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Ask HN: What was your best passive income in 2020?

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Re: Ask HN: What was your best passive income in 2020?

#51
post #4

Earlier quoted context omitted.

This is not passive income. This is asset appreciation. Dividends or rent collection qualify as passive income.

Can you explain why you differentiate the two (price changes vs dividends)? AFAIU it’s really just that you have to instruct one to be sold to realize it and the other just shows up in your account, but the overall returns, tax implications, and such are basically the same.

The most important reason: PAPER PROFITS ARE NOT REAL PROFITS.

More technical reasons follow.

The risk profile is very different. Rents, dividends, and interest payments all have some notion of a guaranteed payment. Your risk is primarily whether your counter party will be able to honor that agreement. This is why bond investing is often called "fixed income" because you know ahead of time how much money you'll make.

Asset appreciation has immense market risk. You need to find a buyer willing to pay more for what you paid for it. In the case of companies the economic risk are higher too: if the companies cashflows dwindle or debt increases the shares are fundamentally worth less.

This is why there are often tax distinctions between guaranteed income streams and capital investments: in theory, a government wants to encourage investment in risk and discourage printing guaranteed monthly checks. This does create a regulatory arbitrage, however, where companies can buy fixed amounts of their own stocks to guarantee some amount of appreciation in lieu of a dividend.

Re: Ask HN: What was your best passive income in 2020?

#52
post #11

Twitch, £2k this month. I'm planning to quit my job actually

How do you make money on twitch? Programming streams?

Gaming most of the time but some times I do some personal talks/Q&A. It took me over 2 years to get here, so it's not easy.

Re: Ask HN: What was your best passive income in 2020?

#54
Meme stocks. Was up 100% for the year but settled down to 45%. Will continue memeing until the end of the year. Meme profits got rolled into more legit stocks (usually just to hold profits with a possibility of some upside until I can buy a good dip), but yeah, mostly stuck to trends and bets, no real investing.

Also lost money, but I memed my way out of it somehow.

Re: Ask HN: What was your best passive income in 2020?

#55
post #29

I have made a few iOS apps (Cone[0] and Unwind[1]) which generate enough to pay my bills. [0]: https://cone.app [1]: https://unwind.to

Curious to know what kind of marketing efforts you took for these if any? Any marketing budget to speak of?

They look like really well done apps, congrats on (kind of) exiting the rat race!

Re: Ask HN: What was your best passive income in 2020?

#56
post #29

I have made a few iOS apps (Cone[0] and Unwind[1]) which generate enough to pay my bills. [0]: https://cone.app [1]: https://unwind.to

Curious to know what kind of marketing efforts you took for these if any? Any marketing budget to speak of? They look like really well done apps, congrats on (kind of) exiting the rat race!

Cone was on Apple's Developer Spotlight recently[1,2], and was covered in other news subsequently[3]. Interesting to read the original Show HN from 2017[4].

[1]: https://developer.apple.com/news/?id=1al00dn0

[2]: https://apps.apple.com/in/story/id1556285704

[3]: https://thehardcopy.co/the-indian-app-featured-at-apples-wwd...

[4]: https://news.ycombinator.com/item?id=14254357

Re: Ask HN: What was your best passive income in 2020?

#57
post #31

Earlier quoted context omitted.

Can you explain why you differentiate the two (price changes vs dividends)? AFAIU it’s really just that you have to instruct one to be sold to realize it and the other just shows up in your account, but the overall returns, tax implications, and such are basically the same.

Not sure what jurisdiction you're in, but the tax implications are not 'basically the same' here in the UK. Capital gains are taxed at 20% and can be offset against personal losses, whereas dividend income is typically taxed at 32.5 - 38%, and that's after the company issuing the dividend already paid corporation tax of 19% on their end.

The US. Where I believe cap gains taxes apply to both cap gains and dividends. Which honestly makes sense me — either you “cash out” individually or the company does it for you (to pay the dividend).

From what you say, dividends seem like a negative thing taxes-wise, so why would any company opt pay them out? I’m sure there’s some intricacy there.

Re: Ask HN: What was your best passive income in 2020?

#59
post #31

Earlier quoted context omitted.

Can you explain why you differentiate the two (price changes vs dividends)? AFAIU it’s really just that you have to instruct one to be sold to realize it and the other just shows up in your account, but the overall returns, tax implications, and such are basically the same.

Not sure what jurisdiction you're in, but the tax implications are not 'basically the same' here in the UK. Capital gains are taxed at 20% and can be offset against personal losses, whereas dividend income is typically taxed at 32.5 - 38%, and that's after the company issuing the dividend already paid corporation tax of 19% on their end.

According to this source [0], the first £2000 of dividend income per year are tax free. So depending on how much dividend income you have, the rates could be higher or lower than in the US (who has no such exception, but lower rates on dividends for stocks held over a year).

[0] https://www.gov.uk/tax-on-dividends

Re: Ask HN: What was your best passive income in 2020?

#60
post #45

Selling few delivery plugins for woocommerce/prestashop was a really nice idea at the time which did not really work that much before pandemic (for ex https://codecanyon.net/item/stuart-for-woocommerce/25673890 )

Do you mean there’s an increase in sales for the plugins after the pandemic?
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