I have some news for you today!
After buying Rockstar Finance in December 2017, I just recently sold it.
If you’re a blogger or deep into personal finance, you likely know what Rockstar Finance is.
If you’re simply kinda interested in personal finance, read only a few blogs, and are new to ESI Money, you might not.
No problem. Just read Why I Bought Rockstar Finance first for background, then come back here and read this. 😉
This post will give details behind why I sold the site, the financial results, and what I plan to do next.
Rockstar Finance Plans Achieved
When I purchased Rockstar Finance 16 months ago, I had plans for it (of course).
I thought it would take me three years or so to reach those goals.
Turns out, I was able to accomplish what I wanted in just over a year.
Yep. Things went much better than I anticipated.
My efforts came together quickly and the site was able to be monetized much faster than expected. From a financial perspective, it was great.
But since I achieved what I wanted so quickly and I’m sort of a “looking for the next mountain once I reach the top of the current one” kind of guy, reaching my goals left me at a crossroads. Did I want to push forward (with new, higher goals) or did I want to look for the next challenge?
Other Circumstances Worth Considering
The fact that I reached my goals was one (big) part of the equation, but there were other things to consider too.
Here are the main issues that weighed in my decision:
1. Alternative uses for the money.
I have been considering buying a local business for my son to run/be employed by. I could always borrow or use other cash, but my guess is that I might need more than I have (I haven’t found anything yet, so I don’t know for sure).
Separately I found a real estate investor who needs funds to purchase properties. He’s paying 10%, so I took some of my cash and invested with him, but I could potentially do more here as well.
2. Time requirements.
Once I bought Rockstar Finance I was running two large sites (plus a smaller one). The time requirements associated with any single one of them wasn’t a problem. But the cumulative time required to run all three started to become more than I wanted to commit. I am retired after all! 😉
Though I had outsourced much of the Rockstar operations and it only required two hours a day of my time, that was two hours that was not really flexible (at least as flexible as I wanted it to be). In addition to the time I wanted/needed to spend on ESI Money, the total commitment was starting to cramp my retirement “freedom lifestyle”.
Of course, I could have sold either one (or both) of my other sites but since those are personal blogs tied to me as an author specifically, that would have been hard to do (both from a business and personal angle).
3. Time to take it to the next level.
I had enough ideas to keep Rockstar Finance growing for many, many years. But any new initiative would require even more time — not only to develop and launch but to run/maintain.
Did I want to make additional time commitments when the current requirements were more than I wanted?
By the way, this is probably a good time to mention that I considered hiring a full-time manager of the site at $30k or so a year, letting him/her run it completely, and simply making the site passive for myself. But in the end I knew I would still be involved and if nothing else the site would be on my mind often, taking time/mental energy in a different way.
No one would love and care for the site like I would, so in the end I dismissed this idea.
4. The personal fulfillment.
On the plus side, running Rockstar Finance was very personally fulfilling for me — especially the VIB program we developed.
I was part of an effort that helped several bloggers grow from virtually nothing to developing sustainable side businesses.
This was thrilling for me. In fact, I got more pleasure out of seeing others reach their goals than I did reaching mine.
I loved it. And I wasn’t sure I wanted to leave these bloggers who are now dear friends.
5. My daughter’s employment.
As many of you know, my daughter works for Rockstar Finance. At one point, it was her only job.
Sure, I had told her that I could sell at any point, but still it was something to consider.
However she quickly picked up work for several other sites (including ESI Money), so within a few months in she didn’t rely on Rockstar that much.
Plus I told her I’d pay her for several months if I sold and she wasn’t needed, so she’d be covered either way.
Introduction to a Broker
While all these issues were rattling around in my mind, I did Millionaire Interview 113 with Marc from Vital Dollar.
In the interview he shared how he had created, bought, and sold websites. There was some chatting about his background in the comments, and Marc responded with this:
Most of my sales have been private, but the last site that I sold (August of 2018) was through Quiet Light Brokerage. That’s the only successful sale I’ve done with a broker. My wife and I listed the Amazon FBA business with a different broker, but they didn’t get it sold because they were asking too high of a price. We wound up selling that on our own after the exclusivity period with the broker ended.
I had a great experience with Quiet Light and would definitely recommend them. I think most of the deals they do are 6 or 7 figures. Mine was at the low end ($216,000). I could give you the contact info of the specific broker that I worked with if you’d like. If so, reach out to me through my contact page.
Since I was in the stage where I might want to sell (wasn’t sure one way or the other), I contacted Marc and got a reference for a broker at Quiet Light (QL). It was Brad Wayland (info on him is here — if you get in touch with him, ask for the “ESI discount” — LOL!)
A few days later I contacted Brad and we chatted a bit on the phone.
He was a great guy. I felt he was honest and knowledgeable and if anyone could help me sell the site at a good valuation, it was him.
So at this point my options were:
- Sell the site using a broker — The positives of using a broker were 1) they had a large network of potential buyers, 2) they would likely make the process easy for me, and 3) they would probably get me the highest price. The negative was they charged a fee — 10% of the sale or $25k minimum.
- Sell the site on my own — I would save the fee this way, but I’d probably get a lower price. Plus it would be a TON of work. And I might not even know any buyers.
- Keep the site — It still had lots of room to grow and had a bright future, but it did require time. And to get to the next level it would require even more time.
After weighing the options I decided to put Rockstar Finance up for sale and see what happened. If it went well, I was willing to let it go for a good price and to get my time back.
If it didn’t sell, I would invest a bit more time to make it worth even more, then try again.
There was little risk in testing the waters.
The Sales Process
As you might imagine, the first thing I had to do was help QL develop a packet of materials.
The two main pieces were:
- Financials — What the site had earned over the past 12 months. I also did a forecast of what I thought it would earn in 2019.
- Site Overview — QL gave me a list of 50 or so detailed questions to answer so sellers could get extra insights into the site.
Once we had these, we had to decide on a price.
Most sites are sold at a multiple of 12-month profits that are generally in the “3” range (i.e. if a site has produced $50k in profit the past 12 months it would sell for about $150k).
For Rockstar, it was the absolute worst time to sell as my forecasts showed profits going up over the next several months.
So we had a choice: price it higher than “3” knowing what was coming but risking looking too expensive or wait until I realized those profits and then sell at a 3 or a bit higher.
In the end, we decided to test the waters and proceeded with a 4 multiple to see what happened.
BTW, when I bought the site, the multiple I paid was astronomical because there weren’t many profits. But I saw the potential and knew there was money to be made.
The site went live for sale on Wednesday, March 6. Over the next few days, I did several phone calls with potential buyers and my broker.
Then a week into it, lightning struck.
Up to this point, most of the potential buyers were simply business people looking to buy a business. They didn’t know much about Rockstar Finance — most didn’t know it at all. They simply looked at the numbers and tried to determine if it was a good investment.
Kat was different.
She was familiar with the site and the Rockstar Finance community. She was personally interested in personal finance. She was going to FinCon this year. She had even started her own blog a few months earlier.
Plus she had a ton of great traits — she is smart, energetic, visionary, and has a love for the site. She was a perfect buyer.
And thankfully, she thought so too.
I talked to her on Wednesday, had an offer either later that day or the next, and we signed a letter of intent the next day.
We then started due diligence where I answered her questions with access to the site, screen shots, and the like so she could validate the information I provided during the sales process.
Then within a week we had signed the asset purchase agreement. After that I transferred everything over to her and now I’m in the process of training her on how the site runs.
Once that’s over, she’s off to the races. I built upon the foundation that J Money laid and she’ll build upon the foundation I laid. I’m excited to see what she’ll do in the years to come.
The Money
This is probably the part you all are most interested in. 😉
It’s also the part where I need to be a bit vague to protect contractual agreements as well as other people’s privacy. If my privacy was the only concern, I’d detail everything, but I’m pretty guarded when it comes to what I’ve said I’d do and others’ privacy.
But I can give you a pretty good idea of how this went as an investment:
- In Why I Bought Rockstar Finance I agreed with J Money to say that I bought the site from him in the “low six figures”.
- You already know that I got a 4x multiple on the site (which in a couple years will probably be a 2 multiple).
- I had costs associated with the sale — the broker was the main one. I also will owe a good amount of capital gains taxes.
- All this said, in the end, I sold the site (after broker costs) for roughly twice what I bought it for. In addition, along the way I had over $100k in profits from Rockstar Finance alone. Even more, I had roughly $15k in extra profits on ESI Money last year as a result of relationships/efforts made through Rockstar Finance.
So in the end, I made about 200% on my money (plus got my initial investment back) in a bit over a year. Obviously this is hard to replicate many times over, but it would be nice. 😉
My Net Worth
These results have also had a solid net worth benefit for me.
Rockstar Finance was on my books for much less than it was worth. In 2018 Financial Year in Review and 2019 Forecast I commented:
I am depreciating my investment in Rockstar Finance as it relates to my net worth. This is simply a paper transaction that lowers the value of an asset. I plan to fully depreciate it just in case it implodes. LOL! In reality it’s probably worth twice what I paid for it at this point.
Haha! That last sentence sounds like a prophecy come true at this point.
I did this because I like having a margin of safety as I estimate the value of my assets.
But now that it’s sold, the site asset is out of my numbers altogether. But it’s replaced by cash, which I don’t discount/depreciate. Ha!
This now brings my net worth solidly over $4 million. As long as the market holds, I should stay at this level indefinitely. This puts my net worth at about $800k higher than it was when I retired less than three years ago.
Other Financial Impacts
In addition to the net worth changes, this transaction has had a couple other implications for my finances.
First, with the sale of the site I now have earned just under $1 million blogging since I started in 2005. Not bad for a side hustle, huh? Who would have thought that when I started all those years ago?
Second, the income projections I shared in 2018 Financial Year in Review and 2019 Forecast will now be much different. I had estimated my income at $180k, but now it will be closer to $120k. Here are the rough estimates:
- Websites (includes some income from Rockstar Finance this year): $50,000
- Rental Income: $40,000
- Interest Income: $11,000
- Dividend Income (taxable): $10,000
- Wife’s Job: $7,000
Total: $118k
How will I ever be able to live on just that? Ha!
What’s Next?
What’s next for Rockstar Finance is now up to Kat. I’ll let her tell her side of the story as well as hint at what could be coming up.
As for me, I have a few things I’m planning:
- Spending even more time at the gym. I’m already at the gym for an hour (three hours if you add in walking over, getting ready, stretching after working out, showering, and taking the long way home so I get 10k steps in before 10 am), but I’d like to add some time to that. Namely, I want to add 20 minutes of cardio (probably swimming) to weight days so I have cardio every day. I also want to spend more relaxing time (hot tub, sauna) there, probably reading while I do.
- More travel. I’m headed to FinCon in DC this September, but I also want to add in 1) a few driving trips around Colorado this summer and 2) a week to 10-day vacation in Destin, FL (checking it out as a potential long-term winter getaway — anyone with Florida experience I’d love your thoughts on gulf-side beach towns) in October.
- Write more. Rockstar Finance was less about writing myself and more about recognizing great writing in others. And while I kept writing at ESI Money, I felt that time constraints limited both the quality and quantity of what I wanted to do here. So I’ll probably begin work on an e-book or course sometime in 2019. I have some ideas…so stay tuned.
Finally, one other thing I plan on doing is remaining a fan of Rockstar Finance. I really love that site and wish it and Kat all the best.
I’ll remain a reader and (hopefully) an author who gets a featured post there now and then. 😉
Congrats and good for you —-
I hope the extra time you pick up will help you find that next mountain to climb.
Personally, I would like to know more about the 10% offering tied to real estate ?, you mentioned—- can you send me information about this idea/plan?
Haha! I bet.
Basically my friend is starting to buy real estate and only has so much money. So he needs investors, is paying 10% on money loaned to him, and I’m in.
It’s pretty simple. 😉
That’s an interesting development, ESI! I am glad that you found success, and happy that I was a part of it while in the VIB program. Thanks for all of your encouragement and advice along the way.
In the end, it is a business decision and it sounds like you made out well on it. So, good for you! You put a lot of work in and deserve to reap the rewards.
I look forward to seeing where Rockstar Finance goes from here!
TPP
Thanks! We’ll keep in touch for sure! 😉
Wow, that’s big news ESI! Sounds like it was the right move – I’ll be interested to see how the site evolves! Congrats!
Mixed emotions here as Rockstar has been a big part of my blogging life for over a year now. Thanks so much JD for everything – the helped that you’ve extended and all the knowledge that you’ve shared.
Congratulations!
I’ll still be around for the VIBs. You should be getting an email with details! 😉
Wow! This is surprising news, but very cool to hear that the site has done so well in the past months. Thanks for detailing the specifics–it’s really interesting to hear about the sales process and how you valuate web sites. Best of luck to you John with your next ventures!
John
Many congrats!!
Impressive Money on Money multiples over such a short period of time. Even better than what you get with Venture Capital (typically 2.5x over 5years on average). So, very inspiring stuff.
Out of interest, what has been the biggest driver of growth since you bought the biz? Also, did you own the Trademark for “Rockstar Finance” and was that valued separately?
Kat: Big Congrats and good luck!
Honestly, Rockstar Finance grew mostly from word of mouth. As more people talked about it, more joined, then more talked about it, then more joined, etc.
Many congratulations! You sounds like you both bought Rockstar Finance for the right reasons and sold it for the right reasons. That’s a good place to find yourself.
Also really appreciate the transparency around this. That’s one of the great things about this community
Your next round of retirement plans sound pretty good! Enjoy. Looking forward to what you do when you next decide that you want to sink your teeth into something big!
I was surprised when I received the email from Kat. It was really nice to read more about the sale and about Kat here.
Sorry to you go as you’ve been so good to so many of us ESI. But I totally understand your reasons for selling.
I wish you all the best with your new endeavors!
Thanks! You are doing well — keep up the great work!
Wow, this is big news. I know this is probably going to come up eventually, but what is going to happen to the VIB program?
It’s still going to be there — and I’ll be part of it. All members should be getting an email with details.
Wow, big news!! What you’ve done with Rockstar Finance is nothing short of phenomenal. Congratulations to you and best wishes on your future endeavors!
I will be excited to see what Kat does with it. 🙂
Congratulations!
Congrats on the sale, and impressed you accomplished your goals within a year!
Looking forward to reading about your next ventures and also the continued growth of Rockstar.
Wow! Congrats on the sale, been a big fan of the site since joining the PF blogging community in 2018. Looking forward to seeing where Rockstar Finance will go in the near future.
All the best!
Not familiar with Destin, FL, but highly recommend St. Petersburg, FL.
Any specifics? We’re actually looking that way too (we have an ever-shifting list of places we might end up).
Way to go! And really sounds like the buyer is awesome. It’ll be interesting to see what Kat develops over time as everyone has their own flavor and personality.
Do you feel that running the side was more time than expected? I tried giving it a go back in 2010 with my network and boy oh boy, it felt like I was going back to work at times. Too many personalities and interest to deal with.
The 10% fee is a little too steep for my blood. Hopefully the fever goes down as the price goes up? For example, would you be OK paying $1 million in fees if you sold your site for $10 million? That’s sounds like a heck of a lot of money!
I bet you’re going to feel very happy with all this time back on your hands now. I’m going through the same debate about whether to sell my site or not, but I keep on thinking about my son and what if he doesn’t get a great job out of high school or college. What a great hedge it would be to continue to own Financial Samurai.
Congrats again!
Sam
Well, it depends.
Would you rather have 90% of $10 million or 100% of $750k?
There was really no risk to me. He either sold the site at an amount higher than what I thought I could (after deducting the commission) or he didn’t and then I would just sell it myself.
Let me know if you want me to write you a guest post on the subject. 😉
The broker fees do go down for higher dollar amounts.
Congrats John and enjoy your new free time!
Hi ESI
Thanks for running the site, and congratulations on the sale!
$1 million through blogging is a fantastic milestone. Hopefully it only goes further up from there!
Matt
Congratulations, John. I’ve been a Rockstar fan since the J. Money days, and it’s been a pleasure to see what you’ve done with it and to be featured/contribute since my leap into the PF world last year. I look forward to Kat’s plans for the site.
It sounds like you made a great decision for yourself, and I hope you enjoy your newfound free time.
I read this all with interest, but once I passed the 200% ROI in one year I could not think about anything else. We should all buy Rockstar Finance instead of VTSAX!
Haha! There’s a bit more risk in websites. 😉
I have been following both ESI and Rockstar Finance…nice sites.
I live in Nevada but have a second home in Pensacola Beach, FL (near Destin). I have not been to Destin but Pensacola Beach is awesome and is reportedly more “sleepy” vs. Destin. Seems Destin is more built up and touristy overall.
The white fine sand beach at Pensacola Beach is best I have seen and I’m well traveled. It won best Florida Beach last year in USA Today poll.
We short term rent our property when not there but plan to move there in the next few years. Let me know if you want more info about Pensacola Beach.
We’ve heard the same from others. Thanks for confirming it. I do like “sleepy.” 🙂
Congratulations on the sale! Destin is one of the best beach locations in the Gulf South. We go to Sandestin just about every summer, and the community we stay at pretty much has the necessities for entertainment which is great to not have to worry about the Summer crowds/traffic. The further east you go near the Graton State Park the better the communities as well as the famed 30A. There is also an airforce base in Niceville just north of the beaches. Overall, Destin is a great area and where most of the affluent people vacation in the gulf south. Good luck!
Wow, that’s a pretty quick timeline. Having been a part of a few companies that have sold, it usually took months to do full due diligence – things must have been well in order for it to go that smoothly. Congrats!
On the topic of beaches in Florida – I have a few thoughts on that. Living in Florida for 35 years, we went to just about every beach from Pensacola to Key West to Jacksonville and still love these two the most:
St. Pete Beach – Mostly retired hippies and an older crowd enjoying beach life. You’re in a decent sized metropolis (Tampa/St. Pete), with Ft. De Soto beach close by (a huge secluded island you can drive to with no buildings). The entire St. Pete Beach to Clearwater area is great if you want a beachy feel with some infrastructure and nightlife without too many chains.
Sanibel/Captiva – Sanibel is famous for its shells, beaches and wildlife sanctuary. Most places aren’t open too late, and the entire island has a slow pace to it.
Most beaches on the gulf side are lovely though, with relatively few being as corporate-y as the Atlantic side.
Congratulations on the sale and your newfound free time! Sounds like you got a great buyer for Rockstar Finance. I look forward to learning more about her. Thank you for developing the site to where it is today. Being a new blogger I only discovered Rockstar Finance recently and really enjoy getting to know the community. It was nice to learn a bit about the history of Rockstar Finance and its different owners through your post.
Congrats on the sale! I’m interested to see how the site continues to grow.
Big news, indeed. Congrats ESI. I actually discovered Rockstar through your initial purchase post when I first started reading money blogs. Thanks, as well, for the detailed information about your decision-making and the sales process. I always find it interesting to get “behind the curtain” perspective on business types with which I’m unfamiliar.
I appreciate the transparency and am excited to continue reading ESI. Best of luck with your next mountain.
Dang, that’ awesome, congrats.
Having tried to own/operate three different sites at once (and somehow devote attention to all of them), I can totally echo the sentiment of recapturing time — especially when the ROI makes it an attractive opportunity.
(Made even easier by the fact that Kat seems like a great fit for picking up where you leave off/you don’t feel uneasy about passing off the reigns to someone else).
Also interested to hear about the local business/what that might entail — a story for another day soon.
Congrats again!
– Ben
Just came across this site. Very interesting! Congrats on your success!
In terms of Florida Gulf-side towns, I grew up in Sarasota, and still think it’s pretty great. Might get better value down in Venice/Englewood, but Siesta Key in Sarasota is arguably the world’s best beach and there’s plenty to do in Sarasota with spring training, the arts, great restaurants, etc.
I love building my site and don’t ever imagine selling it because I love all the perks it provides, but you never know, one day might be too old to be banging around at all these food and wine festivals and put me feet up.. as for the gulf coast had a great time at Sandestin, fentastic beaches, great restaurants, fine weather, definitely worth checking out… cheers.
Congrats and when you are in Destin you definitely need to head East on County Highway 30A. There are multiple beach towns along the road (Dune Allen, Blue Mountain, Grayton Beach, Watercolor, Seaside, Seagrove, Alys Beach, Rosemary Beach, Inlet Beach) and an 18 mile bike path. Prices definitely climb but all are great areas to hang out. I would have said not to miss the Red Bar in Grayton Beach but it unfortunately burned down last month…but maybe they’ll be rebuilt by the time you are down there. The most famous “town” is Seaside which was used to film most of The Truman Show with Jim Carey. 30A starts East of Sandestin and be sure to go all the way to the East end (30A branches off of Hwy 98 and returns to Hwy 98 just after Rosemary Beach).
If you want to know more about the winter months on the panhandle let me know and I’ll fill you in.
Scott
Just curious, what’s the other website you run that you’re referring to?
I don’t disclose it but long-time readers are familiar with it…
Congrats on this success, I look forward to both RSF and ESI’s futures. At one point I think you mentioned something about the Caribbean. Still planning on that? I’m living a low-key Caribbean lifestyle down here after retiring early. Look me up when you’re in the neighborhood.
I’ll email you! 😉
Congrats on the sale and thanks for the transparent insight. If you are road tripping through Colorado and want to meet up with some financial bloggers around Denver let me know 🙂
Best of luck
Great post. Enjoyed the breakdown. Been reading your site for years but first comment.
We’ve gone to the gulf coast quite a bit. While we love Destin/Ft Walton, we like Gulf Shores/Orange Beach, AL better. These two towns are a bit “sleepier” than Destin IMO. If you REALLY want “sleepy” check out Ft. Morgan, AL. Very quiet community, excellent beaches.
Try the Mississippi Gulf Coast. In particular Ocean Springs. Not your typical tourist trap.
Thanks for sharing all of the details! Congrats on a successful year and looking forward to following you in your next chapter post RF
Wow! I had no idea how sites are bought and sold like that. I am excited because a site I’ve been running since 2011 will finally be allowed to monetize in 2019 due to a changing of the guard for where I get my data from. The previous source didn’t allow commerical use. No such restrictions once I migrate off. I am not doing the site for the money but I’d love for it to pay for itself at the least. I am reminded of the article about 1000 True Fans. Well, I have over 3500 users I can potentially monetize and they’re a passionate bunch. I have no idea how it will go but the least I can do is try it out.
Thanks for ruining one of the best unbiased sites out there…
Congratulations on the transaction, I was aware of the turnover but had not yet read your post on the reasoning.
I appreciate your candor in sharing all of the financials, it is fascinating to observe from afar.
Congrats on the sale! Thanks for all the time you put in to running a great site!
Regarding Florida gulf coast towns we live in Tampa but familiar with the area around. Highly recommend Venice and Indian Rocks Beach area as nice areas to explore. My parents have my grandparents house in Venice but live up north still. If interested in seeing the area feel free to contact us.
Best wishes to you and your family with the new adventures ahead!
Congrats on a successful sale! I was wondering what happened to the website, as I tried recently to go back and it is a ghost town.
I’m not sure what happened with Kat but it seems like she’s left the whole thing to go to the wild.
Your comment about most buyers being business people resonates with me. I have sold several businesses in the past to business people with the last one being an exception.
The element of passion is always missing when it’s just about the money. Ultimately things will go downhill when that secret ingredient is missing.
Thanks for clearing the air in Rockstar. You don’t need luck so I will skip that part.
After several years I jumped over on rockstarfinance to see what it was up to and it’s basically gone. The website is there with a few old blog posts but everything else is gone. I was very sad about it because last I knew, you owned it. After some googling I found this article and see now exactly why it failed.