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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?

#171

Post by thinkloop »

dirtyaura wrote: post #140
thinkloop wrote: post #129

Earlier quoted context omitted.

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 i…

> 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

This is the key point. In absolutes there is no such thing as passive income. Anything will take at least 1s of effort, and $0.001 of capital. The spirit of the term, is income that is heavily skewed towards being generated from assets rather than effort.

A new book is the edge case. While making money off IP is generally the perfect example of passive income. Quitting a job to become an author, is not. There is an implied lack of effort and cost in the question. Additionally, and importantly, there needs to be a sense of "free" in there.

The prototypical case:

- [bust your ass at work] >> [get evened out with paycheck] >> ["free!" passive income from savings]

New book case:

- [bust your ass writing] >> [nothing, world still owes you] >> ["free?" passive income from book IP]

Until the "nothing" gets filled in with the equivalent of a salaried wage, I'm not a fan of calling it "passive income".

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

#172

Post by antr »

PaulRobinson wrote: post #72
antr wrote: 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.

You don't say where you are based, but you are going to get a shock if you think interest rates are going to stay on the floor. If you can get a genuine 25-year fixed rate, great, but you need to tread carefully here. Brexit, Trump, EU sentiment, China trying to deal with their own problems, they're all pointing to the same way: devalued currencies. Where they start, rising interest start to follow. I'd also be wary…

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 are playing. I could go into more detail, 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?

#173

Post by iSloth »

velcro wrote: post #93
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…

Any tips for something solid vanguard-like in the EU?

I get vanguard in the Uk via HL, some funds are on there and the fees are not too bad for the most part.

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

#175

Post by ownagefool »

EngineerBetter wrote: post #152
velcro wrote: post #93

Earlier quoted context omitted.

Any tips for something solid vanguard-like in the EU?

I use Nutmeg, had a return of 7% over two years, and I've also just opened an account with MoneyFarm.

Nutmeg has a really nice looking website and is heavily promoted, but I'm not really sure it's a great recommendation as the associated fees are higher than competitors.

Is there a value add that I'm missing?

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

#176

Post by mFixman »

aninhumer wrote: post #90
nkkollaw wrote: post #86

Earlier quoted context omitted.

What are the returns, in percentage?

Vanguard is index funds, so the returns are as good (or bad) as the market.

Wouldn't it be a better idea to invest in bonds or more stable sources of investment for the next few years until we can make sure of the impact of Brexit-Trump? I wouldn't be surprised if AAPL and other giant third sector companies fall in value right now.

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

#177

Post by lorenzhs »

azatris wrote: post #159
forgetsusername wrote: post #143

Earlier quoted context omitted.

> Do I have any rational expectations to beat inflation by having well diversified index funds? You should get inflation + some economic growth + risk premium for holding equity.

How confident can I be of this? Why are banks struggling to get even 2% return on their investment if I can just go on and get 7% on average?

There's no guarantee at all. In a really bad year (2008?) you might get -50% or worse. Then you might get some really nice returns in the years after (or not!). If you average over several decades, historically, the returns have been around 7 or 8 per cent per year, but the standard deviation is enormous. Just look at a long-term chart of e.g. the S&P 500 at https://finance.yahoo.com/chart/%5EGSPC - click "Max" and "Settings" -> "Logarithmic" (you'll want a logarithmic axis so that equal percent changes are equal distance on the plot). You'll see that on average it went up over the decades, but between June '07 and February '09, it lost over 50%, and tripled since then.

I encourage you to read up on this, but someone else with more knowledge should recommend some books.

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

#178

Post by FrancoDiaz »

threeseed wrote: post #91
lowpro wrote: post #75

Earlier quoted context omitted.

This isn't necessarily true. The US dollar is actually increasing in value as people want their money to be safe. If Trump does bring back American jobs, meaning less jobs in Asia, the dollar buy will continue, depressing Asia and strengthening the US for now. But you're right, the OP definitely needs to tread lightly with property and the contracts. The devil is always in the details.

The unemployment rate in the US is 4.9% which is basically full employment. Now sure there are a number of people who don't report and those who wish to work more. But I don't think it's going to be easy to get those people back into work. Most are either in industries that are disappearing due to automation. Or they lack the skills/training to re-educate themselves. And without tariffs (which will impact exports) th…

4.9% isn't even close to being the real unemployment rate.

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

#179

Post by rndstr »

therealjohn wrote: post #111
ABS wrote: post #70

Earlier quoted context omitted.

Vincent Dignan, one of the worst twitter spammer I've ever blocked (more than once since he likes/liked to ignore complaints, open a new account and do it again...to the same people!). If spamming all of twitter in alphabetical order is an example of the growth hacks.... I see the account he used to do most of the spamming has been suspended by Twitter now https://twitter.com/vdignan

Would you not spam Twitter if you were in debt and could make 11k/mo? I agree it's lame but gotta pay the bills :)

I know that I wouldn't. It's called moral compass and knowing how it would make the internet a shittier place the more people it would do.

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

#180

Post by joemanaco »

I'm making between $3'000 and $10'000 Dollars with native apps/games and html5 games. I made much much more a few years ago but app store revenue is decreasing each month and all my latest apps made me nearly nothing. (My portfolio: http://intermediaware.com).
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