Should You Own Digital Real Estate
Digital Real Estate has increased in popularity by 9,000%!
It’s a fact that it has people’s attention and interest.
But should we invest in it?
I’ll tell you what I think, but before I answer that, I want to dive into what digital real estate actually is.
The first time I heard the term digital real estate was in 2019 and it was in reference to basic online promotion and sales.
This is where it originated. Digital real estate used to refer to content that was created and posted online because it occupied space and it had the potential to generate leads and therefore income for a business.
From there it evolved to mean e-commerce. Owning a Shopify, Amazon or Wal Mart store where advertising money could be spent to drive traffic that resulted in sales was considered digital real estate.
Now, digital real estate refers to buying parts of “The Meta-Verse”.
And I imagine the very first time digital real estate was used probably referred to owning web domains in the late 90’s and early 2000’s.
But most currently, it means paying for title to parts of an online environment like the Meta-Verse.
I wanted to start with these breadcrumbs to point out something important.
Digital real estate has always meant something different and it has always evolved from one trend to the next.
Physical real estate has never done that. It has always meant actual land and property.
It is important to note this key difference.
Real quick though, let’s break down the definition of this phrase Digital Real Estate.
Digital: expressed as series of the digits 0 and 1, typically represented by values of a physical quantity.
You see, “digit” literally refers to digits, the 1s and 0s being used. So if something is digital it means it is made up of 1s and 0s.
Digital can also mean “relating to, using, or storing data or information in the form of digital signals.”
So if something is “digital” it means it is data or information stored with signals using 1s and 0s.
What about Real Estate?
Let’s break down each word separately and then the term Real Estate as a whole term.
Real: Not imitation, or artificial; genuine.
Estate: An extensive area of land.
Real Estate: property consisting of land and/or buildings.
When I read these definitions, I realize that Digital Real Estate is an oxymoron. It doesn’t exist and it conflicts with itself as a term.
Real estate would be not artificial and it must be genuine.
It would have to be land and/or buildings on a physical property.
Digital means it is none of those things. It is just data stored using 1s and 0s.
When I own real estate I own real land and/or structures.
I benefit from the crops, the shelter, the ability to rent it out, etc. that the physical land provides.
When I own “Digital Real Estate” I own 1s and 0s that store data and an artificial picture (multi-dimensional even) of land and/or structures.
I don’t benefit from any of the properties and utilities of actual real estate. I can’t yield crops. It doesn’t provide shelter. I can’t rent it out for those reasons to others in exchange for income. It doesn’t provide anything comparable to real estate.
So the question now becomes, should I invest in “owning” data stored in 1s and 0s that manifests itself as a multi-dimensional picture of real estate?
Or should I own actual real estate?
When I ask these types of questions, I always run it through the following filter:
If I remove the price or the potential for price increase, what other benefits do I get?
With “digital real estate” my answer is nothing. I receive no benefit and it doesn’t yield any actual value.
With real land or real estate, I can list off a myriad of benefits that we all can agree upon.
But what about getting in early on a new technology?
Well the fact is prices increase over time almost regardless of the object being priced.
It’s like a river with a moving current and the further down the river, the higher the price.
Which means at any point I get in the river, if I stay in long enough, I’ll end up downstream and prices will be higher.
What does this mean?
It doesn’t matter when you get into something. If it’s going to be around for the long haul, you’ll still get price increases just by getting in at all and staying in long enough.
If I buy land today, it will sell for more in 10 years. It doesn’t matter that I’m not an early adopter.
Now the risk with being an early adopter is that I might adopt something early just to “get in first” and the thing I’m trying to adopt may never catch on or it may catch on and be short lived.
This is now a description of speculation. Attempting to read a market trend, get in at the right time and exit at the right time.
This is different from real investing where you identify something that’s wanted and needed by the general public or by certain groups and then putting investment capital into that to earn a return. There’s no timing involved you just buy the right thing and make sure it benefits the right people and money will result in ratio to how much you bought.
I don’t speculate. The most inconsistent and least proven way to build wealth is through speculation.
When we look at what has worked for the most people for the longest period of time, it is true investing and always has been.
In summary, I will never own “digital real estate”. While these people attempt to be early adopters on their computer programs, they can keep paying their mortgage payments to me for the real homes I own and let them live in.
If you’re reading this and you agreed with something I said or would like to learn more, I want to invite you to my Free Live Financial Training this Friday at 10:00 pm EST.
Here is a free replay of the one I did last week:
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To Purpose, Wealth & Freedom,
Jerry Fetta is the CEO and Founder of Wealth DynamX. He is a nationally recognized financial expert featured in Forbes, Yahoo Finance, Fox, Chicago Weekly News, New York Finance, interviewed on over 45 podcasts with world renowned experts, earning endorsements and affiliations throughout his career with names like Kevin O’Leary, Grant Cardone, Dave Ramsey, and Pamela Yellen.
Jerry’s mission in life is to help create millions of financially educated and solvent families achieving greater financial freedom and sharing the truth about money with those around them.
Learn more at www.WealthDynamX.com
(DISCLAIMER: The information in this content should not be considered tax, financial, investment, or any kind of professional advice. Only a professional diagnosis of your specific situation can determine which strategies are appropriate for your needs. Wealth DynamX can and does not provide advice unless/until engaged by you.)