This is what I wrote in June last year:
So you’ve been buying some domain names and you wanna know if it’s working out. How to know you’re on the right track?
A domain name you wanted to get that was free is taken a couple of hours later when you’re ready to go get your batch of names!
Fortunately the possible names are endless and today I was really surprised to found that France is such a backwards internet country. Both in terms of search volume and in terms of domain names that are not taken yet, for which the same names with .com .net .org .info .biz .co.uk .org.uk .nl .de are all taken.
Of course the real indicator is this:
You’re selling one of the many domain names you just acquired to fund buying a 100 more.
Unfortunately I’m not there yet but I don’t mind being patient – I’m looking at this business in the long run. Fortunately people are clicking the ads on the domains, even on the ones were there’s no real content yet. So with my low monthly cost of living I can keep going like this for a while.
Meanwhile I have sold a couple of domain names, which did fund 100s of other domain names. I've also greatly increased my passive Adsense income, and it's it's not yet what I wanted it to be (more than 1000$) but it's definitely a nice stream of money. I've only bought one of the "bigger" earning websites (a quirky site about 3D furniture) among my Adsense sites, but I'm looking to buy more of these soon since it seems to be less work, though slightly more risky.
Apart from this I've also managed to be successful with affiliate marketing. Though not through the usual means, but with a direct connection. It's pretty hard to get your foot in the very competitive affiliate website business. It's also hard to find someone you know and whom you can trust to do business with, but in the end the latter worked out pretty well. Looking out for more of these opportunities...
2015 update: More about income and making money with other people's loans in this article at moneyless.org about "loans without income".