I have been gone from this blog for a while because I have been busy with other things.  I do want to update you all on what I have been doing.  In the past month I have been working on reinvesting my blog income into more income producing properties.  And no, I am not talking about real estate.

What I have been doing is looking for established websites to purchase, and so far I have purchased several  sites for a few thousand dollars.  These are sites that generate a lot more pageviews than my own blog, and I have been working on monetizing them.  In the process of purchasing these sites and testing various monetizing schemes I learned quite a bit about internet marketing, and the valuation of a website.

I also learned quite a bit about what types of website traffic is valuable, and what demographic is more likely to go to certain sites.  There is quite a bit of science behind this, and in the past month I have been reading and learning.

On the income front, so far I am on track to generating about 7% of my purchase price per month in income.  So this means I will get my principal back in a  little over a year as long as the sites are operating as they are now.  If I increase the income stream I will get my money back faster.  After I get my principal back all the income would be just pure profit because it doesn’t cost me a lot to hold extra websites.  My hosting account can host an unlimited amount of sites, and the cost of renewing a domain is less than $10 a year.

My plan is to reinvest all of my internet generated income for this year back into purchasing more web properties, and eventually I will have enough income to quit my job.  I am actually planning to use some of my money from my company’s sale to buy a site with 2 to 3 million pageviews a month, and see what I can do with it.

To be honest, established websites can be extremely good investments if you know what you are getting into, and you can effectively monetize the traffic.   The general going rate for a website is 6 to 12 times the monthly income, and as long as you know how to maintain the traffic and income, then they are probably the best income producing properties out there.  There is definitely risk involved, and you have to know how to pick the sites that are evergreen.  I may write about this more in detail when I actually make enough to quit my job.

Right now I am happy with my initial experiment because I am collecting several hundred more a month on a very small investment. My parents are always talking about their real estate but their return is only a few hundred a month after taxes even though they invested  20 times of what I did.  If I spent the amount of capital they did on websites then I would be making more than a fulltime income.

Anyway, I will keep you all updated on what happens.  In other news, my hubby finally got his own domain for his top notch gaming blog .  Hopefully he will soon start getting compensated for his excellent writing.

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A long time ago I wrote a post about stock options called Basically I wrote about why most people do not get rich from stock options here in the valley and I really hope that young folks coming out of college read my post.  With that said, I am writing this post today because my company just got acquired by a huge company this week.   This is one of the many mergers and acquisitions in the technology field this week and those of you who know me know which deal it is.   As expected, I am not rich , but I will be getting enough from my shares to afford a decent vacation.

There were a lot of mergers and acquisitions in the past few years because having an IPO is becoming increasingly difficult.   Although the stock market is a lot higher than last year, the truth is that the economy is still awful and is possibly even worse than last year.  If you look at mutual fund flows, you will see that billions of dollars are still being pulled out of equities.  Money is flowing towards gold, bonds, and just plain cash.  Unemployment is actually higher than last year if you face reality and forget about the government swill in the mainstream media.  Right now half a million people are claiming new unemployment benefits every week  while only tens of thousands of  private sector jobs are being created every month.  It is basically like someone is trying to fill the Grand Canyon with a shovel and a bucket of sand. It is not pretty and  I do  feel fortunate to be where I am at right now.

Personally, I think that mergers and acquisitions make a lot of sense right now.  Small independent companies like the one I work for have to work so much harder just to survive, and many small companies are dying out.   I think a lot of small companies actually want to be bought right now because it would make life easier for them.  Also, there is  still a lot of money for the founders if they are acquired.  One of my classmates from college just walked away with millions in the Disney/Playdom deal because he is a founder.  You could say that he is just lucky, but he did found a company that has a product that Disney thought was worth buying, and his company does support many families.     It takes hard work, dedication, and vision to build a company, and I do believe that founders of companies deserve the rewards they get in these deals.

I’m not sure what the future will be like with a big conglomerate, but for now everything should stay the same.  After my last company was partially sold for a very high sum in 2007,  recruiters descended like vultures and a ton of people left.  I really hope that the same thing doesn’t  happen here, but the culture of the valley is that once an exit event happens a lot of people will leave and try to strike it rich in another startup.  I guess my take on that is the same thing I wrote years ago.  If you are not a founder, then don’t expect to get rich.  If you are a founder, don’t count on succeeding because most startups still die out or never reach an exit event.   Anyway, I will still stick to my plan of early retirement, and this deal will hopefully put me a few months ahead of my original goal.

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Lately I have been thinking a lot about.  If we did not have any housing costs, then our monthly expenses would significantly decrease.  This is a very generous monthly budget I have drafted.

Property Taxes: $358
Food: $600
Car Insurance: $190
Gas:$200
Electricity and water: $175
Home insurance: $50
Cellphone + internet: $120
Life insurance: $42
Travel and Entertainment: $300
Home maintenance: $100
Total: $2135

I know that I didn’t include donations, taxes, and health insurance, but I did include a generous estimate of our core expenses.  We actually don’t spend that much in some of the categories above.  So what does this mean?

By my calculations, if we maxed out our 401k and then threw every penny of our earnings  at our mortgage right now we can pay it off in a little over five years.   And in lieu of a sale at the or cash raining from the sky, it may be our only alternative. If we had the mortgage completely paid off, then we would be very close to financial independence because it is not extremely difficult for us to generate $2000 a month through part time work or online ventures.  Even though I am not blogging much as before, I am still making money from my old articles.  If I had more time to develop my websites then it is not inconceivable to generate another $1000 a month.

The hubby is telling me to do what I think is best, and I have been prepaying the mortgage, but not at an extreme level.  We have thrown a few hundred  extra to the principal every month.  Perhaps I should start throwing every penny at it from now on.  Our mortgage rate is only 4.875% and some may say that there are better investments out there now, but I feel that it is tough to find something with a guaranteed return of 4.875% now.  The economy is still at a precarious stage where deflation seems imminent.   We already have a good cash emergency fund that would last about 2 years, and we are still investing in the stock market for the long term in our 401ks.  Basically, there is no reason not to pay off this debt now.

Some people have told me that I am crazy, but I really think that I am just being conservative.  Why would I want to keep debt for decades?

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Today I read an NYT article that basically focused on one young man’s inability to launch a “dream career”, and how his family worried about him.    The article is titled “” and it notes that 23% of young adults aged from 18 to 29 are not searching for a job, and 14% are unemployed.  The story tries to paint a  bleak picture of my generation’s future, but I think the writer does not quite understand what the American Dream is for today’s young adults.

I feel like that the article focused too much on the American Dream being a well paying job that you do for 30 to 40 years.  I do not know anyone my age whose goal in life is to work for someone else  for their entire lives. On the contrary a lot of my friends dream of creating their own ventures, and some have started doing their own thing.  It would have been interesting if the NYT reported on how many of these unemployed young adults are trying to start their own businesses.  With today’s cheap technology it is quite easy for young adults to start a profitable business from home.  One phrase that I have heard a lot and I feel is worth repeating is “you don’t need a job, just a way to make a living”.  I have never heard of any of my friends say that they wanted to “climb the corporate ladder”, but many have said that they want to just run their own business.

Another problem with the NYT article is that it focuses on a young man who is still relying on the bank of mom and dad two years after he graduated from college.  I do know some people like him, and I really think that its the parents’ responsibility to stop letting these kids leech.  The guy featured in the article also turned down a job paying $40,000 a year without any reasonable backup plan. I just don’t see how this one privileged young man’s story indicates that the American Dream is elusive for all of us.  It just didn’t make too much sense because this guy’s struggles are so miniscule compared to many others in our generation who have real responsibilities.

One thing I do believe is true is that there is a lot less financial security for my generation.  Pensions are now extremely rare in private industry, and many young adults are finding that their expensive college degrees are a burden rather than a boon. Additionally, the U.S. government is still spending money like there is no tomorrow, so taxes will definitely go up while I think the current reality just means that we have to work hard and  create our own financial safety net.

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I wrote the “” page almost three years ago and haven’t really updated it. I think now it is a good time to address what I have written and what has happened so far.

This is the old Goals page:

“My goals are quite simple — have at least one child and retire early. However, to do this I would need to save up a quite sizable retirement fund for myself and a fairly large college fund for my child. The pursuit to pass down my genes has a huge financial responsibility attached to it since once I have a child my pay may decrease quite significantly. I have seen many working mothers discriminated against in a silent but egregious manner, but if I get started on that topic I will have to fill up another page. So my short term goal is to save enough money to have a child without having to worry about paycuts or unemployment. I want to have my first child before I am 28, so that leaves me only three more years to save. If my husband and I don’t purchase an overpriced home and continue to rent, it’s possible to reach our goal of $500000 by 6/30/2010.”

So it is almost 6/30/2010, and no, we do not have $500,000. We might have made it if the stock market did not fall off a cliff, but the damage to our portfolios wasn’t extremely severe because we pulled out a good chunk of cash before the September/October 2008 crash to purchase the hubby’s parents’ house in Southern California.  Basically before the huge crash happened we had something like 40% of our portfolio in cash.   Our portfolios did go down, but it wasn’t as ugly as it could have been.

We plan to move there if the hubby gets a job nearby the house, but the recession sort of kept us where we are for the last couple years. The house is a bit too big for the two of us, but we did have a son last year and if we have one more child it would still be a very roomy house. Basically right now the hubby wants to just move one more time to that house and live in it until we retire.   The mortgage on the house is a couple hundred dollars more than our current rent and with the mortgage interest deduction it is less than our rent.  All in all, it was a good purchase and we don’t regret it.   Even if we had to sell it now we still have a good chunk of equity in it since we technically bought it at a low price along with the hubby’s parents’ gift of equity.

Being a working mom is very tough, but to be honest after having a child I really don’t care about paycuts and the possibility of unemployment anymore.  I have discovered that it is not really that hard to make money if I wanted to, and although my current job is pretty great, I am not afraid of losing it because a job is just a job and my life would not be over if I didn’t have a job.  As long as I have my family  and my wits about meI would be okay.

The ultimate goal is still to retire early, and now the hubby is on board with that goal and we have set the date of our financial independence to be our son’s 10th birthday.  We plan to pay off our home by then and have enough investments to generate around $3000 to $4000 per month.  So right now our son is 8 months old, and we have 9 years and 4 months left to achieve that goal.  I will probably update the Goals page in another three years.  Needless to say, a lot of things I didn’t expect to happen happened in the last few years, and I expect the future to be equally surprising.

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