Have you been looking for new and interesting ways to allocate your profits? If so, you may want to consider building out your portfolio of profit-producing websites.
Building a website portfolio can be a great way to build your wealth over time, and there are a number of different ways to do it. In this podcast episode, digital expert Matt Raad introduces one option: Building out a portfolio of alternative passive websites. Tune in to hear more.
Podcast: Download (Duration: 35:45 — 36.5MB)
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There is a whole market out there that wants to know what Matt knows. [02:21]
When you’re ready to go beyond basics, this is what James’s guest can do for you. [05:41]
Content sites have the potential to earn big – James and Matt discuss how. [12:55]
People have money to spend – the question is how much, and where? [16:43]
When people ask James which biz ops are good, this is what he tells them. [21:03]
A site bought for two grand now makes $30,000 a month! [23:33]
Matt sets certain rules for the advanced. [27:09]
A lot of advanced guys don’t realize the size of the asset they’re sitting on. [31:49]
Discover your ideal business model with James’s help
Disclaimer: Neither James nor Matt are financial advisers, and this is not financial advice.
This is not the first time we hear Matt Raad talk about buying digital real estate. In past guestings, however, he’s been accompanied by his lovely and equally knowledgeable wife, Liz.
Alternative passive website portfolio building
Today’s topic, alternative passive website portfolio building, is Matt’s absolute passion, he says, a passion Liz thought would better come through if she sat this episode out.
For a bit of background, James met the couple through a mutual friend, and they’ve had many great chats. James discovered they were strong with websites – website wheeling, dealing, buying, selling, value-adding. They gave James some great tips, which he implemented, and they’ve been his go-to in that area since.
Today, James wants to talk about alternative passive website portfolio building, because the market is changing. He’s hearing it. And he wanted his audience to hear it first from Matt.
A real market for Matt’s knowledge
James himself had heard about the topic from enough people that he wanted to have this talk. Now note, neither he nor Matt are financial planners or advisors. This is just a discussion.
Matt, however, has a solid background of M&A. And big M&A firms are now interested in the digital space.
In James’s community as well, people want to know, where do I put my money? They’re a mixed bag, doing mutual funds, properties and developments, people looking to try Metaverse and NFT stuff. But there’s also a growing trend of people with great skills who can start doing what Matt does.
Traditionally, Matt and Liz’s market has been beginners wanting to learn, and James has always sent them to the couple to learn the basics. That alone has been life-changing for many.
When you want to go more advanced…
Now James has more advanced individuals, partners of his with agencies, who want to buy Matt and Liz’s training and apply it at a higher level. And whereas Matt restricts beginners to paying a certain value for sites, he’s given some of these advanced people freer reign to spend more. Apparently, if you bring skills to the table, spending X amount can speed up your progress.
Where does this sit with passive, asks James? What if you don’t want to rat out the deals, do the due diligence and develop the sites? What are the options? And what of the changes going on, the current potential for inflation and the fact that bank accounts pay nothing?
What many people don’t know is that Matt and Liz used to do big multimillion dollar deals, helping high net worths buy and sell businesses. And they owned their own manufacturing business.
The couple switched to doing online what they did with bricks and mortar businesses, with one important rule – no physical stock or inventory.
Today, while Matt is not allowed to give financial advice, he and Liz have helped a lot of high net worths over the last 30 years with the structuring of their businesses. This has given them unique insight into how to structure particularly multimillion dollar businesses, whether online or offline, for an exit.
What’s interesting now in the marketplace, since the pandemic, is passive involvement in websites is now a possibility for people who couldn’t normally get into such private equity deals. No longer do you need high net worth to access such deals.
Worldwide, Matt and Liz are seeing smaller, they’d call them micro private equity people, who are good at running websites, and have had some success like themselves. They’re starting up micro funds of not even tens of millions, say just a couple of mil, five or 10 mil, and going out and buying websites.
What they do is run everything, and bring in, for lack of a better term, micro private equity. They raise funds off people and guarantee a certain return.
“Website businesses are a no-brainer these days. – Matt Raad”
Basically, it’s boom times, says Matt. You can’t have cash in the bank. Everyone needs money working for them. Website businesses are a no-brainer these days.
And what he and Liz are seeing in their industry is that content sites rock. People don’t want to fund something that just sucks up money. They want to buy content sites. That goes for big corporates as well. And that’s what Matt and Liz have been teaching for the last 10 years.
If you have a website and are a good operator, you could potentially bring onboard outside funds, and really take it to the next level. More importantly, if you’re looking for alternative options, you don’t have to go out and run this site yourself even, anymore.
You can just put money passively with these private equity funds. You can passively spend in the website, someone else will run it, you just put your money into the fund, just like a traditional PE firm.
The potential ROI in content sites
James is sitting on a content site of his own, growing it nice and fat. One day, he says, someone will write a big check for it. Because it’s in an expanding market, and has got a vise grip on it. And he hasn’t even started marketing it yet.
It’s all passive, doesn’t rely on James in any way whatsoever. He just contributes pictures, which he takes anyway.
More so now than ever, says Matt, content is an actual asset. Every bit of content, if you can get it to rank, becomes better than money in the bank. He and Liz have been doing content sites for 10 years. They can look at their old sites, even crappy little sites, over a decade, and the ROI is through the roof.
The content that cost Matt 30 or 50 bucks years ago now is paying money. Even at a one percent conversion, do the numbers over five years – this is 24/7, five years. Talk about Warren Buffett’s ultimate compounding machines.
Even bog standard content with Google ads on it, monetized, is worth a fortune, especially over the next five years. That’s what the big buyers are wanting to buy now.
How big an investment, and where?
James has watched the news. He knows people do not want to go back to work. Online is more than just a fad. It’s a real thing. Say someone has money in an offset account. How much do they have to spend in some of these companies? And how do they find them?
“Online is more than just a fad. It’s a real thing. – James Schramko”
The good news, says Matt, is there are now little micro companies. And you can put as little as say, 20 grand into a deal. These are people that are good operators. He’s interviewed many of them, and their backgrounds are quite similar to his and James’s, particularly his and Liz’s. They started out with AdSense sites a decade or so ago, and got good at doing six to seven-figure websites off AdSense – passive, semi-passive sites that just rely on content.
Now they’re raising money, and you can decide to spend, put in say 20 grand, 25 grand. Anyone can do this, and over the next five years, Matt predicts, there’s going to be a lot more operators out there doing similar.
That means you need to learn how to do due diligence, to understand what they’re doing with your money, just as you would with any alternative investments. So James’s listeners are at an advantage if they’ve been online, and have made money online in the past. They can look at a website and actually read what they’re looking at.
The one biz opp program James would recommend
Due diligence is crucial in portfolio building. James has had discussions on that with another friend, Salena, talking about alternative investments.
Alternative options are not for everyone. What James does love about Matt and Liz’s stuff is how accessible it is. Someone can literally start from scratch, sign into eBusiness Institute, and learn from the beginning.
A lot of the people James coaches are tempted to go into the biz op market, where often people are selling very high-ticket stuff to an unsophisticated buyer with the big promise of some huge outcome. When they ask James which biz ops are good, he tells them he actually only knows of one.
Since coaching Matt and Liz, James has seen their business thrive, and importantly, he sees they’re getting deal flow. He’s happily run students through them and is super happy with what they’re doing. If people come into their program, and are building assets, it sounds like there’s a chance they might have an avenue to sell those if they want.
The $2K site that now makes $30,000 a month
What’s cool, says Matt, is at one of their last boot camps, one of their students named Lisa had a simple affiliate site she’d bought for two grand. All she did was post content on it, as Matt and Liz had taught her. Eventually she was making money passively, and Matt told her to stick at it.
Today that site makes $30,000 a month in net profit. And at their last bootcamp, one of the world’s top website brokers heard Lisa’s story and was blown away. If Lisa wanted him to, he said, he would value that site and sell it in the next two weeks for over a million dollars.
Lisa declined, and she and Matt have plans to double her site’s earnings in the next 12 months.
Quite a number of Matt and Liz’s students have sites that will probably be sold to private equity type firms over the years. And they’ll be really good assets, because they’re passive content sites.
They’ve got options, says James. Lisa could continue to roll up and just get bigger. She could sell out at some point, pay some capital gains, probably, and then put what’s left into a passive fund, and then just participate in a return and then just decide if the risk is worthwhile, if the fund is any good or not.
She could maybe even receive some money from one of these funds and not sell, so she doesn’t have to trigger the capital gains. Maybe she can just get money to grow up faster and be a sort of semi-active participant in that, and grow it. That’s how a client of James is selling his agency.
He’s taking a portion of money, keeping a seat at the table, and being part of the bigger roll up, and then getting vested over time, and then he can exit. So there’s lots of ways to do this if you’ve got the skills. If you don’t have the skills, you can get the skills from Matt and Liz.
What the rules are for the advanced
Let’s talk about the advanced, says James, because he does get a couple of them.
What Matt and Liz find with the advanced people is that it’s not the advanced stuff that moves the needle. It’s the fundamentals. They need the big concept, just like when they first met James, and straightaway said, Oh, mate, stick Ezoic on that site, get the content going.
That’s right, says James, he’s sitting on a goldmine, and Matt described what to do with it.
That’s how they can help advanced people, Matt thinks. He’s met legends in SEO who are earning a pittance compared to what they could make with their skill set. He shows them how beginner clients are earning more than they are off basic affiliate sites. And he encourages them to think ahead to the exit, when some big company comes to buy their site.
Matt would recommend, even to someone like Lisa, don’t sell out for big cash payment, keep 20 percent equity in there or something. She can structure deals and talk to Matt and Liz about it. They’ve been helping people structure those kinds of deals for 30 years. You can typically, keep say 20 to 30 percent equity in, and they will even bring in the team. And more importantly, they bring in lots of capital to grow it to the next level.
Then it gets on the radar of the publicly listed companies, and that’s when the multiples go through the roof. Instead of getting a three to four times multiple on the sale price, you can get five to six. If you can keep equity if it goes to an IPO, that’s where you get seriously rich, when you’re making hundreds of millions, potentially, particularly in America, but it’s happening in Australia as well.
If you’re advanced, says Matt, his advice would be is, plan out your life, it actually starts with your vision for your life. What do you want to do with your family? Do you want to be part of a $10 million business or a $50-million-dollar business? If you do, you work backwards from there.
Even if you’re advanced, Matt tells their advanced guys, buy small sites, keep safe, prove that you can get runs on the board. And then you move up the scale. Then you start talking to bigger, bigger people, get into bigger and bigger deals. And all you do is just do it safely.
Do they know the kind of asset they’re sitting on?
The advanced guys, Matt says, probably just don’t realize the asset they’re sitting on or the skill set, the multimillion dollar skill set that they’re setting on, because there’s a lot of need. One of the biggest problems or bottlenecks for big and small PE firms at the moment is finding good operators.
It’s like the perfect marriage, when you think about it. If you don’t have a lot of money, but you’ve got a lot of intellectual assets, you can put your hand up, say, I’m a really good operator, here’s what I’ve done.
“You don’t need the money, you need the sweat. – Matt Raad”
The firm can go, Alright, we’re going to buy three $2 million websites, we’ve got the team, you run it. And that’s basically what you could do if you’re advanced. You don’t need the money, you need the sweat.
Then you get into a multimillion dollar deal. With the connections these guys have, because you’re known as an operator in that space, the word gets around. Someone who’s bought three sites may need someone on their team to help with that.
So Matt sees really good opportunities for beginners, intermediate, and advanced in this current marketplace.
“Just stick to your basics, and you’ll be fine. – James Schramko”
Just stick to your basics, says James, and you’ll be fine. That’s what he’s been doing. Podcasting, building out content, having a great relationship with my audience, growing businesses, just sticking to the bread and butter. And it’s been really rewarding.
If you want to get in touch with Matt, you can go to eBusiness Institute and do their free masterclass. At the end of it, they talk about their program if you’re interested.
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