On Using Digital Assets to Build Wealth

2 min read

You’re probably familiar with the following asset classes:

  • Stocks
  • Bonds
  • Real Estate
  • Gold
  • Commodities
  • Cash

Depending on your risk tolerance and your desired investment returns, you likely have a portfolio that contains some mix of these asset classes.

However, there’s a new asset class that has only come into existence in the last 20 years: digital assets. These are assets that exist digitally on the internet and include things like:

  • Websites
  • YouTube Channels
  • Apps
  • Shopify Stores

What’s unique about these assets is that you can build them from scratch. And once they’re built, they can generate income for you just like bonds, dividend-paying stocks, and real estate.

My favorite form of digital assets are profitable websites. These are websites that contain articles about specific topics (e.g. Four Pillar Freedom is all about personal finance) and earn income through display ads, affiliate links, and digital products.

I personally started dabbling in profitable websites in late 2016, when I made the decision to start this site. I initially started the site because I was passionate about personal finance and wanted to share my thoughts with an audience online.

Over time, I discovered that I could earn income from the articles I wrote by placing ads, affiliate links, and digital products on my site.

Last summer I reached the point where my income from websites surpassed my total monthly expenses, so I made the decision to quit my day job as a data scientist so I could work on my sites full-time.

My monthly online income since January 2017:

While I’ve always known that assets were the key to building wealth, up until a few years ago I assumed I had to save up money to buy assets.

My mindset completely changed when I realized I could build assets from scratch.

I no longer had to wait for paychecks to hit my bank account from my day job to purchase assets. Instead, I could set up a website, churn out articles on the site, and monetize those articles.

Best of all, by writing SEO-optimized articles (articles that rank on the front page of Google) I could earn recurring traffic and income over and over again.

The Difference Between Side Hustles and Assets

One lesson I’ve learned with websites is that they truly are assets. They are living, breathing things that work around the clock to earn money for me even when I’m not working on them.

This is in direct contrast to side hustles such as:

  • Driving for Uber
  • Delivering food via DoorDash
  • Walking dogs via Rover
  • Being a freelance writer
  • Being a freelance social media marketer
  • Taking internet surveys

Each of these gigs pay you money in exchange for your time. And while they can be nice ways to earn some extra money fast, they offer no potential for passive income or exponential income growth over time.

I’ve seen firsthand how I can take weeks off from working on one of my sites and still earn income from the existing ads, affiliate links, and digital products I have on the site.

Conversely, if I relied on dog walking for income, my cash flow would dry up the second that I stopped working.

On Using Websites to Build Wealth

Because websites are assets that produce cash flow for me, I’ve realized that I can use them to build wealth.

Currently I own five different sites that all earn income in a variety of ways including:

  • Display ads
  • Affiliate links for services & products
  • My own digital products

The more time I spend building up my portfolio of sites, the higher my income (and net worth) grows.

I still like the idea of holding a portfolio of traditional assets like stocks and REITs, but almost all of my time and attention goes towards growing my portfolio of digital assets, which I have much more control over.

As my income grows from my digital portfolio, I use the profits to acquire both traditional and digital assets. This causes my income to grow even more, which allows me to acquire more assets, and a beautiful flywheel of asset acquisition is created.

As I build and buy more assets, my income and net worth will both continue to grow over time.

Learn How to Build Your Own Profitable Websites

If you’re interested in learning how to build your own profitable websites, I recommend joining the Income Community, a private community I created that shares how to start and grow profitable websites from scratch.

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Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.