A Closer Look at Domain Name Investing

Here in the 21st century, domain name investing is the modern equivalent of real estate investment. Knowing how to spot a smart investment and understanding how to make it even more valuable to a potential buyer can easily add up to big bucks and a booming business with the potential to keep growing into the future. However, before you jump into the investment game feet first yourself, it’s important to have an understanding of the psychology that comes along with the territory.

The Fascinating Psychology Behind Purchasing Decisions

Did you know that it’s a proven fact that the simple act of spending money, making a decision, or lending our support to a given company or brand can influence our future thinking on a deep psychological level? It’s true!

When we purchase a particular product – let’s say a Wingnut brand laptop for the sake of discussion – we instantly become someone that will favor that company’s products into the future, even before we’ve used it and assessed its true value via actual experience. We’re more likely to recommend Wingnut to our friends and family or favor other Wingnut products. We’re more likely to mentally categorize ourselves as loyal Wingnut users as well.

This phenomenon also applies when we make the decision to lend our support to a given brand. For instance, if we decide to “like” Wingnut’s Facebook page or follow their Twitter feed, we become equally more likely to feel an inner solidarity with their brand. We automatically feel more positively about its products and the lifestyle they reflect from the instant we hit that simple virtual button.

Psychologists have traced this phenomenon back to an innate need people have to see themselves as flawless decision makers. We need to look back on past choices we’ve made when it comes to our support of a given person, brand, or product and see them as wisely made.

The Rationalization Problem

Rationalize PurchaseWhile there’s absolutely nothing wrong with wanting to stand behind the choices we make, we can run into trouble when we allow our desire to see our decisions as well-made to rationalize poor decisions. Becoming a huge supporter of Wingnut computers and recommending them to our friends is fantastic… if the product you bought turns out to be everything it was originally cracked up to be. Issues arise when and if Wingnut turns out to be a huge scam, but you can’t face the music because you don’t want to see your decision to purchase a Wingnut laptop as unwise.

The same sort of thing happens all the time when it comes to domain name investment. To some people, a domain might be a simple series of characters… but web entrepreneurs know that they’re actually so much more. When we make the decision to register a given domain as an investment toward the future, we’re making a commitment. We’re choosing to accept everything that comes along with domain name ownership, including maintenance responsibilities, annual renewal costs, rehabilitation costs, and so on. Whether we ultimately choose to keep it for ourselves or sell it to an eager buyer, we’re committing to everything that comes along with managing that domain as well.

That said, it goes without saying that the very second you complete your purchase, your mind is already looking for ways to rationalize the decision you just made regardless of whether or not you truly made a great choice. You’re telling yourself that it’s going to attract a huge investor with deep pockets. You’re congratulating yourself on making a smart decision, even if you literally decided to make the purchase on a whim.

How to Tell Good Investments from Bad

If this scenario sounds familiar, there’s no need to feel bad, as the great majority of domain investors have made the mistake of rationalizing a terrible purchase choice at one point or another. The key to future success is to learn from your mistakes and develop a full understanding of what all great domain investments have in common.

Short and Easy to Remember

People don’t make it a point to write domain names down. They also have a tendency to simply type domains in according to what they think is logical for what they’re looking for. That said, the best domain names are short, to the point, and relevant. Great domains are as short as possible and easy to remember. Avoid special characters like hyphens, dashes, and so forth. People don’t tend to remember them as part of a URL.

A Common Extension

Although there are plenty of extension options out there these days, the best domains are still going to be .com for the most part. As touched on above, people don’t tend to bookmark or write down the domains they want to remember. They simply type them in… and most people are going to assume that a given website ends in .com. If your URL actually ends in .net or another alternative instead, you’re likely to experience at least some degree of traffic leakage and potential buyers know this.


Great URLs have the potential to tie into a brand. They should be pleasant to pronounce, as well as involve a unique collection of letters. Occasionally they can be descriptive as far as the subject matter of the site, but this is not a requirement. Look for URL possibilities that will help future visitors instantly connect your site along with its fantastic content with your brand.


Great URLs can also be easily tied into up and coming trends or industries that are booming. Many a successful domain name investor has hit on something huge because they possessed an ability to look ahead into the future, predict what the next big thing would be, and invest in URLs that would one day become extremely valuable.

At the end of the day, finding terrific URLs to invest in is far from impossible. However, it does take a little understanding and knowledge when it comes to what people are looking to buy. Explore the possibilities today!