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And my Super Secret Website is…

At the end of November, I bought a PF website with some of my earnings from RFI. I was hoping to break even within 6 months. Now that I have, drumroll please… I am happy to present my new site, The Savvy Scot 🙂

 

 

The Savvy Scot

The Savvy Scot

 

If you are regular readers of that blog, you already knew, as I have made no efforts to hide my identity behind an alias, however, I didn’t want to share the news until the operation was profitable. Call it superstition, whatever.

 

Buying a blog vs starting a blog

 

The Savvy Scot is a UK blog, which is two years old. In the deal, I got

– An older domain. That is something Google likes, and advertisers do too.

– A PR3. When I bought the site at the end of November, Google hadn’t updated its PageRank in 9 months. It did 10 days later, in December. As advertisers were still stuck on PR as a way to determine a site’s worth, and I was getting desperate of seeing MMYW stuck with a PR0, I bought my way in.

– Established social accounts. There are about 1,500 followers on FB and 5,500 on Twitter. Building that takes time and effort.

– 300 odd posts. You can get poorly written ghost posts on Fiverr for $5. That would be a $1,500 value. Although those posts are better written, personal, already uploaded with a picture, tags, etc. so I think it is worth more.

– A list of current and past advertisers. With an older blog, getting a list of contacts is awesome. Not only can I leverage those contacts for RFI and MMYW, I can also get recurring business just by renewing existing deals.

– A money generating website. It took 6 months for MMYW to break the $1,000/month income level. This site was already generating more than this every month.

– A UK blog. There are very few personal finance blogs in the UK, mostly because the main one, Money Saving Expert, is overshadowing everyone. A few good ones include The Money Principle, Miss Thrifty or Money Bulldog, but they are few compared to the US. I am hopping to diversify my affiliate sales with UK products (that I use, remember I still have a property in the UK and do most of my banking over there) and to talk about a few UK related topics from my years over there, with post like how workers can score 32% off a bicycle to cycle to work.

 

It is quite interesting to compare the progress on both Savvy Scot and MMYW, whatever the purchase price was, I broke even after 10 weeks, and now both sites are bringing in a similar amount. In January, MMYW had made around $2,500 (net, when you take out 6 months of VA and staff writing costs) minus my blood and sweat for 7 months, whereas Savvy Scot has brought around $300 after breaking even, for only two months of active promotion, writing a few posts, and pitching it to my ad contacts.

Both sites benefited from my previous RFI experience and contacts. But is the $2,000 difference to work like crazy for 6 months to start a site worth it so you don’t have to buy a site? That is before putting a value to the extra content, there are 200 more posts on Savvy Scot than MMYW, or the domain age.

It is worth it if you want to have full control of your site and content. I was a Savvy Scot reader before buying the site so I know it was “clean”, but I hadn’t read all 300 posts, whereas I know exactly what is on MMYW.

It is worth it if you don’t want to spend time looking for a bargain. I got a cheap price because I knew the blogger, I trusted him when he said he was too busy to take care of the site (it could have been an excuse for “I am not making any money and my pageviews are at all time low”), and I didn’t have to spend hours reviewing the site to make sure it was a quality one. On Flippa and other web selling marketplaces, you find a ton of websites that were created with the sole purpose of being sold and flipped. I bought a work of love. Those low quality websites have fake links from link farms, sometimes a fake pagerank, and you never know what other little surprise is there. It takes days, weeks even, to fin the needle in the haystack that is a genuine good deal.

If you are looking to buy a website, a good place to start is asking around if anyone wants to sell. Many bloggers don’t make it past one year and are happy to pass on their baby for a reasonable fee.

It takes time too. I almost bought a website in February last year, but once I made my offer it got penalized by Google and lost its pagerank. I wasn’t experienced enough to know it was not that big a deal, and most importantly how to restore it, so I withdrew my offer.

There are also bloggers who think their site is worth 10 times market rate, and won’t make it worth your while.

So if you want to save time in that department, start your own website.

 

As an investment, buying The Savvy Scot has been great. Do you have many investments that break even after 10 weeks? I don’t. Based on RFI’s history, I am confident I can generate $1,000 a month with it for the months to come. Comparing with the 1% rule of rental properties, a house renting for $1,000 a month should be worth at most $100,000. If the house cost you $50,000, you got a real bargain. Based on my breaking even in less than 3 months, you can make a wild guess and be sure I didn’t pay $50,000 for that website.

 

I talked about what I think websites are worth when I announced my purchase of Savvy Scot, and explained they generally go for 24 to 36 months of generated income at most. Equivalent to your $100,000 house renting for $2,777 a month. Not bad, eh? Sure, a blog requires work every single week while your property could almost be a source of passive income, but you don’t pay property taxes on a website, or maintenance, repairs, the heater never breaks, the roof never leaks…

 

Now that the secret is out, on to the shameless plugs :).

 

Subscribe to Savvy Scot’s RSS feed and never miss another post, like Savvy Scot on Facebook and follow Savvy Scot on Twitter! Phew, that’s it. See you!

 

Note: Now that the website is profitable, 10% of its income will go to my Guatemalan village’s students and education projects.

 

This post was featured on the Financial Carnival for Young Adults, Finance with Reason, Aspiring Blogger, thank you!

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Lovely comments

  5. So awesome to see you expand your blog empire : ) My second website I’m (very) slowly working on is a health care website, so a pretty different niche. I would be interested in another finance-related website if I found the right one. I think you’re right about 24-36 months, though most businesses sell for more than that. I realize there is more risk in blogging, though, so I don’t see 24 months as unreasonable. I got an offer for about 20 months worth of income for my site in December. That definitely has motivated me to keep working on my site and improving it’s potential value to future investors.

      • I think I’d have trouble selling as well. I would want to have at least one or two other profitable websites if I was ever to unload one. The cash flow is too important right now. Then again, if I really built up a site and had solid cash flows and got an offer I couldn’t refuse…I’d probably unload it.

  6. I don’t read it very often, but I had noticed the increase in posts and tweets from there! Congratulations. I can’t believe you were able to break even so quickly, that’s a fantastic return!
    Excellent empire building work. I am jealous, but haven’t put even a fraction of the time in that you have. As a side note, that phrase is stupid, everything is a fraction, unless it’s 0!
    Anne @ Unique Gifter recently posted…The Four Principles of a Debt-Free LifeMy Profile

    • Thanks Daisy. You’re right, people overvalue, but offering 24 months of income for a website is considered high and is still a 50% return, if websites were offering a 5% return you would have to offer 20 years of income and still be better off than a bank account…

  16. Good for you Pauline. I’ve chatted many times to the previous owner of Savvy Scot as I am a Brit. I was pretty sure this was your new blog as every time I read a post it had your name somewhere linked to it. I’m happy for you and I think this is perfect for you since you do most of your business from the UK. Well done mate.

  17. I was a previous reader of the Savvy Scot, but have been reading more since you took it over. I’m not sure I’d sell my blog after all the time and energy I’ve put in, but I guess if the price was right I’d consider.

    • Me too, but it would have to be very right. Not that I think I do wonders but let’s say your blog makes $50 per month. At what the market gives you, you’d get $500 to $1,000 stretching it. Put the $1,000 in a bank account and if you are lucky you will receive $50 per YEAR! To receive the $600 a year you would need to sell for $12,000, which no one will give you.

  19. That’s great news for you. I have read that blog off and on in the past and it has really good content already. If I ever did another site, I think I’d look to buy an established one. It’s so hard building up followers from the ground up. I can’t imagine I’d ever sell Eyes on the Dollar, but if I did, I would feel so much better knowing it went to someone who would continue it in a good way and not turn it into a spam factory.
    Kim@Eyesonthedollar recently posted…Ways to Save Money on SkiingMy Profile

  21. Looks like you acquired some nice online real estate there 🙂 I’ve been to The Savvy Scot a few times before I didn’t know it was so well established with such a great income stream already. Congrats! Just like properties in the physical world, building up a portfolio of online assets can pay off very well in the long run 🙂
    Liquid recently posted…Playing the LotteryMy Profile

    • It ranks number 10 on Sterling Effort which has a ranking like WiseBread http://www.sterlingeffort.com/uk-personal-finance-blogs I think it was #13 when I bought, now I am trying to outrank the Money Principle :). I guess because the UK market is smaller it makes it attractive for ads, which I will not complain about! Not sure about the long run though, the web evolves very quickly compared to say real estate but since I made the money back I am fine with whatever outcome now.

  23. Yea I guessed right! Like you say it was pretty obvious for anyone reading the site regularly. I just thought at first that you were some kind of ninja guest post writer who was posting stuff all over the web until I saw your other post about the super secret website, then it all made sense. Congrats and well done for making the money back already!
    theFIREstarter recently posted…Calculating your Savings Rate: Debunking the MythsMy Profile

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