Welcome to Part TWO of my Q and A Session with Matt Raad from the eBusiness Institute, who is joining us again, to cover some FAQs about making money from websites..make sure you tune in for Part One and Three as well.
“Matt and Liz Raad are Website investors, Angel Investors and leading educators in digital marketing, website design and website monetisation. They are recognized as the Australian experts in Flipping Websites.”
CaptainFI is not a Financial Advisor and the information below is not financial advice. This website is reader-supported, which means we may be paid when you visit links to partner or featured sites, or by advertising on the site. For more information please read my Privacy Policy, Terms of Use, and Financial Disclaimer.
Introduction – Matt Raad
On the pod today we welcome back Matt Raad from the E-Business Institute. Matt and his wife Liz, teach and mentor their students on how to create online business (websites) for passive income.
This podcast is the second in a series of three pods where we unpack a huge series of listener Q and A’s. So tune in for Part Two of our Q and A session and head to the blog for Parts One and Three with even more listener questions answered!
For some more context, you can go back and listen to Episode 11 – (Digital Entrepreneurs Matt and Liz Raad) as well as Episode 23 (Entrepreneurship with Liz Raad). The eBusiness Institute run a Digital Investors course as well as a higher level Champions course which I personally have just graduated from, so we go into a little bit of detail about what’s involved in these courses and how they can help to accelerate you towards financial freedom by boosting your digital skills to create successful online businesses.
Episode 43: Q and A Session with Matt Raad – Part TWO
Show Notes
- Check out my Review of Making Money online
“The key to success and what we understood right from the beginning is when you look for a website to buy, you’re buying something that’s answering a question or solving a problem. And that’s the key to making money online, answer questions and solve problems.”
Matt and Liz Raad
Matt and Liz Raad’s Top financial tips
- Diversify – Whether it is your income sources or your investments, you need to diversify. Create multiple sources of income, and have a broadly diversified portfolio across a range of assets, and a range of sectors within those assets.
- Get Educated – Learn everything you can before making an investment – especially so in business and websites
- Growth mindset – You need to adopt a growth mindset and known your true worth.
- Start small – Make a small investment initially, and then scale that up as you gain experience
Matt and Liz Raad’s top Books and influences
- What they don’t teach you at Harvard business school
- Louise hay – you can heal your life.
- Unlimited power by Tony Robbins.
- Awaken the giant within by Tony Robbins.
- Zig Ziglar
- Tommy Hopkins
Transcript
Episode 43: Q and A Session with Matt Raad – Part TWO
Matt Raad Q & A – PART TWO
Captain Fi: [00:00:00] Ladies and gentlemen, this is your captain speaking. Welcome aboard the Financial Independence Podcast.
Gday and welcome to another episode of Captain Fire, the Financial Independence Podcast, where I open the cockpit to some of the best and brightest in personal finance, as well as those who have reached or are on their way to financial. I. Before we get started, remember nothing said here is financial advice and you should always do your own independent research before making any financial choices.
With that being said, I hope you enjoy the episode and learn something new.[00:01:00]
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Okay, thanks for tuning in. This is part [00:02:00] two of my q and a session with Matt Rad from the E-Business Institute. You can head to the blog to hear part one of our q and a session, and part three will be coming out very soon. Let’s get stuck in.
Some of your student results. I’ve seen from some of the emails and obviously I’ve met a lot of these people through our classes, and online events and conferences. But could you just mention a . Couple of cool student results that you’ve had. Maybe some, ones that have hit it outta the ballpark and then maybe some more average representations.
Matt Raad: Yeah. , that’s a good question. I think what’s important to note is who we.
Train, or we call it retrain with digital skills. And typically we are training people who are, I guess, white collar workers or corporate professional workers who want to transition outta their jobs. They tend to be a little bit older than maybe some of your audience captain Fire.
Most of us have kids or whatever. So in terms of cool success stories. What I love is we have so many people that [00:03:00] are effectively able to do that, which is quit their jobs and work from home so they can raise their kids. That’s basically , when you think about that was Liz and my journey.
Right? And so that’s our goal here is to give people digital skills. And I look at, yeah, across our community and see the people that are changing their lives and realizing they can build up valuable online assets. Part-time whilst they’re still transitioning out of their traditional careers. And a really good example of this, I think, and you’ve seen her many times, and this is Lisa you know the story Captain five.
But I’ll tell you, she bought a simple website for $2,000, just an affiliate website let’s face it, crappy website, and this is one of the sites that she learned on, and she also bought it at the same time, similar time, another site for around a thousand dollars. She learned how to, as you and I were talking, run these things like posting lots of content and stuff like that.
Didn’t make much money at first, on the first one that she did. But she learned the process and I kept saying to her , Hey, that other [00:04:00] $2,000 affiliate site, I think you should work on it. It’s a really good site. And she finally did. This is where the saying comes from in our community. Matt’s always right, , because that site very quickly
Matt’s always running. Yeah. So when she bought it, it was only making 200 bucks a month. This is net profit a month go, Lisa. She applied what I said. it worked and it went to making $2,000 net a month. That sounds pretty cool. People are pretty impressed with that. Then it went to $5,000 a month and then you know the story, and I can say it here, it’s gone way beyond that.
This is when she decided to do this full-time, by the way. And she’s had $30,000 months. Yeah. Unreal. We actually had a broker, one of the world’s leading website brokers at one of our boot camps. He we were talking about this site and he said to Lisa in front of everyone, he said, if you let me sell that next week, I can sell that thing for you for a million dollars.
Now this is a website that cost a two grand.. and this is a mom with two kids who’s traditionally [00:05:00] been a real estate investor and traditional business owner, and her accountant , is in awe of her. He looks at her and goes, what are you doing? Like you don’t have any expenses. I can’t write anything off because there are no expenses on this business.
All profit.
Captain Fi: Yeah, , that’s pretty awesome actually. It reminds me, I’ve gotta reach out to Lisa and see , if she wants to talk about it on the blog, cuz yeah, it’s a pretty impressive story, like 30 grand. Just
Matt Raad: so you know. She’s a very private person and it’s interesting, she’s not ready yet to talk about it publicly because she’s going.
Let’s just say for a bigger goal. Ah, okay. She’s very goal oriented, which is a lot of people in our community. So I’m personally coaching her right now , on that and a couple of other sites so that she can hit a much bigger goal. And then we’re gonna talk about it publicly. . So stay tuned.
Watch what happens there. It’s looking good. Let’s just say that
Captain Fi: You get to that stage and I know, obviously not financial advice, that kind of stuff, but to sell out a site for a million bucks, [00:06:00] even if. , you wanted to convert that to like a traditional share investment, like a million bucks in ETFs, you’re gonna get on average 10 you’re 10%.
Yeah. So a hundred K a year in dividends and capital growth. Or even if that’s 40 grand in dividends and 60 grand in capital growth. Yep. Awesome. Keep a little bit aside and get your next site , or
Matt Raad: maybe, but can I just throw out another thing as a business. . You ever heard the saying, cash flow is king?
Yeah. Just saying, why would I earn a boring 30 or 40 grand a year? She makes that a month. Oh, I know. It’s
Captain Fi: very impressive. Cash flow wise.
Matt Raad: Yeah. My advice to her is don’t sell it and unless you’re bored with it, build it up. Keep it for the cash flow. Even if you just park it for the next five years, you’re gonna make a fortune off it.
Captain Fi: Yeah, it’s a lot of money, isn’t it? But I guess I’m just playing the devil’s advocate with regards to, like me personally, I have a core holding of ETFs index funds, and one of the things that helps me to sleep easy at night is knowing that those dividend [00:07:00] check.
They’re pretty, regular. They’re pretty reliable. Are they even?
Matt Raad: Hang on, I’m gonna question you on that one. Yes. What you are telling me the share market that’s just dropped 30% is safer than a million dollar website that continually pumps out 30 grand a month.
Captain Fi: No, I’m not saying it’s safer or a better investment.
Matt Raad: I, I’m just throwing it out there as a, I’m a business person. You can see where I go. I have, yeah. Learned the hard way. Cash flow is king. Yeah. And anything that pumps out high amounts of cash I’m in. And I don’t wanna let that go. So
Captain Fi: what do you do
Matt Raad: with that? You think of Warren Buffett. What’s the real secret to his success?
Everyone know investing? Yeah. No. But he bought gei. . Yeah. So , how did he really make his money in the early days? Geico is a huge cash generating. Yeah. And then he pays an insurance company pay. Yeah. It just pays out money like you would not believe. And he took a big ownership stake in that. We’re doing the same thing here with websites.
You, you need cash flow funds, everything. So [00:08:00] we luckily had a mentor many years ago, say to Liz and I, Forget about trying to invest until you’re earning a significant six figure income. Now, not everyone’s gonna agree with this guy, right? Yeah. But he had a point and he always said, cash flow first, and then we invest.
And he was a hardcore business person, like Liz and I. He just loved, he loved, funnily enough, he loved buying and selling businesses as well. Yeah. And obviously I need to be very careful about I. Share that because you are who you hang out with, and we’ve only ever hung out with fellow friends who are really into buying and selling business assets, and we view them as better than traditional real estate or, tra I love shares, don’t get me wrong, but it’s funny.
Who you hang around, you become and it really influenced us though. And so we’ve always gone for the cash flow. Why? Because we’ve had the pain of not having cash flow and it sucks. Yeah. And so in a recession, and we’ve been through, I’ve been through four of them in my time. I tell you what I like to [00:09:00] have in a recession is cash flow.
Cash flow. , gimme that any day. How are your dividends looking in a recession? I don’t know. I mean, how’s the underlying asset looking? Now, of course, a business can go bankrupt very easily in a recession depending on the business it is. But again, I see online businesses as potentially a lot safer in a recession.
Having been through, what was it, the G ffc that the 2008, just when we were getting our websites going, and I can tell you they grew during the recession. Not went.
Captain Fi: It’s interesting because I’ve read articles that whilst they’re not buying homes and luxury yachts, they’re doing online shopping, and they’re going onto the website, so Absolutely.
Matt Raad: Yeah. So you’re actually, think about it. No matter what happens out there in the economy, the Internet’s here to stay. I think we can safely assume that, and so it means people are always going to be online. That means eyeballs. No matter what your website is, if there’s eyeballs on it, you will make.
Yeah. Okay. That’s my rule anyway, and that’s my observation. Yeah. It’s just food for thought. I see, oh, [00:10:00] I’m not giving financial advice. I’m just sharing my personal opinion and I do need to be upfront with everyone. I’m very biased because of who I’ve hung out with for the last 30 years, and that’s a bunch of friends who are all.
very successful entrepreneurs through buying and selling businesses, and I’m very biased, but I actually see owning high cash flow businesses as a very smart thing to do. So , to me they’re more attractive than ETFs and stuff like that.
Captain Fi: Yeah. So just, devil’s advocate here , in Lisa’s situation says, she’s making around 30 grand
Matt Raad: a month.
It doesn’t always do that, that’s the record month. It drops up and down as like it depends on the time of year and everything.
Captain Fi: But, so , let’s just, , for argument’s sake, she’s making a good amount of cash flow from the. Um, , What is your recommendation in that situation?
Would you be wanting to diversify into other asset classes, diversify into other websites, or , would she want to be reinvesting that, all that money into growing that site?
Matt Raad: It’s a really good question. It’s one of the things that I’m here to [00:11:00] help my private clients with, and Lisa has asked me for that advice exactly.
And. The actual answer to that is, and anyone listen to how I coach, right? The actual answer to that is I will say to my client, and I’ve, as captain Fire, also advise high net worths and stuff on exactly the same kind of thing what to do with their businesses and stuff. And it always starts out with, Tell me what your goals are.
What do you wanna do in life? Yeah. Like you’re happy to work for the next 10 years. You’re happy to, do you wanna retire and go and travel around the world with your husband and your kids? What do you want to do it’s very much dependent on the person, so I’ve got my opinions, but they’re irrelevant.
It’s what the person wants to do. And then what we do is we help you. The perfect life of your dreams. I know it sounds so, wonderful and everything, but basically that’s what we’re trying to do is, and together, like with my client, whoever the client is, I go, okay, tell me what your goals are.
Alright, let’s now discuss and let’s brainstorm the best strategy for you to [00:12:00] achieve that with the assets that you’ve got. So the assets you have may not be a million dollar website. They’re probably just a $5,000 website or a $2,000 website. So you think of all the coaching calls I’ve done with you, captain Fi, it’s always.
Know it coming from the place of, I know where you want to go because I get you to feed that back to me. And you’ve gotta tell me your goals. So then it’s pretty easy for me, someone who’s as experienced as myself or Liz, know, we’ve helped a lot of people. It’s pretty easy then to figure out the best strategy for you.
So in Lisa’s instance, her goal is she’s a real go-getter, very goal-oriented person. That’s who I love personally. Coaching, by the way. High achieving, very successful. She’s a work at home mom, but she’s very successful with this strategy. And she said to me outright I want to go bigger with this site and I don’t wanna do a full on massive portfolio.
So what I’ve said to her though is, okay, let’s put money back into this site, but at the same time, let’s buy a couple of other sites that [00:13:00] complement it and possibly build out your portfolio. So that was my advice in her instance because why not just for safety or anything, but it’s because she’s got an awesome team, pretty light team.
It’s just two writers and an editor, plus a few other part-time writers. Plus you’ve got this team, you’ve got the opportunity to really capitalize on what you’re doing here, and you can also be building up some other assets because these are assets. , and she can flick off a few others.
So that’s exactly what she’s doing. But it’s the 80 20 rule. She’s putting most of her efforts into that site. Why? Because it’s on a roll. It’s winning.
Captain Fi: It’s interesting having this conversation cuz there’s me and you talking, but the fact that we’re recording for the podcast um, I just wanna point out.
Matt and I have had similar conversations about my website portfolio too. In fact, most of the time it’s Matt saying, what are you doing with these other smaller sites? Just focus on your big ones. Just focused.
Matt Raad: Yeah. And then too, , say in, Lisa’s instance, depending on what she wants to do, because.
She’s got her husband and her kids there, and they’ve got existing [00:14:00] investments. And I’ve said to her are you happy to take some of the cash out and put into traditional investments? Pay down some real estate loans or whatever, but you know, they don’t need to, so they just can keep feeding this compounding machine.
Yeah, and it sounds like everyone’s situation’s different. See, some of your listeners will be, maybe are geared up, they’ve got loans on real estate, , for them, someone listening here might get a website humming, making, five grand a month or 10 grand a month profit for them, their best strategy or smarter strategy in the current environment might be, take some of that profit and use it to pay down my loans.
Yeah,
Captain Fi: That’s been a big thing. With our relationship, I know you’ve talked about Liz and your experience with um, property and then paying off the loans and living debt free and love it. Yeah. That’s certainly really appealed to me.
Matt Raad: We’re very different to most people there.
Again, by another mentor. Very similar idea. Cash flow is king. And being debt free, I highly recommend to anyone listening, it’s a pretty amazing thing to be debt [00:15:00] free, even if it’s just for a short while or whatever. But it’s very freeing when you can run through life debt free and have cash cow machine.
Captain Fi: Yeah. Okay. And that’s obviously a longer answer. It was a very, it is, it
Matt Raad: was a very difficult, we went off on a tangent there. I haven’t even called to some of the other, as some of the other amazing, cool stories actually, let me give you one more example, captain FY that I think your listeners will love because it might be more relevant to your demographic.
You know them quite well, Nathan and Alexa, they’re a young
Captain Fi: couple. Oh, the, yes, the cheese site. Yeah,
Matt Raad: They bought their first side and they know nothing about cheese making. But we, what we’ve gotta remember is Nathan was an electrician and Alexa was working customer service and they’re trying to do the real estate thing.
Yeah. They were trying to become financially independent through real estate. Maybe a lot of your listeners have tried and they found very quickly here in Australia, you max out with the banks and it was very difficult and there’s no cash flow from it. So websites have been their main vehicle and as their.
Big [00:16:00] success was buying that basic little cheese website for a thousand bucks and they got it to making a thousand dollars a month profit and then sold it for $17,000. But since then, they’ve gone on and what they do is they just specialize in exactly what we teach, which is buying rundown little passion sites.
They don’t have to be interested in the niche themselves, but very simple little rundown passion sites for not much money. Fixing them up and in keeping them for the high cash flow. So at the moment, they’ve got a really cool website. They bought this site here in Australia. It’s a all about gardening.
Yeah, the gardening
Captain Fi: site. Yeah. Yeah. That’s awesome. Yeah,
Matt Raad: it’s awesome. They only paid 400 bucks for it, and it’s up to making, it’s now making $4,000 a.
Captain Fi: Yeah, it’s pretty impressive cuz , I have one in the gardening niche as well, and it’s nowhere near as good as theirs. Every time I look at it, I’m like, oh God, I’ve gotta be doing this.
I’ve gotta, I’ve gotta be doing that. .
Matt Raad: And the other side too I’ll mention is just to say, you guys listening, [00:17:00] realize you don’t have to be an expert in the niche. Nathan’s an electrician, he bought a crochet site of which he knows nothing about, and that thing. Pretty much semi passive.
It makes ’em about eight grand a month and they literally, they talk about this at our boot camps and stuff. They literally , like you said, captain Fire. They only work on it that they do is the keyword research. The rest, their team handles and they only work on it two weeks a year. Yeah, that’s pretty awesome.
Eight grand a month. That one is actually growing now too, because they’ve decided to put some more work into it.
Captain Fi: Do you have you’ve got these on YouTube, don’t you Matt? I’ve seen you’ve done interviews with these guys and you’ve got the shorts on. And , plug as well.
Matt’s got a podcast now as well, so I’m pretty sure some of your longer interviews. Yes. You are releasing this podcast now.
Matt Raad: Yeah. These guys are on our Digital Investors podcast. Yeah, so you can tell these stories. There. Nathan, Alexa and Lisa are a really good cross section , we normally train people like Lisa, who are, work at home mums and stuff.
, but we do have a range of younger people on our causes, like Nathan, [00:18:00] Alexa, and like yourself, who are trying to do the fire thing and , what’s worked really well for them is buying these simple little content sites, learning how to fix them up. We call ’em passion sites and like in gardening or dog training or crochet or cheese making and yeah, and then building them up.
This doesn’t happen over night.. It takes a couple of years to build these up, but then they become successful assets. So typically there’s the other question. , everyone asks, how long does it take for Nathan Alexa to get to those? Most of those sites take them one to two years to build up
Captain Fi: and when they’re looking to buy them.
And I know you’ve also used the term diamonds in the rough. Yep. How do you go prospecting? Like how do you find these ones and how do you sort them out from the crap one?
Matt Raad: Captain Fire, you’re asking me specific questions. You gotta do our course. . I don’t wanna give away everything. No. The answer to that is, You need to know what you’re looking for.
It’s like I answered. One of your other questions is where knowledge is so valuable, if you know how to do [00:19:00] due diligence on a website and fix up a website, can you imagine what that skill is worth to you over the next decade? Absolutely.
Captain Fi: So it’s due diligence. It’s it’s knowing how to spot.
Bingo. That’s it. Like proper traffic. Know that they’re a legitimate eyeball. So understanding how Google Analytics works,
Matt Raad: Yeah not just that though, it’s the knowledge of what you’re gonna do with the website. For instance, with that gardening site that Nathan bought, right? He didn’t even have to look at the Google Analytics.
I mean, honestly, he broke a few, but I said it’s perfectly okay on a site like that. He just recognized the opportunity because he had the knowledge to do. Fix it up. . He’d done the rep traps. And you know how we’d say that all the time? You gotta learn first, you gotta do the rep traps because he’d done that before with other websites.
The minute he saw that website for sale, it wasn’t for sale. He approached the guy. And he’s just done it again, actually with another one in the same niche, in the gardening niche. It’s a private approach. He’s just gone out. Virtual door knocking and the minute he saw that site, 400 bucks, he didn’t really have to spend a [00:20:00] lot of time doing due diligence.
Cause 400 bucks is nothing. Yeah. It was more that he knew the knowledge. He already had another site in the gardening nest that he knew was doing quite well. It was, it’s making couple of grand a month that other site. So we just thought for 400 bucks I’ll just rinse and. and he bought it.
Captain Fi: Yeah.
So if anyone out there has a financial independence website they’re looking to sell please contact Kafi. , we Yeah. Write
Matt Raad: some checks. . Awesome. Catchier. See, that’s the thinking. I’ll actually, seriously, that’s how you do it. You gotta let your network know. Yeah. And the, you’re in the market to buy and you’re a cash buyer.
Seriously, anyone listening to this that has a financial independence site, you should be speaking to Captain F I’m sure he’d love to buy it off. Yeah,
Captain Fi: It’s funny, as part of our coaching, I’ve been selling some of my smaller portfolio sites.
And yeah I had a couple that I really loved one that I was really passionate about is the beekeeping one. I was obviously spending way too much time on it. But yeah, I am also selling some of them too Reprioritizing my focus just, onto the bigger sites.
So speaking of buying and selling sites, [00:21:00] what do these things go for, Matt? What’s your typical return on investment or price? And how is that related to the cash flow?
Matt Raad: In the current market, we’re seeing typically three to four times. So what that means is if a site makes a hundred thousand dollars a year, , you’ll typically, if you want to buy that site, it’s gonna cost you around 300,000.
Say it makes you $10,000 a year, you are gonna pay around 30 grand for that. So pretty good cash flow returns. It’s standard business cash flow returns as well. By the way, bricks and mortar businesses sell for the same amount, but they need a lot more investment behind them to keep them.
Yeah. Whereas these things I mean, it’s not set and forget though. You don’t just spend your 30 grand and magically make 10 grand, for the rest of your life type thing. Often they’re not like shares. You do have to do a bit of stuff to them and you’ll have to, fix them up and things like that.
But to get in the game, you’re looking at a three to four times. Similarly conversely, if you’re looking to sell your [00:22:00] website, . If you’ve got a website that makes 10 grand a year, then you would expect to sell it for around 30 to $40,000. Now if you’re smart, you can sell it for a hell of a lot more than that though, if you know what you’re doing.
Yeah.
Captain Fi: And , this reminds me you gave a lecture about rollups and this absolutely blew my mind in the corporates buying. up smaller sites at around that three to four. Multiple. But when they chuck that into their asset pool as a big company and it’s listed, all of a sudden the underlying asset is valued much higher.
So I’m not doing it justice. Maybe you can explain it a bit better and how that’s
Matt Raad: what, that’s why it gets easier, the richer. Because the bigger the deals, the more money you make. So not a recommendation as a beginner for you to rush out there and start doing these big deals. But this is how it’s done.
And this is what was my specialty [00:23:00] all those years ago, working with in m and a and stuff with these private equity firms, what they would do is buy web businesses on a three to four times. They raise funds so they can buy up a whole bunch of them and then they make the conglomerate big enough so that they can IPO o it.
So take it onto the share market and all of a sudden it’s worth, here in Australia, PE ratios are anywhere from 15 to 25 times for manufacturing or wholesale import businesses. That’s what I was hoping these guys buy , they’re making seemingly money out of thin air. Now, , what’s the difference there?
It’s the knowledge and who they know. It’s, that’s what knowledge is worth to you. But , I’ve watched it in front of my very eyes I sold them businesses for, three to 5 million, sometimes $10 million. And then I’d watch them buy multiple businesses like that and then it would be, , what, five times that straightaway,
Captain Fi: overnight.
It’s unreal. And even with Al Wars, with his car website, like that got sold out to a big listed conglomerate. The media, is it nine
Matt Raad: , it [00:24:00] was Channel nine that bought that. That site. Yeah. Channel nine. I couldn’t believe it. So that, that’s the other thing that can happen in this game.
If you hit a big winner and your site goes into the seven and eight figure range, you are laughing because the sale price jumps through the roof. Particularly if it’s a big corporate that wants to buy it because they’re used to paying much higher multiples. So again, this is where people don’t realize this business gets easier the bigger.
And the more successful you get and it’s not a slog and I think unless you’ve been exposed to this, people don’t realize how easy it is to make money out of thin air when you know what you’re doing. I mean, even at a small level, when you think about it, captain Fire, it’s pretty cool what Nathan Lera have done.
Out of thin air. They see this site for 400 bucks, they know what to do with it. Now it’s making four grand a. , I’ve got an even better example, and I know we’re going back down now to small. Everyone’s going no, no. Talk about the big multimillion dollar stuff.
Here’s a really cute example though, that’s way smaller is Annette one of our digital investor students, she learned all this [00:25:00] stuff off us. and she’s a gray nomad, right? Traveling around Australia.
Captain Fi: She bought the site. Yeah. In a caravan park from another nomad that
Matt Raad: was in a private Facebook group that she was in off another Grey nomad.
Yeah. Another traveler years old, and no one else. This lady just stuck it onto the Facebook group and said, Hey, we’re gonna settle down now. We’re stopping traveling around Australia. We’ve had a travel blog for the last 14 years. Does anyone wanna. and not a single other person in that Facebook group made an offer or was interested in it.
So Annette just PMed her and said, oh, I’ll give you five grand for it, do all done. And she’s already had within our community multiple offers of 10,000 and above on the same site. Yeah. That site now is making $4,000 a month. And he’s helping to fund her traveling around Australia same time.
Captain Fi: And that’s awesome.
And so , four grand a month nearly 50 grand a year. So a hundred, $150,000 valuation at a conservative. Three times multi. Absolutely. From five, five grand to 150.
Matt Raad: Yeah that she [00:26:00] won our best website by of the year, last year at our annual conference. Because it’s just such a cool story, because what’s amazing is, Not a single other person recognized the value in that site that lady offered in that Facebook group.
Whereas Annette saw it straight away, as would anyone in our community as well. And that’s why knowledge in this field is worth so much and that’s how come Nathan Alexa got that gardening site for 400 bucks. The owner had no idea what it was worth, and he was happy to sell for 400 bucks cause it didn’t make him any.
The owner, so he was happy to sell it for 400 bucks and in his hands, it wasn’t worth that much. In Nathan Alexa’s hands, it’s worth a lot more. Same as with Annette. The travel site wasn’t actually worth that much money to the owner because they didn’t know how to make money off it. But Annette’s done our course.
She knows how to make money, she’s fixed it up and got it to making four grand a month.
Captain Fi: Yeah, it’s pretty awesome. Like four grand a month. I mean, I honestly, my cost of living is like half of that. . ,
Matt Raad: [00:27:00] so you could travel around Australia. See, that’s what knowledge is worth to you though. Yeah.
And I think that’s why Warren Buffet says, always invest in your knowledge or in your education. I think that’s, it’s,
Captain Fi: . And he says, only invest in things, don’t need
Matt Raad: this. No. He, no. That’s one of his things. No, someone asked him, or one of his famous quotes is, what’s the best investment you can make?
And he says, oh, in yourself. The best investment you can make is in yourself and in your education. Yeah, and hundred percent. I think these are perfect examples of that. And that’s the thing people don’t realize. In my world, I see people make. Money seemingly out of thin air. I did an interview today with the CEO of Flipper and he said the same thing what we’re talking about here, captain Fire with these big deals.
He said, these guys are. , the big buyers, the big corporate buyers, they’re coming into this marketplace now and they’re paying up big money for good websites, really big money for good websites. And then what they’re doing though is because they’re publicly listed, all of a sudden those sites are worth a lot more money on their balance sheet than it is in a private individual’s [00:28:00] hands.
And also they’ve got the money to leverage ’em up even more. So it’s a win-win for everyone. It’s a beautiful time.
Captain Fi: Do you have a side hustle? My side hustle is websites a form of digital real estate. If you wanna learn more about this lucrative side hustle, check out my review of the E-Business Institute and their online self-paced courses.
They cover everything from total beginners right through to advanced web design and how to buy, renovate, and sell websites for profit. As a graduate of Matt and Liz’s courses, I can’t thank them enough for the valuable web skills they gave me. And now I enjoy growing my portfolio of websites for income Captain.
Fire listeners can register for free access to some of these courses by signing up. Using the link at www.captainfi.com/ebusiness institute dash review, build your portfolio of digital real estate and start using websites to make money today.
I’ve just had a realization that like people that are buying index funds, they’re probably actually owning underlying assets, which include websites.[00:29:00]
Matt Raad: Oh, is that about? They
Captain Fi: would be, yeah. So there you go. You probably already own these things.
Matt Raad: That’s, that would be a growing trend. It’s still relatively new. Yeah. But it is definitely, that, that. Big growing trend now, which we are very excited about.
Oh, you wait to see what happens over the next five years in this space. Far out. It’s gonna get really exciting.
Captain Fi: So speaking of Transmat, what are some of the other big trends that are happening in
Matt Raad: the industry? , that’s my favorite one because I loved my days back when I was doing mergers and acquisitions with these big private equity firms and stuff.
It was, as a young entrepreneur, it was very exciting to watch them buy up these multi-million dollar businesses and stuff. And what I’m super excited about is what I talked to today with the CEO of Flipper, the world’s Bigo. Marketplace for website deals. And I always check in with them and see where you know, what’s happening out there.
And I did an interview with them about it. The big end of town now is coming to this space, and that is , in my experience, I saw it happen with bricks and mortar businesses. When that [00:30:00] happens, it, what it means is there’s a ton of money out there, all of a sudden looking to buy websites now. Don’t be small minded here.
Don’t be thinking, oh, that drives up the price of website assets. No, it doesn’t. It drives up the price of website assets at the top end, because what you don’t realize is these big corporate buyers, they’re actually not allowed to spend anything less than a million dollars or less than $10 million. Nice problem to have, by the way, isn’t it
Geez. That’s pretty cool. I remember the first time I saw that. I remember the first time I sat with a famous private equity firm in Sydney. and he came out to meet me and have lunch with me. And it was just through an introduction. And he looks at me and he goes, I know what you’re thinking, Matt.
And then I said, what’s that? And he goes, you are thinking, why the hell would someone like me come and meet someone like you out in the suburbs? And he was very confident, super confident. And he goes, because I need people like you to find me deals because I have a problem. The minimum check I will write for a business is 40 million.
And I, [00:31:00] he saw my jaw hit the ground , and he said, I need to know there are people like you out there looking for businesses like that for me. And it’s exactly the same now with these websites. . So this is what Blake, CEO of Flipper was telling me today. They can’t spend anything less than 10 million.
And what it means though, is there’s a lot of money looking to buy up website assets. Now, start thinking through, they’re allowed to buy small websites. Who’s allowed to buy small websites? Oh, we are Nathan Alexa, the Captain Fires, the Annette’s, the Matt and Lizards, the all Matt and Lizard’s community.
We go out there and buy these small website assets, build them. and then sell them on to the big buyers for a really high multiple. That’s the go. And obviously, we were talking about Lisa before. That’s one of her big goals. That’s how you get the multimillion dollar sellout. ., and that comes back to this dream situation and it is a dream situation.
Not every website deal turns into this. You gotta realize this is a process. It’s business. But [00:32:00] the good news is you can buy diamonds in the rough I, small rundown websites. And if you can fix them up and you’ve got the skills. The cool thing is over the next five to 10 years, we’re gonna see more and more big end buyers come into this space.
Why? Because they’re realizing exactly the same thing that maybe you are realizing, listening to this podcast right now, is that wow, websites rock. They are highly leveraged. Tip a bit of capital in dorm and they can go to the moon. So that’s what these guys want and they’re happy. And also, you gotta remember too, the big corporate buyers, they can’t grow as easily as us small business owners.
Okay? So what have they gotta do? They gotta buy the eyeballs. So it’s just this ultimate win-win situation. It’s almost a perfect storm even with a recession. Doesn’t matter in the last recession. Just so I know, most of your audience are Aussies, aren’t they? Captain Fight.
Captain Fi: Yeah, mostly Aussies, but surprisingly a lot increasing number of Americans as well.
Matt Raad: Americans will know this. The G ffc for all. You Aussies listening to this, and you’re [00:33:00] probably too young to remember the major effects of this, but the GFC really, we didn’t get that affected by it here in Australia. Been in America. It was very bad. Okay, so 2008, 2009, you no wanna know what’s interesting as bad as it.
website valuations still went up, not down. The website space is an interesting place, or website. Incomes still went up because it’s eyeballs. People are still on the internet. That’s how we make money. It’s just off the eyeballs. So I think , you are saying what are the couple of big things that change in the last few years is firstly, The amount of big corporate buyers that are coming into this space, which is really good thing for the marketplace, and real content sites now are hugely valuable.
They’re recognized because of lots of Google updates and things like that. The people who are smart and building what we call high quality websites. That’s where the money is in the future. And the good news is you can do that at home in your Jimmy Jams once you know what you. So I think there are two of the biggest things.
Oh, and actually there is a third big trend [00:34:00] too, which Covid helped along a lot more. People suddenly realize, possibly, like you listening to this podcast, that websites are legitimate businesses and it’s a means to work from home, the hours you want, wherever you want. So website assets have become very popular and a lot more legitimized, which Liz and I thinks a museum.
Because as you all heard, I think. Safer than traditional, businesses or investments anyway. But what it means is there’s a lot more websites out there now, so there’s a really robust buy and sell marketplace out there. So three huge, big new trends that are around in the last two to three years that I think are really exciting for, even total beginners getting online.
This is a hugely exciting.
Captain Fi: Yeah. And the other big thing we’ve seen is ai so chat, G P T of course, Jasper and the G P T three. I , I must admit I don’t know a lot about it. Yeah, the G P T three seem to be pretty good, but I’ve been told that the G P GPT [00:35:00] four, like the next generation of ai, it.
Is really cool. So I mean, even chat g p T, you can just chuck in an answer to chat g p T and it gives you, it’s a fairly tailored but somewhat generic response. It’s not gonna answer how to invest or find the next best website or anything like that.
But in terms of content generation I mean obviously if you are just gonna put spammy shit on your site, it’s not going to rank. But as an aid to content generation, it seems pretty
Matt Raad: good. Absolutely it helps you. It means we can create content a lot quicker cuz you can create the outlines and it even creates subtitles and titles very effectively.
, I’m super impressed with it. And G p T four is gonna be even more awesome. It’s a really cool tool for us working online. Some people are scared by it. I say the opposite. I’m just looking going, oh man. This is just the ultimate productivity tool. Those who know what they’re doing and are doing the opposite of pumping out spam, crappy material are gonna win [00:36:00] big time with this.
And that’s exactly plug for us . That’s exactly what we teach. We’re really good at teaching people to do really good keyword research. That’s honestly the secret to it. That’s what Nathan and Alexa spend all their time doing keyword research, as do you Captain Fi. That’s the moneymaking skill here. It’s not the creating.
The content. So now creating the content’s becoming commoditized and a lot easier. It’s in the smarts. Knowing what to do, knowing what content to create, knowing the keyword research and knowing what to do with the websites. And that’s the bit that I’m really excited about. And combine that with the fact that there’s way more buyers, there’s a huge marketplace for this, plus genuine content websites becoming more and more valuable.
This is, it’s the perfect time to be doing.
Captain Fi: Yeah, so Matt, we’ve been, obviously at the moment there’s a bit of chat about the financial markets. We’ve seen the stimulus effects with Covid. Essentially putting the whole world into lockdown.
Masses of money printed lots of money, currency, I should [00:37:00] say being printed. And now we’re seeing some of the repercussions with interest rate rises. We’ve seen a couple of big global banks shut down and there’s a bit of nervous people around. This is not your first rodeo , you’ve been through what, four or five, four or five of these recessions.
Yeah. What are your thoughts on, I guess, the current market inflation and interest rates and how does that Yeah. Affect people trying to achieve financial
Matt Raad: independence? First of all, I should say who I am and where I’m coming from so that your listeners realize. And if any of you, if you’ve listened to the earlier podcast that I’ve done with Captain Fire, you’ll know I’m very passionate.
Buying and building website assets because they’re highly leveraged and they’re little mini cash cows in their own right now. I am very passionate about that. But I will also say I am a full-time investor and have been for many years, and I invest in all asset classes, including shares. I’m very heavily invested in shares not so much in real estate, but I’m always [00:38:00] looking to buy and sell website businesses online businesses, and that’s where I’m coming from.
So I just wanna say that at the outset because I know one of the other podcasts I was suggesting, my feelings are in this current environment with everything that you just mentioned, captain Fire for me personally and for Liz and a bunch of our friends actually, we’re all just realizing, hang on a minute.
Why would I stick money into the share market? Just at the moment, I’m just holding back off on that because I see it a lot safer to put money into websites based on my deep experience out there and my own personal experiences of having been through four recessions, particularly, I’ve been through two tech booms, so 2001 or the saw, the 2001 crash, we were investing in shares then.
And also the 2008 we’re investing in shares up until then as well. And we’d done extremely well out of it. And also we had the Covid crash and now we’ve got what’s happening now. , for [00:39:00] me personally, I just think it’s a no-brainer for me knowing what I know to put money into websites because they’re just, no matter what happens to the economy, , they’re just cash cow machines.
And one thing that you need to look at very carefully that you mentioned Captain fire interest rates, but also what a lot of people don’t realize is when you’d certainly realize that when you’re an investor is inflation, it’s a massive wealth killer. So you need to be very, you need to be thinking if you’ve got capital, where do you want to allocate it?
Because inflation can eat away at your capital and say, what do you do? Do you stick your money in bonds and high interest term deposits? Or do you stick it into, real estate? It’s a tricky time out there. I mean, I’d ask you Captain Fire what’s the general feeling at the moment, let’s say here in Australia, in the fire movement.
Where are people wanting to put their money?
Captain Fi: It’s an interesting question and I guess it delineates. The difference between speculators or long-term investors. , and I’m not, I can preface this with say, I’m a fairly [00:40:00] junior investor, you I’ve only really been doing this since seriously, 2017, so it’s not, five, five or six years.
It’s not a long time. . But with the movements in the market, I personally am opting to just pay down a bit of debt on my investment property at the moment. So I’m very smart, basically just putting some cash into my offset account. I’m continuing to reinvest money that my business makes into growing the business, and that’s content.
Awesome. And, but I’m not rushing to sell any share. I mean, I’ve been dollar cost averaging just auto invest. Into my shares. And at the highest peak, I think in the shares there was about 980,000. I think it’s down to about nine 30 at the moment. I deliberately try not to look at it.
And when dividends come out, they just get reinvested. Yeah, I personally don’t know how to stock pick. I don’t know how to time the market. So my philosophy is , I’m just gonna [00:41:00] ignore it. However, I know that there are probably people that are, a lot smarter than me. I have more experience that are able to make more money actively investing or certainly not going the passive index fund route.
Matt Raad: Yep. It’s either, so what I would comment is for anyone listening, and I’m not, I’m not giving financial advice here. It is just an observation of, because I’m in a unique position in that for the last 30 years I’ve worked with business owners and typically they’re high net worths and I’ve learnt a lot from hanging around high net worth through, particularly through the gfc.
And so we’re involved in selling businesses and helping them acquire businesses during that time and leading up to that time. And what you wanna think about is you gotta be very careful. Here’s what I’ve learned, and in later years as a full-time investor myself, You gotta watch interest rates and inflation rates very carefully.
If you’re a long, obviously as you are, and I’m presuming your listeners are, cause you’re in the firemen. It’s one of [00:42:00] the things I love about the fire movement, right? You guys are really good at educating yourselves on the value of long-term investing. And it seriously impresses me this fire movement that happens online now.
I think it’s awesome , how you guys help each other and the information and the education that you give each other, that was not around when Liz and I first started trying to figure out how to make money and how to invest long term. I’ve always been fascinated by investing long term and investing in chairs and it’s hard to learn this stuff and I’m seriously impressed with the fire movement.
I think everyone’s got their heads screwed on right there and there’s some really good information out there. But here’s something from my point of view, I have a very unique. Aspect in that, again, hanging around high net worth business owners who are full on about buying and selling businesses, right?
Think about if one of your goals is not just financial independence, but it’s also to, generate a significant amount of wealth in your life. Then think about all [00:43:00] the people in your own life and have a look at ’em. How many have actually made significant wealth? I’ll guarantee the ones that do, the clear majority of them will have done it through their own business at some point.
Yeah, that’s certainly been my experience and so I would suggest no matter where you’re at, It’s a smart move. If one of your goals in life is to generate significant wealth for you at some point to have your own business, okay I know it, it’s super smart. You need to have investments and stuff, that’s fine.
They tend to be more passive and everything. But if you wanna generate significant wealth, particularly if there is a recession, cuz that’s when the greatest opportunities come up by the way. It is a super smart move to have your own business of some kind and because businesses, the biggest benefit of businesses that I see in times like this is they’re cash cow machines and it’s really handy to have cash at hand when there’s sudden flash crashes.
I’m not [00:44:00] saying there’s gonna be a big recession or anything like that, but it’s certainly not looking good out there. Things are gonna be a bit rocky possibly. And. What I’ve learned is it’s, that’s how you get seriously rich, is when you are the bunny with the cash, when everyone else is panicking and you can just quickly jump in and buy cheap assets at fire sale prices.
Now, recently, Liz and I were very fortunate to be able to do this, which was during the Covid crash in the share market. If you remember, captain Fire. I said to everyone, don’t panic. This is, it doesn’t fundamentally make sense. I’m actually buying, it’s the most money I’ve ever made out of shares. Very lucky to just buy at the bottom because we had cash and everyone else’s panicking and the rest is history.
The share market just doubled from there. It was easy. It was like it was the easiest thing ever. But I don’t think we’re heading into time. For me personally, I don’t think we’re heading into times like that again in the near future. I think what we may possibly have is , an actual real recession on our hands and for me personally I think [00:45:00] you do need to be careful out there if you want to generate significant wealth, how you go about doing it now and watch very closely inflation.
It can be a big ERO of your value, whereas you think about if you own a little Cash cow website, we’ve been saying this as, carbon Five for the last decade. We’ve been saying to people, I don’t care whether we’ve got inflation, deflation, stagflation, my little cash cow websites generate me an income every single month, no matter.
And yeah, it’s the cash
Captain Fi: machines. It’s definitely very handy. Like it’s something that’s made me feel a lot better about my investing is having investments in multiple asset classes. Having some allocated to my index funds, having some allocated to property. The crypto piles not looking so hot at the moment.
Mad . No,
Matt Raad: Don’t do this for anyone.
Captain Fi: The website’s online business has been the clear performer. Like obviously I’ve got a good chunk invested in various asset classes. But the, in terms of the percentage return on investment yeah, the business has been the best for me.
So like when people. down to I guess [00:46:00] portfolio and like trying to figure out their risk tolerance. Yeah. There’s another funny quote, I can’t remember. It’s Warren Buffett or Charlie Munger, I think it’s Buffett. He says when the tide goes out, you’ll see who is swimming naked . So absolutely, and he’s talking about obviously risk tolerance.
There’s a lot of tech barriers that made a lot of money pumping crypto before the crash. Now with the interest rates coming up inflation been a bit ridiculous really. Yeah. Asset prices, we’ve seen some corrections. There’s definitely volatility. A lot of people are freaking out, and I guess maybe,
Matt Raad: yeah.
I think that’s why what you are doing is very smart. Like Warren says it’s when interest rates start rising up. Anyone with heavy debt, we’re about to see who’s standing naked. Cuz that’s what, that’s, debt is always the killer. So I guess as a kid, I watched my parents nearly go bust because here in Australia there was this thing called the recession we had to have in 1987.
And mom and dad, that was just when I was finishing up high school and mom and dad were, they were real battlers. [00:47:00] We grew up on farms and they had hardly any money and they’d tried to buy real estate Now interest rates went to 17% very quickly. That was a seriously scary time and they nearly went, busted over it.
And I think from that, I’ve always had an avert because back then I was, I didn’t wanna be poor, like how I grew up and I was determined to figure out how to make money. And I think. Watching mom and dad nearly lose everything. Not that we had a lot, but you know, nearly go bust. It gave me an aversion to debt and I think, now fast forward today and you hear statements like that from Warren Buffett and you realize, that’s smart thinking with interest rates going up, , we’re about to find out who’s standing naked and we’re starting to see that happen anyway.
The share market’s corrected what, 20 to 30% depending on the sort of stocks that you’re holding there. It’s right at an inflection point as we speak potentially. Could go up, could go down, but, you gotta also remember too, I would say if, here’s the other thing you might wanna factor [00:48:00] in, Japan has what, 10 to 20 year sideways market, if not a bear market.
So don’t be thinking that shares can’t. Just keep going down for a long time. There might not be a flash crash. It might be something that goes for 10 years. So what I would be doing in times like this is stress testing where you’re at and looking at what you’re doing with your cash. Reducing some debt.
Obviously that’s a very smart thing to do and be just stress testing and maybe trimming some fat off in some areas if you need all raising a little bit of cash because we don’t know what’s about to happen. Again, I’m not giving financial advice, I’m sharing what Liz and I are doing. For us, we’re obviously still looking at buying website assets because they just generate cash flow and if I can get them at a good price, that’s great too.
But also we are sitting on cash getting ready for the panic cells, which we know will come if there is a. . I think that will be a really good time. It may not happen though, that’s the thing. It’s a weird, [00:49:00] it’s a weird time. No one has a crystal ball, Warren Buffet says. No one knows what’s really gonna happen in the future.
But I noticed he does say in another part, in one of his books, he says, the chances of another recession are 100%. It’s just that no one knows when it’s gonna hit. So there’s always recessions somewhere. So I guess you want to figure out too, you gotta remember as well with investments, like with shares and things like that, there’s not just inflation interest rates, possible recession.
There’s also tax as well. And if you can start training yourself, if you are looking for financial independence, retire early. If it was me, I’d always be thinking cash flow. Like my mentor said to me many years ago, he said to Liz and I, sort your cash flow out first before you really start going full on into investing.
And that’s helped us enormously and I think it’s set us up for who and where we are today by sorting out cash flow. We’ve always got cash flow. Doesn’t matter what [00:50:00] happens, we’re always gonna have cash flow. And no matter what happens, we’ve always got the knowledge. to generate cash flow now, and that means you can sleep well at night.
So I think that’s very worth thinking about. And coming back to my point, if you haven’t thought of a business before, and again, I’m not giving specific financial advice or anything like that, but if you do have a goal of being significantly wealthy and you don’t own your own business, you should probably start learning how to do it or looking into it, because there’s some big benefits to owning your own business, especially if you’re smart and you get the right kind.
It, if it’s a good business and generates lots of cash, it can be very handy , as a way to generate wealth.
Captain Fi: Thanks for listening to part two of my q and a session with Matt. Make sure you tune in for the last part three coming very soon.
Thanks for listening to another episode of the Captain Fire Financial Independence Podcast. To read the transcript or check out the show notes, head over to [00:51:00] www.captainfire.com for all the details. If you have a question for the captain, make sure to get in touch. You might even make it on the airwaves.
You can reach me online through the Captain Fire contact form. Or get in touch through the socials. I’m active on Facebook and Instagram, as well as a number of online finance and investing forums. And finally, remember the information presented on the show and the links provided are for general information purposes only.
They should not be taken as constituting professional financial advice. You should always do your own research when making any financial decisions and make sure it’s appropriate for your personal circumstance.[00:52:00]
Captain FI is a Retired Pilot who lives in Adelaide, South Australia. He is passionate about Financial Independence and writes about Personal Finance and his journey to reach FI at 29, allowing him to retire at 30.
