Investment in Property or Build an Online Business?

As someone who has been investing in property for the last 15 years, i always thought it was the best way for passive income – but now know there is a better way – and that’s investing and building an online business.
Yes, property investing is profitable, but it is capital intensive as you need to deposit large sums upfront. It requires management of a whole bunch of people – solicitors, accountants, conveyancers, lenders, suppliers, etc. That’s not to mention annoying tenants, unreliable builders/contractors, renovation costs and constant changes to the tax laws. In addition, the property market is cyclical and so its not straight-forward to scale and grow.

An online business however – once set up correctly, requires significantly less initial investment, less people, less of your time, its self-running, and can be scaled with ease.

Consider this concept – IGV (Income Generating Value). This is a simple measure that calculates how much income you earn for the hours you worked. The higher the better because it means you are earning more income for less hours worked. The way it is calculated is your total income for the week / total hours you worked in a week

Now for property investment – there is a low IGV because of high number of hours spent working, negotiating, calling, viewings, identifying deals and difficulty scaling. With an online biz – there is a much higher IGV…because of little time spent actually working and ease of scaling and growing the business using automated technologies available on the internet. Check out this simple animation:

Essentially if you wish to free up your time and utilize the scale and reach of the internet, then an online business is the way to go. Author Tim Ferriss mentions in his excellent book – the ‘4 hr work week‘, how we should be outsourcing tasks and leverage technologies so we are doing less and building assets that earn us more income. This is an excellent concept and one that an online business addresses perfectly.

If you are keen to build an online business and create another source of passive income, then click here to receive the same education that I got 🙂