant…
