A few thoughts about this….
I was chatting to a colleague of mine at work today who has mortgages on three houses and owns two further houses. At the moment because of the decline in house prices, he has negative equity on a couple of the houses and obviously because of the increase in inflation, his mortgage rates are going up.
In the long run, it is true, this guy will make a good deal of money (providing he can make it through the bad times and possible recession). It’s one way to make money, but it’s a slow process and not really fitting to what I want to do, which is make enough money to have the freedom to do what I want before I go bald (due to my genes I’m guessing I have another 15 years yet!). Given my goal, house buying isn’t going to do it for me.
So instead, I’m going to buy web sites. And I almost bought one today for the princely sum of $30k. I did my market research and checked out the visitor and income stats for the site – 25,000 UV and $2,000 average income a month. To my mind that sounds like a pretty good investment – if the web site continues on its current trend, in 15 months I will start to make a profit.
But then you start to consider that this web site is also a Page Rank 4 site, and therefore will have a positive impact on my other sites (as I will obviously backlink to them). The monetary value of this is unknown and maybe arbitrary but it’s certainly a factor.
On top of this, I have a background of SEO, and I identified a number of keywords that I could boost the site up Google with. Therefore I predict I could almost double the traffic and hopefully increase revenue inline with that.
So, I could have a web site that is generating me passive income of $2000+ / month and in 3 years (at this rate) It is possible for me to make $38,000 profit (running costs are negligible as I am a partner in a web hosting company). I’ll plug that back into a couple of further endeavours of say $20,000 each and even if only one performs, I’m now earning approx $4,000 passive income per month.
Web site investments are notoriously high risk, however, and I don’t envisage a 100% success rate on all web sites that I take over. But it’s far more exctiting than houses, and doing this for 10 years will get me much further than taking the property route (especially given that I don’t have much in the way of capital).
Watch this space – I’ll keep this lbog for 10 years and we’ll see if my “on the side” business model works. I quite fancy my chances 
As an update: Spittinflicks.com is on the first page at google.com for Film Forum and about 120th for the keywords Film Reviews. On top of this a new house reviewer has joined the team and we are up to 80 top quality house reviews. All this in less than five months – I am looking forward to the next year.
