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Ask HN: Your best passive income sources?


237 points by robbiet480 657 days ago | comments
nostromo 657 days ago | link
Real estate. (Ok, not 100% passive, but what is?) You can buy a duplex for not much
more than a single family house in many US cities and, thanks to the low interest
rates for an owner-occupied mortgage, rent out half and live for free.
Unlike tech, you will not have a giant windfall with real estate; but also unlike tech,
it's very easy to price your product, find customers, and figure out what your
cashflow will be for years to come.
-----
Vivtek 657 days ago | link
A word of caution: unless you have the personal skills to deal with tenants, do
not make the mistake of thinking that real estate is passive income. Like any
earning occupation, landlording takes attention to detail, the ability not to
procrastinate, and people skills. Unlike most occupations, landlording will bring
you into contact with some of the worst people the planet has to offer, under
what has to be the worst possible set of circumstances. If you want to lose
your faith in humanity, I encourage you to take up landlording.
There are easier ways to live rent-free, unless, as I say, you have the personal
skills to ride herd on grown children or if you are lucky enough to own your
property in an area where normal people rent, and you can find good tenants
on a regular basis.
-----
klawed 657 days ago | link
>Unlike most occupations, landlording will bring you into contact with
some of the worst people the planet has to offer, under what has to be
the worst possible set of circumstances.
I suggest rephrasing to
>Unlike most occupations, landlording may bring you into...
I've had a rental property now for many years. It's in an evolving, urban
Boston neighborhood and the property generates ~$1000 more than
the mortgage, taxes and insurance per month. I have 5 tenants who are
all recent college grads. My agent did credit checks on all of the original
tenants and many new ones have cycled through over the years. Aside
from replacing a couple of appliances (which consisted of ordering them
online and coordinating delivery with a tenant) I've had zero issues. In
fact, the last 3 years, I've given each tenant $100 off of December's rent
to let them know I like having them as tenants. I have about $80,000
out of pocket invested so without even considering the equity I'm
building in the house, I'm getting around a 15% rate of return (granted
at a higher tax rate that a capital gains...)
-----
shanecleveland 656 days ago | link
Nice touch offering the December rent break. I guess it's just like
offering incentives to good employees to generate loyalty and
keep them around for the longterm. I am sure there is great worth
in offering this small incentive to a tenant you want to keep, even
if you could be charging more to a new tenant. Aside from the cost
and effort of finding a new tenant, knowing that you have a
consistent, paying renter that will take care of your investment is
ideal.
My parents have a small, older rental house that they charge less
than market rate for, as they have never increased the rent for
the current tenant who has lived there for several years. They
have had renters trash the place before, and they know getting a
little less from a good renter is a preferred scenario.
-----
klawed 656 days ago | link
Charging a little less than market value is definitely a
winning strategy if you can afford it - a tenant who feels like
they're getting a good deal is going to be a better tenant.
-----
lucian1900 657 days ago | link
On the other hand, interacting with landlords as a tenant has already
made me lose my faith in humanity. For how much any landlord I've
rented from has cared, it was pretty much passive income for them.
-----
Vivtek 656 days ago | link
I'm not arguing. I've been on both sides, and both sides suck.
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Datonomics 652 days ago | link
1. Price slightly under market. (You can always raise it later.)
2. Do a thorough background check. (Wait for a quality tenant.)
3. Make repairs asap.
4. Be firm, fair and friendly.
These things can eliminate 80% of the problems landlords have.
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curiouscats 657 days ago | link
Or pay someone else to manage the property for you. They are not
cheap but with the super low interest rates now (along with house
purchase and rental markets) you can likely find some workable
solutions this way. It isn't passive, but with a property manager it is
much closer to passive.
-----
jrajav 657 days ago | link
My parents run a property management business and they
generally charge $100 of rent after the first month. You have to
have a pretty high mortgage or a pretty undesirable property (i.e.
have to take low rent) for that to cut into your positive net; In
other words, likely if it's a old property you can't get rid of, but
unlikely if it's an investment property.
-----
Vivtek 656 days ago | link
Yeah, I thought that, too. My property managers were even worse
than my tenants, and I went through a couple of services that had
been recommended to me by people I trusted.
I actually had a year and a half with zero income from a house.
None.
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true_religion 657 days ago | link
Best prospect for a landlord I think is to set up establishment in a
neighborhood near a good school and only rent to students or recent
grads working in the area.
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HeyLaughingBoy 656 days ago | link
Students are usually the ones most likely to trash the place.
No, I don't have citations, but I have been a landlord and know
many others who are/have.
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true_religion 656 days ago | link
Engineering students then.
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collegeappz 655 days ago | link
Agreed. Or, what about investing in yourself and your own venture?
Isn't that what entrepreneurship is about?
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sage_joch 657 days ago | link
> Ok, not 100% passive, but what is?
A stock index fund. :-) Usually much less yield for your money, though.
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JoshTriplett 657 days ago | link
If you want a passive version of real-estate investing, just buy a REIT
fund.
https://en.wikipedia.org/wiki/REIT
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patio11 657 days ago | link
Halloweenbingocards.net will probably hit about $6k this October (BCC will hit maybe
$10k). Not bad for $250 paid in like 2009 or so.
I did a course on lifecycle emails for SaaS businesses recently. That did pretty well - a
few hundred sales.
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w1ntermute 657 days ago | link
> I did a course on lifecycle emails for SaaS businesses recently. That did
pretty well - a few hundred sales.
A more professional-looking video on training.kalzumeus.com would've
probably helped your conversion rate quite a bit. And avoiding the use of your
internet handle on the site would've kept it from sounding cheesy to those
outside the HN community.
-----
hiddenfeatures 657 days ago | link
The question remains unanswered whether a "more professional" video
would not have turned out cheesy.
IMHO success proves Patrick right.
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w1ntermute 657 days ago | link
> The question remains unanswered whether a "more
professional" video would not have turned out cheesy.
I don't see how it would have. The whole point of making it more
professional would have been to make it less cheesy. If you fail to
do that, then you've failed to make it "more professional".
> IMHO success proves Patrick right.
Patrick's success has primarily been in the written word. This is his
first foray into selling video-based content, and I think he has
quite a bit of work to do on his presentation. Like most nerds, he's
quite awkward on camera, but it's nothing that can't be fixed with
some elbow grease.
Of course people will cite his Business of Software talk as a
counterexample, but that was highly rehearsed (something he
mentioned on HN) and consequently felt polished (yet still a little
awkward), but the video on training.kalzumeus.com doesn't feel
that way. Moreover, having to heavily rehearse every
presentation you give does not scale very well when you're
creating a series of them to sell online.
Some things that could've been easily improved in the intro video
include wearing a proper suit (or at least a collared shirt) instead
of a red tracksuit, properly styling his hair, wearing contacts
instead of glasses (due to the reflections on them), not wearing
an enormous geeky headset, removing the audio "booms" that
frequently occur in the video, not being in a (Japanese-style
room) and dropping the super-tacky gimmick with the $100 bill.
-----
kaisdavis 656 days ago | link
You don't know if those tactics would have improved his
sales. They're ideas that would make have made the sales
page appeal more to you.
-----
dbaupp 657 days ago | link
Success doesn't prove anyone right, it just shows that the current
strategy is good enough. Who knows if executing it differently
wouldn't have double or tripled the success.
-----
wikwocket 657 days ago | link
> IMHO success proves Patrick right.
Actually, A/B tests prove him right. Or occasionally wrong! But
that's the point of such testing.
He mentioned he has an A/B test going between video/no-video. I
imagine that, if the video version wins, he could consider testing 2
different videos (time and expense permitting).
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w1ntermute 657 days ago | link
The page on which Patrick is A/B testing the presence of
video is https://training.kalzumeus.com/lifecycle-emails, and
not https://training.kalzumeus.com/ (note they have 2
different videos)
You can see the A/B testing in action by visiting these two
links, which explicitly include/exclude the video, on the first
link:
https://training.kalzumeus.com/lifecycle-emails?video=no
https://training.kalzumeus.com/lifecycle-emails?video=yes
Regardless, A/B testing is not a panacea[0]. Is it a good
technique? Sure, in many situations. But just like with
anything else, you have to take it with a grain of salt.
0: http://www.codinghorror.com/blog/2010/07/groundhog-
day-or-th...
-----
dbaupp 656 days ago | link
I don't think that Coding Horror article is very good. It
is too hand-wavey and drawing an analogy that is
stretched a little too far, without giving it a sufficiently
hard background.
I think what he is trying to say is that Phil didn't test
the higher order interactions enough, i.e. he didn't
check that the effect that some pair of action have
when done together (and the effect of triples, etc.).
This is very important to note, and a good point. (I
think one should preferably run a fully crossed
factorial experiment[0], so that every combination is
tested.)
But it is just saying "don't do A/B testing wrong",
which is obviously true. I think a lot of problems with
A/B testing are caused by people who don't have
much statistical knowledge missing some of the
subtleties that comes with any experimental design.
(On that note, there are many articles[1] about why
one needs to be careful using A/B testing, which do
have the backing of statistics.)
[0]:
https://en.wikipedia.org/wiki/Factorial_experiment
[1]: http://www.evanmiller.org/how-not-to-run-an-
ab-test.html,
http://www.cennydd.co.uk/2009/statistical-
significance-other...
-----
bravoyankee 657 days ago | link
Regardless, A/B testing is not a panacea
Right. Deliver an outstanding product right from the
beginning with your very best work. That's the
strategy I use. A/B testing, while important, is often
overstated.
-----
tylermauthe 657 days ago | link
How are you monetizing Halloweenbingocards.net ??
-----
patio11 657 days ago | link
The site encourages people to sign up for the free trial of Bingo Card
Creator. Some of them will pay $29.95 to print more than 8 cards. Trial
signup rates and conversion to purchase are both low but the volume is
enormous.
-----
diziet 657 days ago | link
And to add to what Patrick said, via his long tail SEO optimization
strategies the site gets a spike of traffic (starting soon!) that actually
bring in these BCC sales.
-----
choxi 657 days ago | link
This might not be the kind of answer you're looking for, but the best way to truly
passively increase your wealth is to take care of your personal finances (e.g. pay off
your student loans, pay off your credit card balance, invest in a lifecycle fund, see if
your employer offers a 401(k))
I personally really liked the book I Will Teach You To Be Rich -- it has a poor name but
it's dense with incredibly practical advice particularly for people coming right out of
college suddenly making an income.
-----
jfolkins 657 days ago | link
I support the idea of paying off debt. 401k (investment groups) however, is
essentially giving your money to a gambler, and having him play your hand. Bet
on yourself. Always.
-----
jfolkins 657 days ago | link
Folks,
This is long, so I apologize in advance, bare with me.
A 401k is NOT a safe investment. People constantly mistake prior history
to future events yet there is no causality here. In fact, with QE3 in the
wild, the value of your employer matched dollar continues to degrade.
http://www.federalreserve.gov/newsevents/press/monetary/2012...
The question I ask myself is "What will my dollars be worth at the age of
retirement?" and the scenarios I paint continually are ones where I do
not like the outcome, should I continue down a traditional 401k path.
@Saryant and @wikwocket's advice is reasonable, if the current model is
sustainable. I have personally decided that it is not. This is just me. No
hard feelings guys/gals. I just don't trust someone who manages my
account making a gain in the good times, but suffering no losses in the
bad times.
@hartleybrody
I really really love practical advice. And so you are in luck, because I
have a practical "betting on myself" story.
When I moved to Bend, Oregon it was 2005, I was 24, and it was
shortly after my brother had passed away. I was pretty emotional and
wasn't in a rational state at the time.
So when friends, family, every-freakin-person was saying the following
mantra.
"Buy now or be priced out forever"
And with this chant ringing in my ears, I went to a mortgage broker. This
broker proceeded to approve me for up to 415k dollar loan, in Central
Oregon, with my wage of 45k annually. (If you have been following the
mortgage crisis this isn't the worst atrocity)
And sitting there with my young wife, wanting something solid to cling
to, a small mechanism clicked in my brain, despite the emotion. It didn't
feel right. So we walked away. I said to my wife
"I'll perform some research and we'll come back."
And so what did I do? I did what any solid nerd would do and went out
to gather data. How? I learned all about scraping (screen scraping, web
crawling, etc) from my new buddy Matthew Turland (plug his book not
mine, which had not been written at the time but I'd like to think my
quesitons helpd him realize his expertise. Yes it's all about me ;-)
http://www.phparch.com/books/phparchitects-guide-to-web-scra...)
Using this knowledge I scraped and regexed the county records
(http://www.deschutes.org/Assessors-Office/DIAL-Search-Form.a...) and
do you know what I learned? I saw that on average the annual increase
in real estate prices in Central Oregon hovered around 3%. Yet by the
time 2005 rolled around, 50% YoY increases were the norm.
"Whoa" I thought channeling a Matrix style Keanu. "This is Not
sustainable"
And so this is the beginning of "betting on myself". By analyzing the
data, I knew that this growth was not going to last, so I convinced my
wife (bless her for trusting me) that housing was a malinvestment, even
though ALL our friends were arguing our stupidity.
It was almost like the biblical story of Noah, where everyone thinks you
are crazy for saying a flood is coming. With everyone thinking you are
crazy, you eventually just shut up.
Then the RE market stalled. This were slowing down, but no one was
putting it together.
Then Lehman Brothers Crashed. And the World was like "WTF Lehman?
Alright this sucks but the losses are limited."
Then the market frickin crashed. By March of 2009 it was beyond ugly.
http://www.google.com/finance?chdnp=1&chdd=1&chds=1&...
And here is where I bet on myself again. I poured half our savings into
GOLD.
OMG!
OMG!!
OMG!!!
This really is gambling. But the data and the research I had, helped me
see that there was this crazy opportunity. Buying into everyone's fear.
One thing I'd like to point out, is that I consulted with my wife. I told her
my thesis and she concluded.
"Well you were right about housing, I'm going to trust you. If we lose
the money, we will move on."
The last bit was really important. I only risked what WE were willing to
lose.
Ok. Where was I? Oh yeah...
So I buy gold, then I start tracking foreclosures. But I get really bored of
tracking them by hand. So I write this sweet bot that scrapes the county
records and converts the PDF documents to readable text using
tesseract (<== so much badassness, I love tesseract)
https://github.com/jfolkins/Deschutes (<== teh codez)
Finally, last year, I reasoned that it was decent enough time to buy
(Rent VS Buy argument and data to support it given our local
environment) and cashed out our gold and bought RE.
Soooooooo....
Quite the rant, I realize. But hopefully it articulates the "betting on
oneself" philosophy that I've taken.
It may not pan out, I'm ok with that. I like my odds better than the 401k
folks.
One thing that sets me apart is that I've learned a crap pile about a ton
of different topics I never knew anything about. (Scraping, Economics,
etc) and am leveraging what I consider expertise into hopefully long
term gains.
Take care -jared
(This is not investment advice. blah blah blah)
-----
nirvana 657 days ago | link
You reached the correct conclusions empirically, but you could
have saved a lot of time and effort by having the philosophy that
would lead you to them. Or more specifically, an understanding of
economics. I don't mean this to sound smug, or anything like that,
I'm just saying that I went thru the same process you did- only I
did it in 1998! and then because I didn't believe it, again in 2001.
By 2001 I knew there would be a housing bubble, even though
there were (at that time) no signs of one. Hell, 911 was the news
at that time.
Some pointers to help you be able to make these kinds of
predictions (and thus maybe look for better data for more
interesting and profitable investments)--
The book "The creature from Jekyll Island" by G. Edward Griffen (?)
is the history of money in america, the federal reserve, and the
"bailout cycle" that happens over and over every 20 years. (And
people act outraged at the "bailouts" in 2008, as if it hasn't
happened dozens of times before.)
And "economics in one lesson" by henry hazlitt-- you can find a
free copy of this out of copyright book online if you google around.
A great overview of economics, starting from the premise of the
broken window fallacy and how it illustrates why so many efforts
that sound plausible totally fail (like keeping interest rates low
and making banks loan money to people who can't repay - the
Clinton and Bush policies that led to the housing bubble.)
Also the topical articles at http://mises.org are great and that site
also has around 900 free economics books you can download.
I went the options-spreads on canadian junior mining companies
route, and I got out of the market in the summer of 2007 when I
felt the crash was imminent. (I was a year early, but for that kind
of deal you don't worry about not nailing the absolute top!)
Spreads might be something good for you too-- "Options as a
strategic investment", by McMillan is the bible. (Using spreads I
get better returns at much less risk than people who buy stocks
directly.)
Economics is a lot like programming- the basics are easy but
there's no end to what you can learn, and it gives you such great
power-- especially when the rest of the world has as much
understanding of the science as the average person does of
writing software-- essentially none. And, even better, the people
who create economic opportunity for you telegraph what they are
going to do years in advance- they campaign on it, even!
-----
jfolkins 656 days ago | link
Thanks for the great suggestions Nirvana! I was only
seventeen in 1998, so I was kind of hung up on teen spirit,
girls, and rock'n roll.
> Or more specifically, an understanding of economics.
You are very correct. I had no frickin clue about economics. I
kinda feel like you have to have the experience and wisdom
to judge books. I didn't have that at the time. I needed to
fill that gap in. So although it may appear I wasted a lot of
time, I feel that I have a really solid grasp on many things
that were mysteries to me before. And I can't really put a
price on what that is personally worth to me.
> I went the options-spreads on canadian junior mining
companies route, and I got out of the market in the summer
of 2007 when I felt the crash was imminent. (I was a year
early, but for that kind of deal you don't worry about not
nailing the absolute top!)
Heh, that is awesome! Nicely done.
One of the things my data has also brought me is
friendship. Usually from people many many years my senior.
One of them who has really helped me in life and I consider
a mentor, also pulled this exact same thing. Getting out in
2007. I was always impressed by that.
-----
nirvana 656 days ago | link
I didn't mean to imply you wasted any time- you
exhibit the one trait that I find exceedingly valuable:
the ability to think for yourself. This is way too rare.
And so I wanted to help you with some things that
you might find useful. (I'd also recommend Atlas
Shrugged, there's a reason it's a popular book, and if
it's wrong, there's no harm in reading it, right?)
Economics in One Lesson is so cogent that it will, I
think, let you absorb a great deal. And then the
Creature from Jekyll Island, which is really a history
book that reads like a thriller, will let you see how the
departure from economics has had an effect on the
country-- an effect the most recent version of which
you correctly identified. (Which was impressive,
frankly, can't tell you how many times people argued
with me about house prices between 1998-2007.
Sadly, going back to them in 2008-2010 and saying
"See, I was telling you this!" didn't earn any kudos
for my having called it correctly... I think their
worldview is plastic and easily gets remapped by TV
news.)
Anyway, the departure from economics is for very
sound reasons-- it profits the people who are
peddling the bad stuff. But that also means we can
profit from it too.
Anyway, I just wanted to give you the books I
thought would be most effective for you. I read a lot
of investment books when I needed to learn how to
invest (Vick's books on Warren Buffett I found
particularly interesting-- now I calculate what my
return will be before I make the investment. People
assume that buying stocks is really risky, but the
reality is risk is quantifiable. I can buy a stock and
know that I will be able to sell it for a specific price at
a specific time-- you can calculate this!)
Anyway, good luck! I admire your datamining--
there's a lot of opportunity for you out there if you
keep that up.
-----
saryant 657 days ago | link
In regards to the 401k, I disagree. Unless your employer only offers
really crappy funds it's in no way gambling.
First off, your employer match is essentially free money. It's foolish to
ignore that. The tax benefits can also be significant. For instance, I
contribute 25% of my pre-tax salary to my 401k. That works out to
$1500 a month but because my taxable income is lowered my monthly
net is only decreased by about $950. That's $550 a month into savings
that I wouldn't have previously had due to taxes.
If you follow the investing philosophy of John C. Bogle, founder of
Vanguard, you'll likely do just fine. Assuming you're young, you just split
your 401k between four index funds: total bond market, total domestic
stock market, total international stock market and real estate
investment trusts (REITs). I do 20/45/25/10. Yes, in the short term you
might take a big hit but in the long term (>20 years) this is historically
shown to perform very well. As you get closer to retirement you increase
the proportion of your portfolio in bonds so as to lower your risk.
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jrockway 657 days ago | link
Indeed. With a historical performance of 9% a year returns and a
100% employer match, you'd have to be pretty pessimistic about
the future of the economy to not have a 401k. (Though one could
argue that taxes will be higher in the future, and so paying taxes
now might be better than paying taxes when you take the
distribution.)
You don't even have to manage the split yourself, there are plenty
of mutual funds that target certain retirement year changes and
rebalance the portfolio as appropriate (basically: less risky
investments as your retirement date nears). There are fees for
this, of course, but for my fund they amount to $90 per 10 years
per $10,000 invested. I think that's worth it if you don't want to
actively manage your retirement portfolio.
-----
phil 657 days ago | link
You still have to be pretty pessimistic to think taxes will rise
faster than your rate of return!
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jwatte 657 days ago | link
The point of 401k is that you compound the growth
on the deferred tax money, and then pay much less
/present value/ tax once you retire. Index funds and
high yield bond funds give you low overhead with
almost no "gambling" element. Drawbacks: Limited
maximum contribution, very long deferred
gratification, vulnerable to future policy changes.
-----
saryant 657 days ago | link
Exactly. I keep all of my 401k in index funds,
same with my Roth IRA. I have other non-tax-
advantaged accounts I use to investing in
individual stocks.
-----
wikwocket 657 days ago | link
If your employer matches, you are literally earning 100% on your
investment immediately. Few other investments can promise the hope of
that, let a lone deliver.
If your employer doesn't match, then it can be a bit of a gamble. But you
have the option to buy the market (index funds, etc) instead of a
particular stock/fund, so you can bet on the entire economy.
And remember that both cases use pre-tax dollars, costing you less for
the same investment amount.
-----
SomeCallMeTim 656 days ago | link
Betting on yourself is ALSO a gamble. Not because of any trait of any
particular person, but because things fail sometimes.
IMO, the best approach is to spread your bets. Obviously getting rid of
debt is the easiest first step, and 401k plans are less-than-ideal
because of the restricted investment options, but you can minimize the
gambler's influence by choosing index funds (if you have the option).
The stock market itself is a gamble, of course, but so is just about
everything else, so minimizing your exposure to any one risk is the best
you can do. I've been in dividend stocks for years and making
$500/month or so with minimal exposure.
-----
hartleybrody 657 days ago | link
Betting on yourself isn't always the safest. But I'd be curious to know
what you meant by betting on yourself. Like investing part of your
savings into a side project?
-----
spiredigital 657 days ago | link
I'd have to say my two eCommerce businesses. They took a ton of time to setup and
market initially, but now they generate a full-time income as I have a team in place to
manage operations.
I love to work on them and often do, but I'll frequently take weeks off at a time to
travel and everything continues to run smoothly. The entire business is based on the
drop shipping model, so I don't have to stock any inventory and can run the business
from anywhere. Plus, the initial capital outlay was just $1,500 so I didn't have to take
on any risk.
For anyone interested, I blog about running my two businesses and eCommerce in
general at:
http://www.ecommercefuel.com
-----
armenarmen 655 days ago | link
loved your book by the way
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JoeCortopassi 657 days ago | link
[Related]Ask HN: How much recurring income do you generate, and from what? (1
month ago)
http://news.ycombinator.com/item?id=4467603
-----
sprobertson 657 days ago | link
[Related] Ask HN: How do you generate passive income? (3 years ago)
http://news.ycombinator.com/item?id=387789
-----
khet 657 days ago | link
I am glad this (and similar) questions gets asked. As a community of
makers, we can get very good at making things but just making things is
not enough. We need to prove to our customers that we created
something of value and then charge them for that value.
This topic cannot be talked about enough.
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rjurney 657 days ago | link
In California, selling cannibas to a co-op you belong to as a patient could be a nice
supplemental income. An Aerogrow makes it easy, and with six legal plants, you can
grow at least 1.5 pounds every 90 days. I think it works out that you can make $10-
15k/year for not much work.
And no, my wife would not let me do this :)
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EvRev 657 days ago | link
That is not passive at all. You have to change the res every two weeks, plus
be on the look out for any signs of stress (bugs, nutrients, and environment).
Then you have to process it, which a pound can be trimmed by a professional
in about 10 hours. BTW you need to supervise them or do it yourself.
Then you get the hassle of dealing with the clubs consignment drama... Not to
mention the stress of worrying about being robbed throughout the whole
cycle.
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pyre 657 days ago | link
> I think it works out that you can make $10-15k/year
> for not much work.
Gross or net revenue? I would imagine that the electricity bills would be not
insignificant.
-----
rjurney 657 days ago | link
Net, I think. The LED bulbs aren't so inefficient. But there is an up front
cost of about $250 per Aerogrow. It's the tallest/biggest unit you need.
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brianwillis 657 days ago | link
I think you win the prize for the most creative idea in this thread.
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jarek 657 days ago | link
If true, that'd say more about the thread than about anything else.
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kevinrpope 656 days ago | link
I'd say it's probably the most unique idea in this thread, given that most
HNers likely wouldn't normally think of dealing/selling drugs as being
particularly creative.
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apike 657 days ago | link
Two years ago, when we started Steamclock, we spent our first two months building
a niche iPhone app. We've done point releases but not added much, yet today it
pays our rent. http://www.steamclocksw.com/weddingdj/
We haven't done any serious research or marketing for it. We simply focused down
and built the highest quality app we could build, and it worked.
-----
w1ntermute 657 days ago | link
You're practically giving that app away at $5. Wedding-related businesses are
extremely high margin, simply because it's super easy to rip people off when
they're really happy (same applies for funerals, except people are too sad to
care in that case).
You could probably sell this for 5x as much and still make more money - the
bride will want everything to be perfect for the wedding and will be willing to
spend whatever it takes.
-----
apike 657 days ago | link
Intuitively, I'd agree. When we release the upcoming major version (iPad
support, advanced queueing, etc) I'd like to try $10.
On the other hand, after 1.5 years at $5 we've been trying $2, and
revenue has been consistently higher since the change. I suspect this is
because it drove us into findable range in the "Top Paid Music" chart, but
with no analytics it's frustratingly hard to prove.
-----
w1ntermute 657 days ago | link
> I suspect this is because it drove us into findable range in the
"Top Paid Music" chart, but with no analytics it's frustratingly hard
to prove.
This is something I hadn't fully considered. One of the biggest
expenses in running a wedding-related business is advertising.
Unlike other purchases, wedding-related stuff is only purchased
once in a lifetime (well, twice or thrice these days in America, but
you get the idea).
Thus, brides and grooms rely on the opinions and advice of friends
- word-of-mouth promotion is key. But ultimately, heavy
advertising is the only way to reliably get information about your
product out to the general public. And the App Store is a great
form of free advertising (well, not counting the cut Apple takes),
especially if you make it into one of the "Top" lists.
-----
SiVal 657 days ago | link
Sorry for such a naive question, but is it possible to do A/B testing
on the Apple App Store? I don't know what their turnaround time
is for changes, but do you just change the price, wait a while,
change back, wait a while, etc., or do you do something else?
-----
apike 657 days ago | link
The price updates within a day, and you get sales reports
daily with a delay of a few hours, and a mix of old and new
price sales on the first day. So it's possible, but the
feedback loop of the charts means that this kind of
measurement is hard to analyze. If you do a test that fares
poorly, the next test will probably be affected by that.
-----
TheFuture 656 days ago | link
Actually, I've been considering how to do this for my next
app.
Not split testing the sale price though, it will be free. (It's
just too hard to get people to buy an app outright) I want
to split test in-app purchases. I think this should be fairly
straightforward to implement. The only downside is in the
app store 2 different items would show as top in-app
purchases with different prices. People might be upset
about that, but I doubt anyone would notice.
-----
parrots 657 days ago | link
Thought: in-app "pro" version to take advantage of the fact that
people pay $$$ for wedding stuff? Keeps you in the top music list
because you're cheap, but some of the more advanced features
might be worth a premium.
(Note: I had "pro" as much as the next version, but seems better
than a multi-hundred dollar DJ)
-----
nanijoe 657 days ago | link
Make an iPad only version and sell that for $9.99 or $19.99
-----
TWAndrews 657 days ago | link
Holy crap yes. My wife works in the wedding industry, and being able to
manage the music for your entire wedding is worth way more than $5.
A DJ will cost something like 50 - 100x that.
-----
raphinou 657 days ago | link
We're considering entering the wedding business with an app.
Would your wife consider telling us what she thinks of it? If yes,
let me know (see my profile for email), it would be great!
-----
ckluis 657 days ago | link
Got married last year. $1200 for the DJ.
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bosch 655 days ago | link
Could you explain to me how a DJ is worth that much
compared to hitting random or play on a playlist on your
MP3 player?
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ckluis 651 days ago | link
Ask the wife :)
But a DJ is more than the money; they control the
tempo/crowd for the other things like garter toss,
cake, parent/child dances.
I could ask why a developer in California is soo much
more than a developer overseas - and they answer
would also be they are kind of a like, but you get
what you pay for.
-----
kaptain 657 days ago | link
People are willing to pay a lot for wedding-related /services/. A lot of
people that want to save money on a wedding would buy this because
they DON'T want to pay for a wedding planner who will ensure that the
music is 100% perfect.
If you price this at $25, you'll lose that group of people that were looking
to save money, (you could argue that at $25 it's still cheaper than a
wedding planner).
Not every bride is foolish enough to think that everything will be perfect.
The more money you have the more 'perfect' it can be. Those on a
budget will opt for a $5 DJ that can get them as close to perfect as their
money will allow.
-----
w1ntermute 657 days ago | link
> you could argue that at $25 it's still cheaper than a wedding
planner
That's exactly my point, when your competition isn't even
anywhere in the neighborhood, you might as well raise your
prices. A bride-to-be isn't going to see a $25 wedding DJ app as
being expensive; she's going to see it as being 1/10th of what an
actual wedding DJ would cause. You said people are only willing to
pay for wedding-related services - well, this is replacing a
wedding-related service, and you have to consider the
competition when determining pricing.
And I don't think it's only wedding-related services that cost a lot.
There are plenty of purchases associated with weddings (clothing,
food, etc.) that are way overpriced.
> Not every bride is foolish enough to think that everything will be
perfect.
They don't all have to be that foolish, there just has to be a big
enough group of them that you have a solid customer base. In
this situation, I think that's definitely the case.
-----
reillyse 657 days ago | link
Just test it, create three different apps and see which one
makes the most money (you could skin them differently or
perhaps you might just need to have a different icon).. of
course there are other issues such as a reduction in virality
(if you depend on it) however you will be in a much better
position to estimate once you actually know how much
people are willing to pay.
-----
helen842000 656 days ago | link
Is there any use of iTunes affiliates in the app? Like
you have a 'beautiful wedding songs' chart & then
you profit from any songs they download because of
your app?
It would also be good to have paid for content - like
pre-chosen track listings, affiliate sales would be high
for this too!
-----
tripzilch 655 days ago | link
True, but at $5 (that's what it is now right?) you also get
more people that will give it a try (before the wedding) to
see if it works well for them. They may think $5 lost if it
turns out to be shitty is just "too bad", but $25 may be a
tad bigger hurdle for just giving something a quick tryout.
-----
bravoyankee 657 days ago | link
Come on, lets be serious. Hardly anyone is going to pay $25
for an app they will use only once. And it's an app. Most
people flinch at any price over $2.99.
Pricing it at $25 would be a disaster. You can bet the barn
on that.
-----
pkamb 656 days ago | link
> Hardly anyone is going to pay $25 for an app they will
use only once.
http://en.wikipedia.org/wiki/Say_Yes_to_the_Dress
-----
geofft 656 days ago | link
Dude, it's a wedding. I don't understand why people
pay thousands upon thousands of dollars for
everything related to a wedding they will have only
once, but the fact is they do.
-----
rytis 657 days ago | link
I suppose this is business common sense, but, man, it sounds awful
from a moral perspective when you put it this way... Really, praying on
vulnerable. Just my very subjective opinion.
-----
pyre 657 days ago | link
The same thing happens to parents in general, but specifically,
first-time parents because they have 0 experience.
-----
w1ntermute 657 days ago | link
Yep, baby products are another good example. Initially, the
parents are happy, but soon enough they become stressed
out, for the long haul. Both emotions play in the retailers'
favor.
There was a controversy a while back about how Target
figured out a teenage girl was pregnant before her dad did
(based on her purchases) and started sending her ads for
baby products. The reason why they did this is because
people don't shop around for the best deals on everyday
items, not really. People think they're getting the best deal,
but they're actually trapped in their habits.
One of the few times when these habits are reshaped is
when a baby is born, because newfound parents suddenly
start buying a lot of new stuff, but don't have a lot of free
time to research the options. By detecting customers who
will become parents in the near future and sending them
specially targeted advertising/discounts ahead of time for
new products that they'll need, you can snag them as
customers for years to come.
-----
AVTizzle 657 days ago | link
Awesome icon.
>>We haven't done any serious research or marketing for it.
It could be a personal taste question, but why not any marketing? With
enough traction to be paying rent based solely off word-of-mouth and organic,
you certainly seem to be creating value for people. There are easy/free/cheap
ways to market apps, definitely at least some amount of money being left on
the table.
Congrats either way, good stuff :)
-----
apike 657 days ago | link
Thanks! Icons are huge on the App Store, an excellent one is a must
have.
We've done some experimenting with marketing, but couldn't figure out
any strategy that could convert a bride or groom for $3.50 (the amount
we net after Apple's cut). We tried and abandoned Google ads,
Facebook ads, and advertising on wedding blogs. Virtually all app-
marketing services focus on free apps, and most of them are grey hat in
some way.
For a general-purpose app (like our upcoming Party Monster, a more
general music app) you don't need to be targeted, but for a wedding
app you need to target engaged people, which is expensive!
-----
ecaradec 657 days ago | link
You may try to contact zankyou or some other website that
manage wedding list. I used them for my wedding and they also
promote other products. I think they might be interested into your
product. Their users are the perfect fit for you : engaged and with
an inclination for technology.
-----
lessnonymous 657 days ago | link
This app is an AWESOME idea. I wonder if there's any other verticals that it
could be adapted to. Maybe conferences? Funerals? Religious services?
How about fitness? I do fun-runs and I would KILL to have playlists for warm
up, first 1km, middle run, last 500m, victory and warm down.
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apike 657 days ago | link
Thanks a lot! We have two projects in the lab:
- Party Monster, a general casual DJ app with crossfade, queueing, etc.
- Event DJ, a more generalized and pro version of WeddingDJ that could
be marketed to conferences, small theatres, etc.
-----
interg12 657 days ago | link
great app idea. Would you be offended if someone made a bar mitzvah
version?
-----
apike 657 days ago | link
Of course not - we have competition already as a matter of fact. I'd be
interested to know what would be different about it other than the
marketing.
-----
gyardley 656 days ago | link
Something specific for the candle lighting ceremony, perhaps?
Usually there's a snippet of a song played for each candle -
something themed to the party lighting the candle, played just
long enough to let them make their way to the front of the room.
For this I could see a 'fadeout after X seconds' setting or a
'fadeout when I press a button' setting. Since the snippets are
short, I could also see people wanting to cue up a spot in the
middle of a track - the chorus, not the opening.
Otherwise I can't think of much of a difference.
-----
veb 657 days ago | link
I use TeeSpring (http://www.teespring.com) to create t-shirts and market them
towards people on my Facebook page (http://www.facebook.com/ModernSherlock).
Generally does very well. Way better than other stuff I've tried, like SEO/Marketing
etc. The only problems I have is using a crap design, so it pays to know what the
audience really wants before I try selling it to them.
-----
Eliezer 657 days ago | link
I've considered selling T-Shirts. How much time do they take to create? How
much income do you make, for how much effort?
-----
veb 656 days ago | link
My last design took about 5 minutes, and it took maybe 20minutes in
total "advertising" and I got back... two months salary. (software dev, in
NZ)
-----
mcantor 657 days ago | link
I sell posters of a vim cheat sheet I designed (see my profile for link). I ship my
inventory to a 3rd-party fulfillment provider who plugs in to Shopify with a custom
app, so all I have to do is re-print when the inventory runs out and handle the
occasional customer service problem. Digital downloads are a total freebie.
-----
statictype 657 days ago | link
Neat. I've thought of doing things like this before. Do you mind sharing how
many figures you make on this? How do you handle the actual printing? Is that
also outsourced?
-----
mcantor 656 days ago | link
I lucked out with this project; it began as a Kickstarter which got
incredibly overfunded:
http://www.kickstarter.com/projects/maxcantor/beautiful-vim-...
It hit the front page of "Featured Technology" projects and lived there
for almost the entire funding run.
I used UPrinting for the printing, who I'm quite happy with. It cost less
than a thousand dollars to do the initial run of 500 posters.
Initially, my approach to shipping was to buy 500 poster tubes from
Uline (no relation to UPrinting) and ship them myself. This was an
unmitigated disaster; a cataclysm; a miserable shit-show of
Brobdingnagian proportions. There is simply not sufficient support for the
"hobbyist shipper"; USPS doesn't know what to do with you, UPS and
Fedex charge too much (especially for international shipping), and the
label-printing tools are across-the-board some of the worst software
I've ever worked with. After months of Kafkaesque hijinks with USPS, I
gave up and shipped my inventory to Fulfillrite, a third-party fulfillment
provider. Thank God for those guys.
I haven't run the numbers to determine my exact profit & loss, but I
make more than just beer money. I don't know if I'll ever sell enough to
come even close to what the Kickstarter originally made, but the web
store has been bringing in around $750/mo in revenue, which translates
to something in the range of $350 - $500 of profit.
I tend to make money to the extent that more eyeballs hit the site. Last
month, someone mentioned the poster in passing in the comment of a
blog I'd never heard of, and I made $300 in six hours. I have no idea
how to advertise, though, so that kind of thing is usually just lucky
happenstance for me.
I'll probably do another couple of poster projects (bash, emacs, etc.); if
they are even nearly as successful as this one, I might eventually be
able to live exclusively off the profits! An exciting prospect, but one that
is quite far off.
Feel free to drop me a line if you have any other questions. I really
ought to condense this stuff into a blog post some time.
-----
neel980 657 days ago | link
A supportive working wife, nothing beats that :)
-----
danellis 657 days ago | link
I should hope not.
-----
jawns 657 days ago | link
This is probably not your ordinary type of passive income, but it's income for work I
would otherwise be doing anyway, so hopefully it counts.
I run Correlated (http://www.correlated.org), a site that publishes one surprising
correlation a day, using data generated by readers.
It was never really intended to be a money-making project, although I did give
display ads and affiliate links a try, with very little success.
And then ... a book deal fell into my lap.
I had been shopping around a book proposal for "Experiments on Babies"
(http://www.experimentsonbabies.com), and one of the publishers that was
interested in that book also happened to note that I was the creator of Correlated,
and asked if I would be interested in a separate deal to turn Correlated into a book.
I got a very nice advance for the two book deals, and in the case of Correlated, the
writing involved is, for the most part, what I'd be doing anyway, deal or no deal.
-----
sinak 657 days ago | link
Two friends and I started http://repeaterstore.com straight out of college. Within a
year it was profitable, and within 3 it was doing $3 million in revenue (and about a
15% profit margin). It's pretty much stabilized since then, and we hired a manager to
monitor the operation. Most stock is shipped through drop shoppers, we just have 2
customer support people to handle phone calls and emails. Forthe last 2 years we've
been working on new, more interesting startups - but having a stable source of
income has been incredibly valuable in letting us bootstrap until we could raise funds
from VCs. Niche eCommerce can be awesome.
-----
ssebro 657 days ago | link
You're having db issues here :
http://www.repeaterstore.com/applications/small-building.htm...
-----
spiredigital 657 days ago | link
Totally agreed! Just left a comment above about how eCommerce is my
favorite source of passive income.
-----
dxrysom 657 days ago | link
Well, It would be more awesome if your site was not "unable to select a
database".
-----
suresk 657 days ago | link
I really like building developer tools and kind of miss doing it full time. I built a tool for
testing/playing with REST services last year and sell it on the OS X app store:
http://www.uresk.net/httpclient/
I'm not getting rich off it, but it usually brings in a few hundred bucks per month and I
like hearing from fellow developers who benefit from using it.
-----
nja 657 days ago | link
That's pretty cool, actually. I would never have thought of selling an app for
that, as most everybody I know uses Advanced REST Client (
https://chrome.google.com/webstore/detail/advanced-rest-clie... ). It must be
really neat to know people are choosing to pay you for your product over using
a similar free app.
-----
suresk 657 days ago | link
Thanks.
The browser-based ones have improved quite a bit recently. I use
Advanced REST Client whenever I'm on a Windows machine - it is quite
good.
There are a few features that my tool has that make it worth a few
bucks for some people, I think, most notably being able to save requests
and share them with other members of your team. I've heard from a few
folks who have them checked into source control as part of manual
testing scripts (there are some interesting opportunities to automate
this kind of testing, too, but I haven't had time to focus on it).
And I'm releasing a feature soon that will let you paste in cURL
commands and turn them into requests, which is handy when you're
working with a webservice that has examples of requests given in the
form of cURL commands (which is a lot of them).
Even if you're competing against free apps that match and even exceed
what you can offer in some areas (which is frankly going to be more and
more common), you can still find little features that might be fairly simple
but add a ton of value for a certain subset of people.
-----
ExcitedByNoise 657 days ago | link
I use this tool as well. Comes in handy. Any chance I can put in a feature
request to reduce the minimum window size? About 960*600 would be perfect.
-----
suresk 656 days ago | link
Glad to hear it is useful to you.
I'll look into making the minimum window size smaller for the next
release - thanks for the feedback.
-----
krickle 657 days ago | link
Did you do any market testing to see if there was a need, or was this
scratching your own itch?
-----
suresk 657 days ago | link
It was just something I needed at the time - I was doing a lot with REST
services at the time and thought a simple tool for interacting with them
would be handy.
-----
robertfall 657 days ago | link
This is still my go to tool for GUI request crafting. Thanks!
-----
gsibble 657 days ago | link
I use this! Great work!
-----
andrewljohnson 657 days ago | link
Our highest selling app (a hiking app) makes 15-30K/month, depending on the
season. Our other navigation apps don't make quite as much yet, but some are
getting there. You can figure out from my profile which it is, but I didn't want to name
it in the thread and have this be something that turned up in searches.
I wouldn't call it totally passive, but if we ignored it, it wouldn't stop making money.
We have consistently grown the sales over the last couple of years, and we are
about to introduce a premium in-app purchase.
I have always thought making iPhone apps was a good business, despite what you
hear on this forum.
-----
peto123 657 days ago | link
Congratulation, good work! Anyway, the question was about passive
income...I suppose you have to do a bit of marketing, user support, thinking
about new features, etc...isn't it then just a business?
-----
andrewljohnson 656 days ago | link
Perhaps, though it seems like a lot of these responses fall in that
category.
I'll say this - I used to work on this app day and night, and now I try and
just do the part I enjoy the most, and leave most of it to expert
developers and friendly support people. My focus is now on growing the
platform, business development, and design work.
-----
fendale 657 days ago | link
I followed through your profile, and the hiking app looks very good. Great job!
How do you get 'outdoor maps' into the App, ie do you license them or are
they available freely somewhere?
-----
andrewljohnson 656 days ago | link
We pay for use of some map servers, and use free servers. If you have
GIS server skills and soe capital, you can tile and serve the maps
yourself... Lots of good free data out there.
-----
EGreg 657 days ago | link
Is it a paid app or a free one?
-----
andrewljohnson 657 days ago | link
Paid, the price has been between .99 - 24.99, and now sells for 9.99.
The premium add-on will be 19.99/year.
-----
kolinko 657 days ago | link
Real estate - I used to own two flats, and get $200-$300 from each one of them. I
recently sold one though - I think I can make a better use of the money by other
means. iPhone/iPad apps - I did two or three successful apps, right now they bring in
$20-$40 daily. The last time I touched/promoted any one of them was last December,
and the sales are quite steady now. I bought some S.DICE shares (
http://polimedia.us/bitcoin/mpex.php?mpsic=S.DICE ) @0.0032, spent 800 BTC on
them I think. Got ~20BTC from dividends first month, ~5BTC dividends the second.
It's very risky, but there is some potential for growth there.
All in all I get ~1200 USD of passive income which would be considered an average
pay in Poland. I've got a startup on top of that which brings a lot more though.
-----
dbaupp 657 days ago | link
Is the 1200 per month?
-----
Marwy 657 days ago | link
Can you tell the name of this startup?
-----
danneu 656 days ago | link
I make (well, past-tense at the moment) almost $2k/month on a vBulletin play-by-
post gaming forum I started back in 2007. One single adsense banner below the
navbar.
I actually burned out within 6 months of trying to bootstrap the fledgling forum with
fake activity, clever backlinks, and entertaining the trickle of registrants.
Burned out enough to take a a break for a while. Came back months later and it was
a bustling forum of activity. Apparently I'd just reached that critical mass necessary
for the community to be autonomous (able to entertain itself and cajole newbies to
stay) before I took that break. Nowadays, I do very little beyond pay the server bill.
It's staggering the amount of work volunteers (moderators) will put into maintaining
a community and I'm grateful.
Recently had adsense disabled on my website after some automated process
decided my website was "mature/adult-themed". The automated email cited a post in
our forum's off-topic spammy section where some user copy and pasted the phrase
"sexual intercourse" over and over again in Mandarin. Just some non-Mandarin-
speaking teenagers being silly for a moment. Now I'm working on getting adsense
reactivated.
-----
dholowiski 656 days ago | link
I'd just like to point out that this is a classic "Overnight"... well, after 6 months
of crazy hard work "success" story.
-----
firebones 656 days ago | link
As well as the risk of dependence on a single revenue stream subject to
being shut off by automated algorithms flagging your site based on UGC
from teenagers.
-----
bigethan 657 days ago | link
Airbnb. High value customers and very little overhead on my part. Not totally passive,
I guess, but takes up very little time and makes us a decent bit of money on the side.
-----
EGreg 657 days ago | link
Could you disclose how much one can make on airbnb? I have a 2 bedroom
apartment and sometimes, when I leave on vacation, I would like to rent it out.
-----
bigethan 657 days ago | link
Depends on your location. Do an airbnb search in your area to get an
idea. I just made up a price for mine, and when I was getting tons of
requests for it, raised the prices to slow them to a manageable rate.
Living in SF doesn't hurt.
-----
marcojgm 656 days ago | link
In SF you could easily rent out a spare room in a 2br apartment
for $65-120 per night depending on the quality. I typically do 10
days a month at $100 per night. Sometimes I hire a cleaner, and
buy some wine/snacks/breakfast for guests but it's been very
easy and I love doing it. Disclaimer: I work for Airbnb.
-----
redthrowaway 657 days ago | link
Easiest way to figure that out is to check what's available in your area
on Airbnb and see what equivalent places are going for.
-----
ericdykstra 657 days ago | link
Not 100% passive, but fantasy sports has been a nice side income for me this year. I
used to play a lot for almost nothing, but then found daily fantasy games (pick a new
team every game day, play against other people) and have made a decent return on
my investment.
I play on fanduel.com almost exclusively. If you have any questions or want some
help getting started, send me an email (in profile). My referral link if you're so
inclined: http://www.fanduel.com/?invitedby=yudarvish&cnl=da
-----
sejje 648 days ago | link
I have an old poker friend who started a similar site: http://buzzdraft.com/
It's formatted to be similar to poker sit-and-gos.
-----
scheff 657 days ago | link
I'm about to write a book on precisely this topic. I have been looking hard at
addressing this issue over the past 10 years so that I can focus on what's important
(Startups!). And I believe that I have finally found the best passive income source,
given the limitations that people like ourselves are working with.
I'm still in the process of experimenting with my method to see how far I can take it,
but the basics of it work already.
A lot of what people define as "passive income" is questionable. Most, if not all,
passive income investment strategies require you to hold down a job, or other
income, while financing assets that some day, HOPEFULLY, will be paid off enough
that you don't have to work ever again.
Most of those plans take too long for my satisfaction. There are other means and
methods if you learn and apply yourself. My book will hopefully detail and compare my
method with a majority of others.
The obvious ones to look at, if you can invest time and/or money -
* Share trading * Property investment * Property flipping/options * Google AdSense
(or similar) * Affiliate marketing * Tim Ferriss' muse / 4HWW * Network
marketing/MLM * Website flipping
All of them have varying degrees of learning curve and time commitment to make
happen. Few people will tell you how much commitment you need to make, they just
focus on dangling the carrot.
-----
goggles99 656 days ago | link
I always question people who write books, produce DVDs, hold seminars or
sell any kind of knowledge concerning how to get rich or make extra money.
If you or any of these people are so good and know all these 'secrets' to
success and money - Why don't you just get rich off of it and retire? why would
you let everyone know you secrets? Won't this just crowd your space? Why do
you need to sell this product to make money? Some of you claim that you just
want to give back or help others and you have such success, then why are you
charging me $20-$500+ ?
So I am always skeptical. I think that this is generally snake oil.
-----
scheff 655 days ago | link
It's good to be skeptical. I have seen people get fleeced by get rich
quick schemes, and have concentrated on not being one of those
victims.
Just to be clear - the strategy I'm proposing is NOT a get rich quick
scheme. It's "create a passive income stream", with the focus on
"passive". The definition of passive income is simply "I don't have to
work for this money."
There are several reasons why I'm writing a book. 1. because it's not a
simple strategy - it requires explanation and details. 2. I know that a lot
of people here would be looking for the same solution that I have found,
and they shouldn't have to go through 10 years of exploration and
experimentation to find it, like I did. 3. My knowledge and time is worth
money. People who recognise that are willing to pay money to access it.
But the key reason why someone like yourself might pay someone like
me money to learn from my book is the same reason that I have done
the same for others. Without paying for that knowledge, I would not
have this opportunity to earn passive income.
-----
firebones 655 days ago | link
I used to question most of those people too (and still do), but someone
explained it fairly well in response to why patio11 did this with his drip
marketing class: it's simply a scale out strategy. Given the available time
an expert has, one could make $X as one person just doing it; with
consulting and teaching others, you might reach 5 people in a year; but
by turning that learning into intellectual property that can be distributed
(as a class, a video, a book) you might be able to reach 100x the people.
That said, there are certainly gurus who are merely selling hope, often
because the easy money has been made and they can wind down what
they've learned because the edge no longer exists.
You know what I can't figure out though? Why is Mark Cuban shooting a
commercial to pimp lame shoes?
-----
Matsta 657 days ago | link
Facebook was definitely my biggest earner until they decided to crack down on
everything at the end of last year and basically screwed everyone over.
It's the same deal for SEO, used to be a easy way to promote Adsense, CPA offers
and what not, but the penguin change just makes it harder and harder to rank for
keywords.
2012 has been definitely a slow year for Internet marketing, the worst I've faced
since I started in 2006.
-----
robryan 657 days ago | link
You could argue that this stuff being harder is actually a good thing for the end
user. The stuff that is still around is likely offering more value.
Coming from someone who has done a fair bit of CPA/ Adsense stuff in the
past myself.
-----
cgag 657 days ago | link
I think it'd be pretty hard to argue otherwise.
-----
thangalin 657 days ago | link
http://www.davidjarvis.ca/entanglement/
A paltry $100 per year in ad revenue.
-----
supersaiyan 657 days ago | link
I loled, but you should make some youtube videos, its a very niche topic you
would drive good traffic back
-----
pkamb 656 days ago | link
The Mac App Store. Consistent sales of my $8 app EdgeCase and the $3 Reddit
Notifier. Plus the more expensive One-Hand Keyboard.
In my experience it's much easier to price higher on the Mac App Store compared to
iOS. Especially when you're selling a constantly-running notifier/utility. Feels more
worth it when the app is passively used every time you use your Mac, as opposed to
whenever you happen to find and use the random app on your 3rd home screen in
iOS.
- EdgeCase http://itunes.apple.com/us/app/edgecase/id513826860?mt=12
- Reddit Notifier https://itunes.apple.com/us/app/reddit-notifier/id468366517?...
- One-Hand Keyboard http://itunes.apple.com/us/app/one-hand-keyboard-one-
hand/id...
-----
hendi_ 656 days ago | link
Bunker App (https://www.bunkerapp.com)
Bunker is my SaaS solution which I market to freelancers and consultants who are
looking for a complete solution for their small business (from creating quotes and
proposals over project management and time-tracking to invoicing and payments).
Most other services specialize on a subset of what's needed (e.g. they're only doing
invoicing, or only time-tracking, or only project management) and you have to go
shopping for multiple solutions (and cross fingers that all of them integrate well with
each other!). With Bunker my focus is on providing a complete, well-integrated
experience.
So you could say my niche is "covering multiple niches" ;-)
I'd say that Bunker provides me passive income because my support burden is
negligible and my churn-rate less then my conversion-rate. So if I wanted to I could
go completely passive, but I'm committed to improve the app further and grow it.
-----
bdunn 657 days ago | link
Planscope (https://planscope.io) - predictable, more-growth-than-churn SaaS
revenue
Compared to my book, which fizzles out when I'm not actively marketing it, building a
B2B subscription product is the best, most turnkey income source I've ever had.
-----
pan69 657 days ago | link
Looks great. But is this passive income? It looks like you've invested a lot to
get this off the ground, correct? How much time do you spend on this, let's say
per week?
-----
sprobertson 657 days ago | link
Passive income generally means that hours spent don't directly translate
to dollars. All passive income solutions (that I know of) require some
initial investment. Maybe "time-scalable income" would be a better term?
-----
pan69 657 days ago | link
I understand that. But if you spend 80 hours per week on it, is it
still "passive" or do you simply have two jobs?
To me the idea of "passive" income is that you might spend a
certain amount upfront but after that initial push it doesn't require
a lot of attention, i.e. passive.
-----
sprobertson 657 days ago | link
Well if he's spending that much time on it, then yeah I'd
agree, not passive. In the interest of naming arbitrary cutoff
points I'd call anything more than 10 hours a week not
passive.
-----
donebizkit 657 days ago | link
Brilliant. What was your major set back from day 0 till now and how did you
overcome it? I am asking you because I need some inspiration here. When I
usually hit couple of set backs I tend to demoralize and give up.
-----
bdunn 657 days ago | link
Email me: brennan@planscope.io
-----
ww520 657 days ago | link
It looks great. How do you market your webapp?
-----
bdunn 657 days ago | link
Content marketing mostly, and over delivering awesome, awesome
support that gets customers to refer others.
You can also do really well by just optimizing the hell out of the
visitors/expired trials you already have. SO MUCH EASIER than attracting
more eyeballs.
-----
shmageggy 657 days ago | link
Doesn't all of the above take this out of the realm of "passive"? Or
are you able to magically get all of that done in such a short time
that you consider it negligible?
-----
bdunn 657 days ago | link
I spend about 2 hours a week total, so right - it's not totally
passive... But I'm at the point now where I could outsource
first tier support and maybe get away with no weekly
involvement.
But I want more growth, so I'm still actively working on
promoting Planscope.
-----
gamelodge 657 days ago | link
delivering awesome, awesome support would require lots and lots
of time/effort != passive
-----
dangrossman 657 days ago | link
I launched http://www.improvely.com/ in August, and it's already eclipsed my other
sites in recurring revenue.
-----
nja 657 days ago | link
I've been hearing more and more that B2B is the way to go. Sounds like it has
worked well for you.
-----
tudorizer 657 days ago | link
Good timing with this thread. My attempt is with making iOS games. Trying to mix
pleasure and profit. First attempt is http://clumsyandthestars.com/. Working on a
second one now...
-----
xgalvez 656 days ago | link
Good luck! I'm trying the same thing myself with http://yata.ca. It's more of a
party game played with the iOS device, and thought the interactivity with
people in the same room would add to the fun. Hope all's well with the second
one!
-----
tudorizer 656 days ago | link
looks pretty simple and sweet. Best of luck!
-----
kranner 657 days ago | link
Same here. Our first game is at http://noisytyping.com.
-----
tudorizer 657 days ago | link
I like those screenshots. :) Let me know on twitter when it's launched
@tudorizer
-----
kranner 657 days ago | link
Thanks, will do. Your game looks awesome, btw. I'll give it a try.
-----
Cakez0r 657 days ago | link
How is that working out for you, if you don't mind answering?
-----
tudorizer 656 days ago | link
Not that great yet. My day job doesn't allow me much time to focus on
everything an app implies. Hopefully I will fix this soon.
-----
ryangilbert 657 days ago | link
nflbyeweeks.com - gets over 1,000 uniques each day and generates between $2 and
$5 each day with Adsense. Not overly impressive but it's still nice.
-----
kaizendc 657 days ago | link
You should split test some NFL jersey e-mail submit offers from CPA networks,
instead of Adsense.
I bet you will make way more money from those 1,000 daily uniques with a
good jersey e-mail submit.
-----
ryangilbert 656 days ago | link
Could you email me at draftpulse at gmail dot com to give me a little info
on how that works?
-----
hilti 657 days ago | link
Just with a single page? That's impressive!
-----
ryangilbert 656 days ago | link
Yep. Just one page. I've been considering adding a couple more to see
what would happen.
-----
aw3c2 656 days ago | link
I don't understand that site. Is it just the table with the teams on the right? No
links, nothing? Or am I missing some plugin? Really amazed that a page like
that could attract any useful traffic.
I guess people are lured onto the site by your meta description and then,
searching for links, click on the ads. Evil!
-----
armenarmen 654 days ago | link
Where was the bulk of your traffic from?
-----
ashray 657 days ago | link
I started a site 13 years ago and it is one of the largest sites in it's niche right now.
Very very popular. I do work on it many hours a week (can range from 0 to 100
hours/week) but I don't really have to. I just love working on it, adding new features,
etc. I would definitely call the work passive or hobbyist - even though sometimes I'm
up till 4 in the morning working on X new feature.
Income is in the early 5 digits per month range (USD). Traffic dropped a bit from
August to September so I've been working more on it lately :)
-----
intended 657 days ago | link
Hobbyist would be the better category for it.
At a variable range of 0-100 hours a week, your top end is very far removed
from the passive income part of the question.
In this case the average number of hours per month may make more sense to
discuss.
-----
ashray 657 days ago | link
You're right. And maybe average number of hours per month is more
appropriate. Or lets, say average number of hours per week. Usually the
top end goes to 100 when I'm working on some new feature and am
completely obsessed with it. However, following that there is definitely
burn-out which causes me to go down to the 0-20 per week range.
Also, considering that I've been working on this since high school, I used
to have a lot more time for it back then ;)
In a regular month I probably average around 20 hours per week.
However, during a particularly overzealous month I may go to 35 or
higher. I think at 20 it still falls under passive income.
Just to give you an idea of how my commitment varies. A year ago I had
a full time job and I would sometimes work only 5-10 hours per week on
it. Also, I completely neglected it in my first year of college (yet it paid for
my college) and by my 3rd year there were enough problems that I had
to again spend considerable time bringing it up to spec :)
I'd love to call it a hobby - because that's how I feel about it - but when
24 hours of downtime can cause more than a few hundred dollars of
losses - it becomes tough not to take things a bit more seriously =/
-----
intended 657 days ago | link
Well the way you talk about it, it sounds like you are conflicted in
how to describe it. Your word choice seems to acknowledge that
its a job to an extent, while the intentions behind it are insistent
that its your hobby.
I found that interesting.
-----
deepflame 645 days ago | link
Hi, would you mind telling us the url? Your site sounds very interesting...
-----
kcorey 657 days ago | link
I make lower 5 digits per year from http://docrobot.co.uk.
It's effectively an online desktop publishing system aimed at making it easy for HR
teams to deliver TRS (Total Reward Statements) in 10% of the time, at 10% of the
cost, and with fewer errors.
It took a couple years to write, so I wouldn't say it was an easy investment, but it
was fun to write. These days it ticks over and I don't spend much time on it at all.
Perhaps I should work on advertising more...
-Ken
-----
Jemaclus 656 days ago | link
For a long time I refused to sign up for Amazon Prime, and I'd order things that cost
$19 or $23, and I'd hunt around for something that would bring in that additional $6
or $3 to meet the minimum price for free Super Saver Shipping (USD $25). I got tired
of hunting around for that, so I built http://finishmyorder.com/.
I get like $6/mo in affiliate fees, but I don't really advertise it so I'm lucky I get even
that.
-----
pacomerh 657 days ago | link
Very low ones, the first one is selling a set of shutterstock pictures, aprox 100 bucks
a month. And the lowest one, 30-40 bucks a month with adsense clicks. Basically a
list of powerpoint presenations (chain letters) for the spanish speaking. I spend 30
min a week. I get the PPS files, convert a couple of them to html and put them on a
wordpress blog. edit: forgot to put a url http://powerpointz.com
-----
seanlinehan 657 days ago | link
I was making a few thousand dollars a month from a coupon site. The Panda update
completely knocked me out of the rankings for the past 4 months, but I've been
slowly climbing back up on my top keywords. It was literally no work whatsoever - I
wrote a script to aggregate coupons automagically and outsourced SEO. Turns out
the latter wound up killing me. (If you're an SEO master, please reach out to me on
Twitter) :)
-----
vu0tran 657 days ago | link
How timely. I'm actually starting a challenge for myself to see if I can bootstrap
something to at least $5,000 in revenue a month. I've tried and failed many times,
but this time, I'm going to force myself to only live off what I can make with this
product.
http://vutran.me/blog/desperation.html
-----
sejje 648 days ago | link
Did you release this (blog says oct 15th)?
-----
byoung2 657 days ago | link
I have two sites that I built 3 years ago that still rank well for a few valuable
keywords. Each site has hundreds of pages of content but one page on each site is
number 1 on Google for keywords that pay $5-10 per click. Not a lot of traffic, but
enough for a few hundred a month from adsense and affiliate links.
-----
bosco 657 days ago | link
pixurwall.com - about 2-3k hits a day generating $20-30 in revenue. Cost 200 bucks
to make and has been pretty consistent for over 8 months.
-----
volandovengo 657 days ago | link
where does this traffic come from?
-----
bosco 656 days ago | link
The way the app works, it auto tags 2-3 people that are in the collage
poster that was generated. I believe most of the traffic is generated
that way.
-----
raintrees 657 days ago | link
Real Estate, multi-family rentals.
-----
fudged71 657 days ago | link
Amazon affiliate links somehow floating through the abyss and still pulling in pennies.
-----
mgz 657 days ago | link
I have built http://search-logs.com back in 2006 in a couple of days and ad revenue
still lets me work on interesting projects, not worrying about getting a "real" job.
-----
da_n 651 days ago | link
I make about $80-100 per month in Adsense from a 'scratch your own itch' website I
made to help calculate battle outcomes in a game. Did it over a weekend. I don't
actually play the game anymore, was taking up too much of my life. Working on a
new version though as the code is a shambles and it isn't responsive and most
visitors come from iOS, I didn't know much about JavaScript or responsive design at
the time I wrote it so a horror show underneath. http://battlecalc.net
-----
icoder 657 days ago | link
I created http://www.colormandala.com
It makes ~2 dollars a day from adsense. Breadcrumbs, but I haven't spend any time
on it for like half a year. Amazon affiliate adds almost nothing to this. Being in the
Chrome Webstore seems to have helped a lot in page visits.
I still wonder from time to time if I should put some effort in upping this a bit. But my
time is limited and the app doesn't fit my current strategy (mobile, mhealth
specifically).
-----
abhishekdesai 654 days ago | link
SignInStyle.com
Launched in 2007 as a free service, got covered in CNBC India. Got loads of requests
overnight so had to make it paid afterwards.
Around USD 2-3k income without doing lot of efforts.
It is one of the most unique ideas you can ever come across. Requires no paid
marketing. You get extremely happy when Olympians, photographers use signatures
designed by you on their websites and photographs as autographs.
Highly gratifying passive income.
-----
khet 657 days ago | link
I spent 2 weeks on a Themeforest xhtml/css theme about 3 years ago. It still gives
me a 40$ every month. Nothing to brag about but it takes care of my hosting bill :)
-----
tudorizer 657 days ago | link
Link?
-----
pczzy 657 days ago | link
I have a website, http://www.mfrbee.com . Not a lot of traffic, but enough for a few
hundred a month from adsense.
-----
whalabi 657 days ago | link
No offense, but you should get someone to fix the English, I was immediately
turned off.
-----
dshimy 657 days ago | link
https://www.jabwire.com - collaboration tool for software projects, SaaS revenue
-----
dhechols 657 days ago | link
Last February I started a small YouTube channel surrounding eSports called
DrZealotTV. http://youtube.com/DrZealotTV
Although it hasn't even broken even, I'm now equipped with a ton of expertise and I
have a few efforts I'm working on that I think will be quite popular. :)
-----
demostenes 657 days ago | link
My website about PC processors http://www.jaki-procesor.pl/ (in Polish) gets me
around 200$-300$ per month. US version http://www.best-processor.net/ is barely
alive tho.
-----
kkoppenhaver 657 days ago | link
A site that I've recently stumbled across and been reading through voraciously is
smartpassiveincome.com. It has some pretty solid tips and in 3 episodes of his free
podcast, he goes over 8 potential types of "passive" income business models.
-----
marcelfalliere 657 days ago | link
> theonemillioneuromap.com
I got 4 euros (minus google checkout fees) so far.
-----
collegeappz 655 days ago | link
I've learned that my passive income sources have become nonexistent and going
into the biz. That's to be expected in the early years of a startup. If anyone has other
advice if I were to have pennies to save, do share.
-----
ispekhov 657 days ago | link
Whoever is offering stock as an income opportunity is not smart. And if you think
stock is a passive income opportunity, you are dumb. Go read James Altucher.
-----
rm999 656 days ago | link
All passive income comes from something with value, and hence carries
inherent risk. I'd argue real estate is even riskier, yet you aren't criticizing
people in this thread who make money from renting/airbnb.
-----
SeoxyS 657 days ago | link
Airbnb + legacy Mac & iPhone apps. 50k/yr on average.
-----
enobrev 657 days ago | link
No matter how hard I try, all my eggs only seem to fit into one basket at a time. I
don't recommend it, but it has worked well for me thus far.
-----
ispekhov 657 days ago | link
Go download Qriket app for your iPhone. It lets you scan QR codes and win money.
Not a tedious task that will net you $20 per day.
-----
nXqd 652 days ago | link
is there any similar app on Android ?
-----
armenarmen 655 days ago | link
I own aidsforhearing.com a shitty amazon store selling hearing aids, go figure it's
made nothing.
ideas?
-----
ww520 657 days ago | link
Real estate
-----
hodder 656 days ago | link
Stocks work the best for me so far. Specifically Graham style net-nets.
-----
vjz 657 days ago | link
Tax-free municipal bonds
-----
aantix 657 days ago | link
Care to expand on this?
-----
hkhanna 657 days ago | link
State and municipality bonds are sort of like U.S. Treasury bonds, except
they're issued by a state or local government. They pay a fixed interest
rate, but your interest is usually tax-free.
Of course, they pay a lower interest rate than taxable bonds. Thus, the
only reason these tax-free bonds would be better than taxable bonds is
if you are in a high enough marginal tax bracket to compensate for the
difference in interest between these tax-free bonds and taxable bonds.
An example should make this all clear. Assume you have a marginal tax
rate of 40%. (You earn a lot of money.) If you invest $100,000 in a
typical taxable bond that pays 10%, each year you will get $10,000. But
subtract out the 40% tax, and you are left with only $6,000 after-tax.
Compare this with what would happen if you invested that same
$100,000 in a tax-free state bond. This bond only pays 8%, being tax-
free and all. Each year you get $8,000. But you pay no tax, so you are in
fact better off than if you had bought the taxable bonds!
Now, lets change your marginal tax bracket to 10%--you don't earn
much money, so your marginal rate is low. You invest that same
$100,000 in the taxable bond that pays 10%, you will get $10,000 pre-
tax but only pay your marginal rate, 10%, on that sum, so you are left
with $9,000.
With the tax-free state bond at 8%, you only get $8,000, though you
don't pay any tax on it. So at your low marginal rate, you would have
been better off buying the taxable bond.
My point is, tax-free bonds are probably only useful if you earn a lot of
income each year to put you in a high marginal rate.
Source: I'm a law student and we learned about tax-exempt
state/municipal bonds today in Tax!
-----
nlh 657 days ago | link
Excellent explanation - thank you for the write-up!
Now if only we could find those muni bonds that pay 8% ;)
-----
curiouscats 657 days ago | link
True. Just wait, it will happen eventually. But until then,
sadly, decent income producing investments (bonds and the
like) are not easy to find.
-----
brianobush 657 days ago | link
Municipal bonds, loans to your local government are free of taxes (both
state and fed). I have excess cash that would normally be in certificate
of deposit in muni bonds currently making 3% tax free. There are risks,
best to consult with a money manager if you are uncertain on how to
gauge the associated risks.
-----
nandemo 657 days ago | link
Indeed, municipal bonds are much riskier than good ol' Treasuries.
http://www.nytimes.com/2012/08/16/business/municipal-bonds-
d...
-----
brianobush 648 days ago | link
The key is diversity; I use municipal bond funds and have
had great success and much more income than from
treasuries.
-----
adaml_623 657 days ago | link
And I assume that if your state goes bust then they haircut or default on the
bonds?
So how do you price that risk?
-----
nsoonhui 657 days ago | link
Setting up an ecommerce shop and let my friend runs it.
-----
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