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The "Passive Income" trap ate a generation of entrepreneurs

joanwestenberg.com

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Re: The "Passive Income" trap ate a generation of entrepreneurs

#121

Post by yieldcrv »

I'm partially familiar with this ideology that the author refers to, but I think it's important to separate it from actual passive income:

dividends and treasury bonds give passive earnings, you need capital. the "passive income" savants did not and do not have capital.

case in point: it should not be noteworthy that the author's friend was "$800 in the hole", it should be such a rounding error that it couldn't be any of Joan's concern. And honestly, it probably isn't and Joan put an obsessive amount of weight into an off-comment.

$800,000 in treasuries, on the other hand, now you have passive income - only ~$37,000/yr - but enough to live like a royalty in South East Asia for the next 30 years, passively, followed by getting all $800,000 back.

Class inequality aside, throwing darts at the wall and seeing what sticks isn't a bad business strategy, and you really don't need to be passionate about any particular business idea to collect income.

I hope Joan's friends found something that worked from them. For me its just stay employed so I can accumulate capital for the side projects. Sometimes side projects become bigger than the employment, but my businesses are just expeditions, not forever projects.

I've never watched dropshipping influencers but I did sell some of my own electronics on eBay and noticed some opportunities in the process. Sometimes I put up identical listings as someone else's at a wildly inflated price, and people would buy from me because it seemed more serious. I would buy from the cheaper ad and put my own buyer's address in the shipping destination. Never seeing the product. Not scalable as I think its against the one of the terms, but you can do it between marketplaces too.

Re: The "Passive Income" trap ate a generation of entrepreneurs

#122

Post by zaptheimpaler »

hn_throwaway_99 wrote: post #74

This article really felt like a misdiagnosis to me. Sure, a lot of these people were just buying hype from these "get rich from drop shipping!" influencers, just like a million other suckers who got dollar signs in their eyes with real estate schemes, pyramid sale schemes, yada yada, a tale as old as time. I don't think this "passive income" trap is really anything new, and I don't think it was some unique thing that…

Yeah, it feels like the author is blaming his personal bugbear but entrepreneurship and independent businesses are facing systemic issues of massive concentration of market power and zero antritrust enforcement.

Re: The "Passive Income" trap ate a generation of entrepreneurs

#123

Post by dsr_ »

mtlynch wrote: post #101
hn_throwaway_99 wrote: post #74

This article really felt like a misdiagnosis to me. Sure, a lot of these people were just buying hype from these "get rich from drop shipping!" influencers, just like a million other suckers who got dollar signs in their eyes with real estate schemes, pyramid sale schemes, yada yada, a tale as old as time. I don't think this "passive income" trap is really anything new, and I don't think it was some unique thing that…

> You rarely see anything more than a couple hundred bucks a month. There are notable exceptions, but unfortunately a lot of those notable exceptions are scammy, spammy business models. I suspect this is largely sampling bias. I host meetups for indie founders, and several attendees earn their living through solo businesses. When I go to conferences like Microconf, I meet lots more. The problem with measuring financi…

> successful founders are busier

I thought it was supposed to be "passive".

Re: The "Passive Income" trap ate a generation of entrepreneurs

#124

Post by stockresearcher »

I’ve met a lot of “passive income” folks over the last few years, and all of them sounded like their businesses were very actively managed. Never made much sense to me.

I do disagree that all sub$100 blenders are the same, though. But still! The main reason restaurants use Vitamix blenders is that they are so much safer when blending burning hot stuff, like soups. When you turn off a normal blender, you’re fairly likely to create an air bubble that pops a little later, sending drops of very hot liquid into the face/eyes of the operator. A Vitamix, if you turn it off correctly, does not create the bubble. This is irrelevant for most home users, including me. So I don’t have one.

Re: The "Passive Income" trap ate a generation of entrepreneurs

#125

Post by dpb001 »

nobleach wrote: post #17
secretsatan wrote: post #6

Met a guy that ran some dropshipping thing in a bar once, once he found out i was a programmer he kept on trying to get me to fix his website for free because it was easy, would not take no for an answer. I just kept upping how much money i would charge him till i got sick of it and left. I knew a few guys like that in crypto too, before crypto came along and they got into that, this guy told me he’d written a twitte…

"My nephew makes websites, and he's 14... I could just have him do it" - Every client of mine during my contracting days. It took me way too long to reply with, "Oh that's great news! I wasn't sure of my availability, and was certain I was going to be way too expensive. Glad you got it figured out."

I think the 14 year old nephew has been around for every iteration of technology - there are probably clients now threatening to just have their nephew vibe code the thing you're trying to spec out.

Once, when fed up with this during a discussion on a small moonlighting job I said "Yeah, kids are pretty good with this stuff these days, Tell you what - have him get started and I'll be available to give him any help he needs at 2x my rate".

Re: The "Passive Income" trap ate a generation of entrepreneurs

#126

Post by nemomarx »

brunoborges wrote: post #117
mtlynch wrote: post #101

Earlier quoted context omitted.

> You rarely see anything more than a couple hundred bucks a month. There are notable exceptions, but unfortunately a lot of those notable exceptions are scammy, spammy business models. I suspect this is largely sampling bias. I host meetups for indie founders, and several attendees earn their living through solo businesses. When I go to conferences like Microconf, I meet lots more. The problem with measuring financi…

> The more someone is making at their solo business, the less they want to blab about it and attract competitors. Exactly! And this is why every time I see someone selling a course while bragging about making a lot of money, I know for sure they are _not_ making money.

Well you never know, maybe selling the course is the profitable part?

Re: The "Passive Income" trap ate a generation of entrepreneurs

#127

Post by qzw »

datadrivenangel wrote: post #114
ryandrake wrote: post #21

Earlier quoted context omitted.

Yes, it was the exact same scheme. Rich Dad Poor Dad was basically "Buy lots of cheap, crappy houses and become a slum lord" expanded into thousands of pages of books, seminars, and self help guides.

and Kiyosaki has declared bankruptcy at least once!

There really should be a special category for business books written by people who’ve gone bankrupt. I know at least two well known examples, but there’s got to be a whole lot more.

Re: The "Passive Income" trap ate a generation of entrepreneurs

#128

Post by Aurornis »

recursivecaveat wrote: post #51

I appreciated when "passive income" was the flavor of the week because it was a good signpost for people you could ignore. In particular anybody who didn't understand that you could assign a present value to future income, or that infinite series can sum to finite values. Seriously, the prototypical example of being an author is not particularly passive income lol! A book being print-on-demand indefinitely != infinit…

> I appreciated when "passive income" was the flavor of the week because it was a good signpost for people you could ignore.

This is why I still do random sampling of Reddit, Twitter, Threads, and a few other social media sites: It’s a good way to keep up with some of the discussion trends that start spreading in online discussions.

I can pick up quickly when someone is parroting the latest info memes from Reddit or Twitter now. It’s very helpful for identifying who isn’t really thinking for themselves and will latch on to the first opinion they see on a topic.

I can’t bring myself to watch TikTok or other video shorts, though.

Re: The "Passive Income" trap ate a generation of entrepreneurs

#129

Post by ggm »

Back when I was young and motivated about being left wing instead of being old and jaded but still left wing, we called people who lived off other people's work or by profits without effort "rent seeking social parasites"

I like the sound of a "rent seeking social parasite" trap.

As the Mikado says in the eponymous Gilbert & Sullivan opera:

"something humorous, but lingering, with either boiling oil or melted lead."

That was before I became old enough (as I am now) to live off my superannuation and pension, which is also "passive income" but joy of joys, not a side gig. I'm not in denial about where my pension income comes from. It's other people's labour. That's what I'm invested in.

Re: The "Passive Income" trap ate a generation of entrepreneurs

#130

Post by bawolff »

jandrese wrote: post #111
saulpw wrote: post #94

Earlier quoted context omitted.

There are many levels between "pays for a vacation or two a year" and "billion dollars". I think most people just want to make a comfortable living (which includes eventual retirement) and not have to work themselves to the bone.

I think the bar has risen for what a comfortable life requires now. Housing costs have outpaced inflation for a couple of decades now. Health insurance has rocketed into the stratosphere, especially in states that dropped the Obamacare subsidies. Even staples like food and fuel are hard to keep up with. Lord help you if you have children and are trying to save for college. Projected costs for universities are getting…

> Housing costs have outpaced inflation

In fairness though, given inflation is the average, housing costs outpacing means something else underpaced.

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