I've come to the conclusion that the popular saying: "you need to spend money in order to make money" plays a huge factor in the domaining business - especially now, that most of the great names have been taken years ago.
So it seems that only the wealthier domainers who can afford the premium domains or a pack load of short urls (LLL.com/LLLL.com) will profit big in this industry. Is this a fact?
Thats when you need to lean toward Development a little more You can literally use most any domain and build a profitable website ... (Of course I still suggest doing so on .com if possible) - But it doesn't have to be very short - It doesn't even have to be keyword rich ... As cache mentioned ^ You don't need to start out with purchased premium domains either , Many folks do well enough off of Hand registered domains still.
If you don't have or want to risk the funds to jump in feet first in Domaining, Pick a subject you like and start building a website. Do the domain thing on the side.
Most of the great names were taken years ago? Well why do we have stories(from NP too) of people selling fresh regged names for $300, $1000 etc? We're all spending money, so we're all following your first quote. You do have a point about the quality of names though. many great names are already on lock down and owned by select few, but its just like ivy league colleges in US!- Owning or having access to super "quality" doesn't stop other regulars from shining too . You might get a degree from harvard or MIT, but there are so many more other "average" people out there who will still gain alot from going to their regular colleges. When do you think greenjobs.com was regged? How hot do you think it would be on the domain aftermarket if it was for sale?.....i bet its worth a good chunk now. Owning LLL.coms and premium names to me makes your domaining less risky, since you could easily sell and create liquid cash, BUT,the web is so huge and the domain industry really breaks all boundaries and stereotypes. Look at how many NP members there are - it points to the fact that quite alot of people have gained something worthy from this "squeezed" out market as you imply. i think there's still opportunity in it, but remember to go for quality and play smart.
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Excellent post Mark, and the whole thing IMO is why are you into this ? What is your plan ? If you have no money and it is to become rich off the buying and selling and parking of domains I agree that the chances are slim.
Building a website and running it is a business, not domaining. If you take Ipitcher.com and make it into a successful baseball site that you eventually sell for $50,000, the domain Ipitcher.com was not worth $50,000 it was the business built on the Ipitcher.com domain that was the value. You need to have a gameplan going in and stick to the plan. Do not get caught up regging domains you have no understanding of.
Stick to what you know and stick to your budget too. You should be fine if you can do that. Again IMO
New domainers generally want a "get rich quick" scheme (I refer to this as DN Journal Hypomanic Disorder). There never has been one folks.
Most top generics were regged pre-97. You can look at these guys as super lucky to get such a good name for cheap. I prefer to look at them as having amazing determination to renew these domains for 10+ Years. That's not luck. They could have sold it all these years and chose to hold it until now. Some of the domains regged in the late 80s were near-worthless for an entire decade. Do you have it in you to renew your "worthless" domain for 10 years?
Imo, most of the people here wouldn't be all that much better off even if they had gotten into domaining in 1988 instead of 2008. Who wouldn't cave in to a $10,000 offer from CNET for your TV.com way back in the early-mid 90s before any of your friend even knew what an Internet was? You needed more than luck, you needed more than access to the information -- You needed vision.
Nothing's changed... Many domainers walked away with $10-$100k profit from very small investments in LLLL.coms pre-buyout. Vision. That was November 2007, not all that long ago... There will be more opportunities, there always are and always have been. Hindsight's always 20/20 -- it takes real balls to put your hard earned greenbacks on a hunch, but that's what you're going to need to do to hit it big nowadays.
Is it harder nowadays? Imho, no (coming from someone who's been around for "awhile"). It's never been easier to learn about domaining, there's never been so many domain auctions, conferences, blogs, magazines, press coverage,... Back when I started, there wasn't a Namepros and most people surfed the net with Yahoo, AltaVista, and Webcrawler
And you know what? I made more this year (already) than I ever made back then...
If you make a sound investment in domain names today and hold it for 15 years, you'll most likely make out very well for yourself. With risk comes reward... There isn't as much risk involved in buying an LLL.com today as there was in 2004 when I watched them on eBay go for a nickel on the dollar (this actually isn't a metaphor!).
Past gains have been phenomenal... But since the Bust, it's largely been a compounding effect. LLL.coms didn't go from $500 to $10,000 overnight -- they slowly went higher month by month, year by year. I was certain in '04 that paying $500 for QXZ-LLL.coms was insane! Vision. I didn't see it then -- I see it now.
My advice: Read, read, read. Learn as much as you can about this industry. Whether you choose to develop, handreg, or purchase aftermarket domains, pick a niche and stick to it. Nobody can possibly be an expert in all areas of domaining, so pick a niche and become an expert in that niche.
I was doing some WM work for a library a few years back which had the following inspirational poem on the wall:
The more you read, the more you know.
The more you know, the smarter you grow.
The smarter you grow, the stronger your voice,
When speaking your mind or making your choice. (author: Jim Trelease)
I couldn't agree more. Those are words to live by and certainly reflect my domaining journey...
Slow and steady wins the race. It might "take money to make money", but saying "I can't", "I came too late", "It's too hard", ad infinitum certainly isn't doing anything but creating a negative environment that promotes and encourages failure.
THEN:
1. You must register for minimum of 2 years, no choice.
2. You pay slightly under $50/2 years if my memory still serves me and no such thing as refund.
3. No place to learn about domaining.
4. Know how was big secret. It was all trial/error/learn method.
5. You rarely find buyers willing to pay more than $50.
They usually say "why pay more when I can register something similar myself" and they were right since they actually could unlike today.
6. If you decide to start a web site - You need to pay top $ for crappy web site unless you know how to write html codes in notepad.
NOW:
1. You can register for 1 year.
2. You pay less than $8/year and can get refund if you wish.
3. Many places to learn about domaining.
4. You meet many nice people who will teach you many know how.
5. From my experiences, average enduser sales are about $500 to $1K currently.
Buyer can not find available domain names that actually make sense any more.
6. If you decide to start a web site - There are many places that shows you how to create web site. No money? No problem. There are many free scripts and free nice looking templates.
Plus, new niche markets are being created everyday.
Just pay attention to what's happening around you.
New opportunities are being created everyday for you to take.
For example, before there was 2G (GSM) and then 3G (UMTS).
Now, 4G is coming
There will be thousands of new valuable domains that you can
register for every new things such as new technologies, new
way of living, new trends...
It's good to have money, but, it's not everything.
1. You have lots of money, but, know nothing about domains.
2. You have little money, but, you know almost everything about domains.
3. You have lots of money and know everything about domains.
Which one are you?
Great if you are #3, but, if not, I rather be #2 than #1 because
#1 will soon lose "lots of money" in domaining.
For newbs if you really want to get in to a new exciting and potentially huge market then I have no doubt that IDN's are going to be one of the best bets in the future of
domaining.
English has been the language of the internet simply because there was no other option. IDN's, ie7,IE8 is changing all of that.
The normal response to IDN is I do not understand how they work and I don't know how to buy/translate etc - guess what, nor did I, and nor did the small but growing band of others who have delved in to this fascinating area of our business - you learn-simple as that. It's up to you.
I still retain an ascii portfolio that is 5 times the number of names that I have in idn format. The vast majority of my sales/traffic/income currently comes from the ascii portfolio but it is gradually changing and we are seeing significant sales for idn the majority of which are under the radar.
In my opinion idn's will be as much a part of the likes of DNJ's sales report as ascii within 5 years.
If Sedo ever gets their act together to promote and allow sales of the most popular languages then that could be even earlier.
__________________ "Let China sleep for when she awakes, she will shake the world" NB - Too late!
Only the Wealthier Domainers Go Far 
You can literally use most any domain and build a profitable website ... (Of course I still suggest doing so on .com if possible) - But it doesn't have to be very short - It doesn't even have to be keyword rich ... As cache mentioned ^ You don't need to start out with purchased premium domains either , Many folks do well enough off of Hand registered domains still.
. You might get a degree from harvard or MIT, but there are so many more other "average" people out there who will still gain alot from going to their regular colleges. When do you think greenjobs.com was regged? How hot do you think it would be on the domain aftermarket if it was for sale?.....i bet its worth a good chunk now. Owning LLL.coms and premium names to me makes your domaining less risky, since you could easily sell and create liquid cash, BUT,the web is so huge and the domain industry really breaks all boundaries and stereotypes. Look at how many NP members there are 
- it points to the fact that quite alot of people have gained something worthy from this "squeezed" out market as you imply. i think there's still opportunity in it, but remember to go for quality and play smart.
