Are the newly rich more frugal?

[Theo]

Story: guy contacts me with regards to a domain name - which is an active web site - and we talk about offers etc. I tell him my domains start at $1k and I'd welcome his offer.

During the conversation he mentions one of his domains. I do some light research and discover his company was acquired in January for $20 million.

So he comes back with a sad story how he and his buddies scrounged up one thousand bucks to buy my domain.

Now, if he hadn't mentioned the "scrounged" part I'd be willing to believe him. He's buying a pattern in domains, similar to mine. But after this obvious lie and his recently acquired fortune, I have no intention to sell the name; I might as well put his pic up with an "Ebeneezer Scrooge" sign under it

 

[Deleted member 70408]

I believe one reason why the domain biz has not been fully embraced by many outside investment firms is because there is no pricing stability. In a conversation I had with an I Banker who was unfamiliar with the domain biz, he mentioned that it seems like it has one important thing - Supply/Demand. However, he said that it would need something like pricing stability (ie being able to find actual/legit sales to compare other names to) in order to really bring in outside investments - much more than we see now. Long story short, this is one reason for it. If Acroplex knew he could get $50,000 for this name based on the buyer, the price would probably be $50,000 - or maybe even more to squeeze as much out of him as possible. If he thought he could only get $2,000, that might be the price. There is nothing wrong with this, but it's just an observation based on a conversation I had today.

 

[Theo]

But still, you don't address my question: are the newly rich still frugal, despite their financial cushion?

Obviously, before I quote a price to an end-user I perform due dilligence, I research their financial and social status. It seems that many individuals or corporations that have the ability to pay more, bring up ludicrous claims: e.g. domains are $8 at GoDaddy. When I hear that argument I merrily respond, "then go to GoDaddy"

 

[Provider]

I think the price of the names always will be very subjective. You can find a house in the same area and compare, but domains are not comparable. Acro, is raising a very interesting point here, and I think this is something that we don't really discuss on the forum too much. The strategy buy low - sell high is always working everywhere, but what is considered to be immoral in our industry. Many people realize that buying and selling on the domain name forums only is not going to bring real returns, at some point we all have to
go and aproach a seller or a buyer directly. How do we behave in that case?
Is it ok to lie? The answer is definetely no when you sell domain to somebody, especially when you have to state traffic stats and revenue.
But is it ok to lie when you buy the name? The lie is a lie, and it is bad, on the other hand if I aproach a potential seller I want to get the lowest price as possible- interesting delemma indeed

Answering directly to Acropex's question: no I don't think the problem is with rich people, I think it is a strategy, and it doesn;t matter if you have money or not if the strategy is working you never change it

 

[Theo]

To simplify things, the domain in question is a brand; the traffic is irrelevant. The guy wanted it because he is buying "at GoDaddy" domains with say blue+widgets and my domain was red+widgets. In other words, he attempted from the get-go to get reg fee for it. I felt sorry for him at my last phone conversation because clearly he sounded ticked off that I would not sell at one thousand bucks (that he and his buddies came up with by ...scrounging.)

On the other hand, a corporation or an individual that has delved into the particulars of trading, will know that there is potential and room to negotiate a purchase. This person faked his ways by appearing to "wonder" how the payment will be made, etc etc. I had to cut him short by stating that we need to agree on the price first!

 

[Duckinla]

No, the new rich are not more frugal. The old rich drive Ford explorers, the new rich drive Range Rovers. Having run high end retail throughout the country, I can tell you that people in new rich states (California, Florida, Vegas, Arizona) are much more free with their money than people in the older money states such as mid to upper atlantic region.

 

[VisualDigits]

Widgets are gonna be huge soon so don't let it go cheap.

P.S. PM me the name, I might be interested if it's that good.

 

[Gerry]

Funny you should ask.

I talked with an investment banker recently whom I met for the first time. We were talking about the markets and the particular area that I am in where there is old money (cirgarette, trucking, and textiles) and new money (start up companies and the like).

He himself mentioned that the new money is hard to part because they are so afraid they are going to lose it. They end up making bad decision and choices (ala the real estate flipping and investments), buying a beach or second vacation home that is so over priced to start, expensive cars and toys. And some do end up on the losing end. Now they are scared to invest in anything.

Can't categorize them all like this but your title caught my attention seeing that this was a recent conversation.

Speaking of flipping, I know there was a tremendous amount of this going on in Florida. Will Orlando hold up well seeing that it is so popular?

 

[GAMEFINEST]

Theyre just cheap buyers

 

[groundctrl]

He himself mentioned that the new money is hard to part because they are so afraid they are going to lose it. They end up making bad decision and choices (ala the real estate flipping and investments), buying a beach or second vacation home that is so over priced to start, expensive cars and toys. And some do end up on the losing end. Now they are scared to invest in anything.

honestly, this is fascinating. as someone who is young who has come into what is a fair bit of money, i find myself really compelled to avoid this trap, but not sure how to do it. i mean, i'm not really buying expensive anything, and i'm on a domaining forum, but still.

the hardest part about doing business with domains is really assessing them. if wasn't so afraid of overpaying for stuff i would have dived in much more quickly. now, i'm being far more cautious.

 

[Theo]

Today someone offered me $150 for a domain that I've turned down offers in excess of $1k, with the note: I just wanted to take it off your hands as it doesn't get much traffic.

I don't understand what these people think in the first place; does my WHOIS info read "Please sucker me up"?

 

[GAMEFINEST]

Today someone offered me $150 for a domain that I've turned down offers in excess of $1k, with the note: I just wanted to take it off your hands as it doesn't get much traffic.

I don't understand what these people think in the first place; does my WHOIS info read "Please sucker me up"?

sorry about that...

 

[Deleted member 78222]

A lot of really wealthy people have got there by hook or by crook.
Cant blame a guy for trying his luck, just educate him!

 

[wolfis.com]

But still, you don't address my question: are the newly rich still frugal, despite their financial cushion?

Theo , i will let you know after i have this cushion - o.k.?

but all joking aside as i get many silly offer even so my website even says they are not for sale - i have to say that in most cases it is not ignorance it is simply an attempt to get a domain name as cheap as possible - at any cost , which includes but is not limited to lying , playing stupit , being just plane nasty ,ect ..

 

[Sarcle]

are the newly rich still frugal, despite their financial cushion?

Does it matter if they are newly rich or not? The reason most are rich are because they make good deals with suckers and turn and pull a profit. They don't get rich or stay rich just throwing money everywhere.

 

[Theo]

If I had $20 million and needed a few domains, I'd spend decent cash. I would not lie to the seller saying that I can barely afford $333 x 3 for an active domain. It's funny, but the more polite I was on the phone, the more pissed he seemed to get seeing how I would not sell at $1k.

 

[Sarcle]

If I had $20 million and needed a few domains, I'd spend decent cash. I would not lie to the seller saying that I can barely afford $333 x 3 for an active domain. It's funny, but the more polite I was on the phone, the more pissed he seemed to get seeing how I would not sell at $1k.

Yeah, but he messed up. Showed his hand to an experienced domainer. Usually this isn't the case. Sounds like new money with no experience, just stumbling around and got caught in the process. Give him a spanking and expose him for being a lying ass. :lol:

 

[Thor King]

This is an interesting topic. Old Money VS New Money. New money flashes their gains not understanding the responsibility of a dollar. Old money is not in a hurry and will hold out UNLESS they clearly desire the Domain name.

What's all this about Widgets Domain names? I'm out of the loop on these guys.

Thanks,

Thor

 

[Theo]

In this case it was not Old vs New money. The guy was already in the business of New money, or at least, the Internet industry. But having hit a fortune suddenly became a problem and not a solution: he did not see that the world does not revolve around his fortune.

 

[Fearless]

Next time I'll offer $1,500.00.