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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?

#291
"Investment" is not income, passive or otherwise.

Income is step one. Investment of that income is step two.

A "salary" is income that is bound to time worked.

"Passive income" is income that is not bound to time worked.

The key difference between passive income vs investing, is what is being invested. With passive income like salary _time_ is the investment, not money. That's why it's income.

All the comments discussing saving and investment strategies are rather missing the point of the question.

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

#292

Earlier quoted context omitted.

I read that book this year. The entire book can be summarised as. Don't attempt to beat the market. The market cannot be beat (many examples in the book). Invest in index funds long term which is the right mix of risk/reward for most people. It does have a chart in the back which tracks your age and situation. For example as you approach retirement you should start to liquidate your funds and buy government bonds so…

Why did you choose Wealthsimple and Questrade instead of Vanguard like a lot of people on bogleheads recommend?

You can't buy directly from Vanguard in Canada. Questrade is essentially a very low cost broker (low as in free for ETFs).

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

#293
post #292

Earlier quoted context omitted.

Why did you choose Wealthsimple and Questrade instead of Vanguard like a lot of people on bogleheads recommend?

You can't buy directly from Vanguard in Canada. Questrade is essentially a very low cost broker (low as in free for ETFs).

[deleted]

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

#294
i own a decent amount of tesla stock and 2016 was a great year for lending it out.

since tesla is such a controversial company, lots of people want to own the stock (expecting it to go up) and lots of people want to short sell it (expecting it go down).

if you're a stock holder, certain places (like interactive brokers) will let you lend your stock holdings to people that want to sell it short. you earn a premium on this loan, but its basically risk-free since the brokerage bears the counter-party risk.

because short interest is so high, there was a substantial portion of 2016 where there weren't enough shares available to satisfy short sellers' demand. TSLA became classified as "hard to borrow" and borrowing premiums would be anywhere from 8% to 100+% depending on the day/demand. this is money short sellers pay on top of the cost to purchase the shares (and one more thing to bear on top of the risk of short-selling, but that's another story).

the premium is paid daily, and the brokerage usually takes a chunk of it (often half), so if you had $100k of tesla stock and the premium was 50%, you'd earn (100,000 * 50% * (1/2) / 365) = $68.50 for each day that someone borrowed your shares. the rate fluctuated daily, but this still netted me several thousand dollars of truly passive income, since i was planning to hold the stock either way. this is also a huge income stream for institutional shareholders that are sitting on millions of shares.

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

#295
post #217

I work remotely and moved into an RV to travel around North America with my wife. Started blogging about travel and working on the road at http://therecklesschoice.com and using Amazon affiliate links whenever appropriate that pull in about $50/month.

This seems not passive. If you blog 5 hours a month and make $50, you made $10 an hour.

It is if you like to blog anyways.

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

#296
post #172

Earlier quoted context omitted.

The all-in fixed rate is 2.10%, and let me repeat: fixed. Not LIBOR + spread + you need to have you savings account with us + you need to buy my home insurance, etc. I don't understand why you say "tread carefully"... when it's the bank bearing all the IRS cost. Plot any LIBOR curve, and you'll see that the bank is the one to lose here. Banks are fighting for customers, and cheap loans and mortgages is the game they…

Don't you lose if you can't find Tennant's for your property? Or do you plan to just go bankrupt if that happens?

  > but given that I have a 12 month DSRA account in place, I'm quite happy with the investment.

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

#297
post #33

In early 2016 I purchased commercial real estate, got a 25 year fixed rate mortgage, and leased it. This requires very little of my time every month, and the post-tax yield is above 5%. I couldn't be happier. I'm now considering doing this again in 2017. Hopefully interest rates will remain as low as they have been in order to lock-in an attractive mortgage.

The American dream: very little work and lots of money. Reality: others work hard and get less so rentiers can kick back.

because... I haven't worked hard and saved money?

or, like you are implying, I shouldn't have saved any money, and spent it all... fancy cars, exotic vacations, and parties. I guess I gave up one lifestyle to reach another one. We all have different priorities.

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

#300
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…

Earlier this year, at my last boring corporate job, I was trading stock trading stories with our head accountant. (Like the time my brother and I were trading stock tips about 10 years ago, when he turned me on to some up-and-coming German solar energy firm and I mentioned to him some small biotech company I had just read about. I invested a couple thousand dollars in the company my brother suggested and it was bankrupt within 24 months. My brother invested in both and the company I had mentioned -- I can't remember its name and only even vaguely remember the conversation -- has gone on to something like 50x return, easily making up for the losses from his lousy recommendation... But I digress.)

I told the accountant, who I always found watching CNBC in the break room and I suspect still dreamed of being a day-trader, that the best investment I ever made was our company's ESPP (Employee Stock Purchase Plan).

He said, "You know what? Same here."

(Standard disclaimer: max out your 401(k)/IRA contributions, first.)

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