Reinvest vs. Personal Money

[Generalissimo]

This applies to people who make enough to live off from their websites only.

How much do you reinvest, and how much do you pay yourself? I reinvest at least 90%.

[Chris]

You've got it pretty easy, you live with your parents and have very little bills.

I don't think any adult is going to be able to afford to reinvest 90% of profits into the business.

Plus, there aren't much investment opportunities for larger sums of money. Advertising only makes sense if you have a postive ROI, and for many sites or advertising mediums that is not going to happen. Buying a new site only makes sense if

1. You can't easily make a similar yourself from scratch.
2. You can make back what you paid for the site.

Most sites being sold are either so small that there is no reason to buy them, or turnkey sites for saturated markets that are both easy to replicate and hard to profit with. Or, I guess the third type would be sites that are overpriced.

[r2d2]

You could invest it in non-web related investments, such as shares and real estate (which I seem to remember you already do Chris?) if there arent any suitable web opportunities.

You didnt answer the question in the end, so how much do you invest Chris?

Any body here read 'The Richest Man in Babylon'? Do you 'pay yourself first' and spend whats left, or do you spend whats needed and invest anything thats left?

Sure Sean, is lucky at the moment that he doesnt have many expenses, so I think its good to invest while you can.

I am paying myself 10% at the moment, but also saving for a deposit for a house.

I reinvest all I make from the web, but have a salary to pay my personal expenses.

[Chris]

Oh yes, I invest in non-website things. Stocks, Savings, Real Estate.

As for how much? I don't keep track of that. I don't have a set goal of like "Save 20%" or anything. I have enough liquid assets (stocks, savings) to live off of at my current lifestyle for 2 years, then I have the real estate which is more long term.

Generally I get a cash windfall at the beginning of the year thanks to my december sales, and I do different things with it. 2 years ago I bought alot of stocks, last year I bought the real estate, this year I'm putting an addition on my house.

The rest of the year things just get moved into savings accounts, with some stock purchases if I want something, and then at the beginning of the year after I do my taxes I make big investment decisions.

[James]

How 'lavish' is your current lifestyle, if that's not too personal, Chris?

[AndyH]

Have to agree with Chris when he said you have it pretty easy when you live with your parents.

As for reinvestment, in the past I have taken home 90% as a salary. This year I have not taken home any. I can pretty much live off the interest I earn.

That being said, just in this month I have decided to really start putting money back in, leasing more servers, advertising, graphical work, flash work. I am going to be bugeting 30% of last months earnings into the above. It would be more, but I am aiming at buying my own house outright by November.

[James]

I can pretty much live off the interest I earn.
Wow. How many sites is this off of?

[AndyH]

Wow. How many sites is this off of?
I currently have ... about 8 with 2 in development right now.

When I said live off the interest, I mean pay my bills, it is nowhere near enough to buy investment properties or anything like that. I can get by living in a $295/wk apartment, that's all.

[Chris]

lavish is subjective.

[Westech]

I work a full time job and use my salary from that to pay the bills buy things, etc. I "reinvest" 100% of what I earn on the web back into my business.

I put "reinvest" in quotes, because I don't spend much of my earnings and they keep building up in my business account. I have a decent and growing amount saved up, but not really enough to make it feasable to invest in anything like stock or real estate.

[chromate]

I reinvest about erm, let me seeee, 0% :) Though, some of my income goes straight into a high interest savings account. The real reason why I haven't re-invested is that the right oportunity hasn't come along yet. I'm constantly looking though! If I start a ecommerce site for instance, then a large proportion will be re-invested in stock etc to start with. But that just hasn't happened yet.