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Ask HN: What was your best passive income in 2016?

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Re: Ask HN: What was your best passive income in 2016?

#131

Post by herbst »

tinbucket wrote: post #120
herbst wrote: post #67

Earlier quoted context omitted.

What i did? Well when i have a idea that i think somebody else could like too i throw it into a website, then throw it out there and see what people think. Sometimes i get valuable feedback and can improve, sometimes it is good as it is. The only "secret" other than user generated content (what makes it actually passive) for me is to never stop trying. I have like 50 in use domains right now, many which i did not ext…

Thanks for the reply. It's something I'm researching but without much background knowledge or experience, it's hard to know where to start. How do you source your user generated content? Is the big earner a forum or the like? I'd kind of envisioned some kind of static sites with ads. Have you taken a noticeable hit like others in this thread from diminishing ad revenue and rates?

My site is only 1.5 years old. Revenue was stable that time. I think the biggest break was before that. But my site is also not "made for adsense" which was what google mostly penalized.

Its more like a forum, but not one. Users can post their own content and others can vote and comment that. Plus it has a huge searchable database.

The problem with static sites (i have those too) is that google loves site updates as often as possible. A site that is good ranked today can be killed by a more dynamic one next day.

Re: Ask HN: What was your best passive income in 2016?

#132

Post by s3nnyy »

jrheard wrote: post #13

Young hackers who have a surplus of income and have funds to spare that aren't being channeled toward debt / family / donations, heed me: save as much of your salary as you can, and put it in boring investments (index funds / etc), probably through vanguard.com (no affiliation, I just use them and have heard nothing but good things from people I trust). You can pretty easily set up your job's direct-deposit system so…

http://earlyretirementextreme.com/ is a bit nicer to read and goes a bit deeper than mrmoneymustache.

Re: Ask HN: What was your best passive income in 2016?

#133

Post by wfunction »

bdowling wrote: post #109
wfunction wrote: post #21

Earlier quoted context omitted.

Ah, so no actual income then? Just stocks going up in value? As in, at some point you'd have to sell before you actually have any income from it, right?

If you sell you pay taxes on the gains, so you are probably better off borrowing against your investments if you need cash, since borrowing isn't a realization event for tax purposes. Investments that pay dividends aren't as good for individuals since the dividends are taxes at ordinary rates.

> you are probably better off borrowing against your investments if you need cash

I don't understand what that means. Whom would you be borrowing from? Where would the cash be coming from?

Re: Ask HN: What was your best passive income in 2016?

#134

Post by refrigerator »

harperlee wrote: post #125
refrigerator wrote: post #28

My brother and I have built a couple of test prep sites for UK medical school entrance exams: https://www.bmat.ninja , https://www.ukcat.ninja . BMAT Ninja made about $25k this year (up from $16k last year) and UKCAT about $10k. Didn't do any work on marketing really so it is pretty much passive, but I think with a bit of work they could both do a lot better. It's a very seasonal market - we only get customers for ab…

How did you get the question bank? Did you pay students for questions? If so, how did the costs balance the profits?

We paid freelancers from around the world (via www.upwork.com) to write the questions based on some guidelines we made (it's not really hard to write questions of this level so anyone can do it with a bit of guidance) and then paid medical students to write the solutions. Probably spent about $7k on this stuff back when it started, so it did require a bit of upfront cost.

Re: Ask HN: What was your best passive income in 2016?

#135

Post by refrigerator »

abutler wrote: post #116
refrigerator wrote: post #28

My brother and I have built a couple of test prep sites for UK medical school entrance exams: https://www.bmat.ninja , https://www.ukcat.ninja . BMAT Ninja made about $25k this year (up from $16k last year) and UKCAT about $10k. Didn't do any work on marketing really so it is pretty much passive, but I think with a bit of work they could both do a lot better. It's a very seasonal market - we only get customers for ab…

Looks good! What did you use to build this?

Thanks :) Nothing special really - Laravel on the backend, Bootstrap on the frontend. And React for the interactive question bank interface (probably not necessary but I wanted to learn it...)

Re: Ask HN: What was your best passive income in 2016?

#136

Post by wfunction »

marvin wrote: post #74
wfunction wrote: post #21

Earlier quoted context omitted.

Ah, so no actual income then? Just stocks going up in value? As in, at some point you'd have to sell before you actually have any income from it, right?

But even if a company doesn't pay dividends, it will often make a profit that ends up on the company's books. A part of this profit, proportional to your ownership, belongs to you who own the stock. In an index fund, the stocks contained in the index will on average pay out a certain dividend and turn a certain profit that isn't squandered on worthless projects. This last part is what makes stocks increase in market…

> But even if a company doesn't pay dividends, it will often make a profit that ends up on the company's books. A part of this profit, proportional to your ownership, belongs to you who own the stock.

You're totally missing my point. I'm saying, even if your stock is "worth" $1 trillion, if you don't actually ever sell it, you haven't earned a single penny from it. It's only money when it's actually money. So my question was whether the OP was ever selling the stock or not.

Re: Ask HN: What was your best passive income in 2016?

#137

Post by cesarb »

DangerousPie wrote: post #103
cesarb wrote: post #100

Earlier quoted context omitted.

I live in Brazil, so if the government defaults, every other investment I could have made here would also crash, and the local economy with them. It's not called the "risk-free" interest rate for nothing: it's the lowest risk investment one can get within Brazil. Corporate bonds, for instance, will have a higher return, due to their higher risk. As for inflation, when it increases the SELIC/CDI rates tend to rise wit…

> I live in Brazil, so if the government defaults, every other investment I could have made here would also crash, and the local economy with them. Wouldn't that be a good reason to invest some money abroad? > And, actually, the high interest rate is set by the government, as a way to control the inflation But surely that's the interest rate that their central bank charges to the banks (which influences the interest…

> Wouldn't that be a good reason to invest some money abroad?

Yes, and I intend to do that someday. It's not trivial to do, however, while investing in the boring funds I mentioned is extremely easy for anyone with a bank account, and investing in government bonds is as easy as investing in stock. In particular, for both the funds and government bonds the tax is paid automatically, while if you invest abroad, you have to do the calculations yourself, and from what I've read they are not as simple. Not to mention the extra cost and risk of opening an account outside your country; for instance, the Brazilian customer protection laws won't apply to an account outside the country, for obvious reasons. All in all, it's a lot more research to do, with the extra risk of investing outside your home jurisdiction, for a much smaller return, and the only benefit being reducing your exposition to your own government - one I'll be always exposed to, since I live here (it could easily impose taxes on capital held abroad, for instance).

> But surely that's the interest rate that their central bank charges to the banks (which influences the interest rates banks pay/charge for savings/loans with them), not the interest rate that they are paying on their own government bonds? I'm not an expert, but I'm pretty sure those are two very different things.

It's complicated, but basically the government sets the SELIC rate target, and buys/sells government bonds so the SELIC rate moves towards that target. The SELIC rate itself is the interest rate banks pay each other for a one-day loan with government bonds as the guarantee. Finally, one of the government bonds (the LFT) pays the principal ajusted by the SELIC rate at its term. There is also the pre-fixed government bonds (the LTN), which pays a fixed value but is bought for less, the inflation-indexed NTN-B, which I already mentioned, and a few others.

As for why increasing the interest rate helps control the inflation, that's one thing I still don't quite understand. I just know that the government does increase the interest rate when the inflation gets above the target.

Re: Ask HN: What was your best passive income in 2016?

#140

Post by dirtyaura »

thinkloop wrote: post #129
sanswork wrote: post #39

Earlier quoted context omitted.

I'm going to assume from your reply that you've just not heard the term before but passive income refers to income from something where you do the work up front and it continues to pay down the road. A book is a perfect example of that.

A new book is not a perfect example of that, it's a shitload of work - very likely more work per dollar earned than a day job. Passive income is related to using capital rather than effort to generate money. If the IP of the book was passed down to his kids and they continued to make money off it, or enough money was made from it to surpass a regular working wage for the hours spent, maybe then it becomes "passive".…

You are correct that it is not passive income in traditional sense, but in HN, "the passive income" has come to mean something that generates automatic revenue after the initial work without requiring significant maintenance/upkeep work.

The prime example of passive income used here is patio11's Bingo Card Creator.

One also could say that in traditional investing, the upfront work is the research work to find right index funds or buying property in real estate investing. They might be less work than writing a book, but revenues e.g. from passive index fund investing are also significantly less than from writing a book, if your starting capital is small.

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