The "Passive Income" trap ate a generation of entrepreneurs • Hacker News Board

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

#171

Post by phil21 » Fri, Apr 17, 2026, 4:36 AM UTC

icedchai wrote: post #155

sfRattan wrote: post #69

Earlier quoted context omitted.

The way it shakes out is that there's no widely accessible way of escaping actual, ongoing work, which is what unmotivated people actually hear behind the words "passive income." Whatever the industry/vertical/field, a tiny number will hit it so big that they can actually stop working. Everyone else can bolster their income with passive sources, but that passive income ultimately depends on continuing new stimulus in…

The way to escape is through consistent, long term investing in the stock market. You get a regular job and live below your means, investing the difference. Buy and hold. Invest regularly. Not day trading, long term. The problem is most people don’t have the patience, the right temperament, to do this.

This is not what people mean by passive income. Yeah, if you have a few million dollars of capital already you can easily just toss it in the market and collect 4% every year indefinitely. Pretty much one of the only truly passive income streams there is.

The problem is how long and what you have to do to get that 3-5 million number. No one who is drawn to the “passive income” hustle is thinking “work a normal job for 30 years, live under my means, and invest everything I can”. They want to get much more immediate results so they can enjoy life on easy street because grinding it out for so long sounds extremely depressing.

What you describe is a retirement plan, not a passive income lifestyle. Kinda the opposite of escaping.

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

#172

Post by atomicfiredoll » Fri, Apr 17, 2026, 4:45 AM UTC

lotsofpulp wrote: post #164

atomicfiredoll wrote: post #159

Earlier quoted context omitted.

My current read of the situation is similar. If you go to other countries, there are slews of small shops, even in run down areas. On top of that, in places within Asia, the malls are also open and full of regional chains. It also feels like there's such a wider variety of certain goods available, because the little bakeries are doing their own thing, while in the U.S. seemingly everybody is eating Costco danishes. "…

>Healthcare is tied to employment, so people are less free to try and start something other than "on the side." It has long been easy for anyone to buy health insurance without an employer in the US. If you are self employed, you can even pay for it with pre tax income. The problem is it costs $500 to $2,500 per month per person plus $10,000 out of pocket maximum per year, which means you need a high income to be abl…

I think we're saying the same thing. Most people don't necessarily [functionally] have the option (or at least don't think they do, there are sometimes ways through.)

But, public hospitals with low or no cost care exist in some of these places, and from my observation, I do currently think it's a contributing factor to why small businesses are more likely to exist. But, it's only one knob to turn.

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

#173

Post by littlexsparkee » Fri, Apr 17, 2026, 4:53 AM UTC

mathgladiator wrote: post #86

dlcarrier wrote: post #67

Earlier quoted context omitted.

I went the lean FIRE route, and now work on whatever open-source projects I feel like, plus local in-person volunteer activities. It's a much better quality of life, even though my job had been enjoyable, the extra scheduling flexibility is really nice.

Me too. It has been great. Im working on projects that are fundable, and now I have joy from it (did go through a lonely pity party phase).

Same - I wasn't sure where I'd stop (always been a minimalist anyways, savings rate above 2/3) but ran into a health issue so seeing what the future holds: taking another crack at the 'career' or maybe something more low key that aligns with my passions or a side project. I just want more time for learning, everything else feels like a distraction.

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

#174

Post by hn_throwaway_99 » Fri, Apr 17, 2026, 4:56 AM UTC

VirusNewbie wrote: post #131

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…

Is it possible this has things backwards? When I was in high school 25 years ago, unless you got lucky with an IPO, tech didn't pay all that well. (I worked in software while I was in high school, so I know some of this first hand). It was office space. It didn't matter how smart you were, if you didn't go into management, or join Apple/Microsoft at just the right time, you weren't going to live a rich lifestyle. Not…

I was a software engineer 25 years ago, and tech paid very well - and in a non-Bay area location, and I'm only counting my cash comp as my stock options ended up being worthless (dot com bust and all). I made more my second year out of college than a family member's first year as a physician post-residency.

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

#175

Post by xboxnolifes » Fri, Apr 17, 2026, 5:00 AM UTC

bawolff wrote: post #130

jandrese wrote: post #111

Earlier quoted context omitted.

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.

Sure, things like phones are much more feature packed and only slightly more expensive, so they get to be inflation adjusted as being significantly below inflation.

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

#176

Post by parineum » Fri, Apr 17, 2026, 5:06 AM UTC

jldugger wrote: post #167

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…

> 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. Isn't this also sampling bias?

It for sure is but it's being ised to refute an affirmative assertion, not make it's own assertion.

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

#177

Post by phyzix5761 » Fri, Apr 17, 2026, 5:07 AM UTC

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…

Please keep up this mentality because it means less competition for the rest of us.

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

#178

Post by robocat » Fri, Apr 17, 2026, 5:16 AM UTC

paulddraper wrote: post #36

zem wrote: post #28

Earlier quoted context omitted.

my favourite bit was 8 Free to do what? Sit on a beach, apparently. Every single one of these people wanted to sit on a beach. I've never understood this. Have they been to a beach? There's sand. It gets everywhere. You can sit there for maybe three hours before you want to do literally anything else. 8 I laughed out loud when I read it, because it's so true.

I love the beach. Living near the beach is nice. You can sit on it, walk on it, swim on it, surf on it, run on it, fish on it. Better than a cement sidewalk, IMO.

A home on the beach is seen as an expensive status symbol.

House maintenance costs in sea air cost at least double. Appliances and aircon rusts and corrodes. Everything needs regular painting.

Cars rust out. I buy second hand shitters and replace them every ~5 years. Certainly not worthwhile owning anything collectable or precious.

If you want a garden, be prepared to spend twice the time and money and, perhaps plants and trees still struggle or die.

I live in New Brighton in Christchurch, mostly because it is cheap housing (for no reason I can understand). Plus the coastal wind from the sea avoids hayfever (town is irritating for me).

It has a good community. Many people that choose a beach vibe are relaxed and friendly.

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

#179

Post by hackable_sand » Fri, Apr 17, 2026, 5:19 AM UTC

icedchai wrote: post #155

sfRattan wrote: post #69

Earlier quoted context omitted.

The way it shakes out is that there's no widely accessible way of escaping actual, ongoing work, which is what unmotivated people actually hear behind the words "passive income." Whatever the industry/vertical/field, a tiny number will hit it so big that they can actually stop working. Everyone else can bolster their income with passive sources, but that passive income ultimately depends on continuing new stimulus in…

The way to escape is through consistent, long term investing in the stock market. You get a regular job and live below your means, investing the difference. Buy and hold. Invest regularly. Not day trading, long term. The problem is most people don’t have the patience, the right temperament, to do this.

Lol what

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

#180

Post by hn_throwaway_99 » Fri, Apr 17, 2026, 5:20 AM UTC

hunter-gatherer wrote: post #118

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…

Didn't feel like a misdiagnosis to me. My spouse around 2017 was one of those that got sucked into a course to earn income with an Amazon store. As I read the article basically every point resonated with my experience. The dog walking business example was also appropriate in my mind. My spouse fortunately broke even, minus time, on her attempt with drop shipping garbage nobody really needs. Now she makes decent money…

I'm not in any way doubting that lots of people were swept up in Amazon drop shipping scams. My argument is that this was not some sort of unique "passive income trap that ate a generation of entrepreneurs".

Years before your spouse enrolled in that Amazon course, people were spending tens of thousands of dollars on Trump University. Many years before that I had a friend that got sucked into the Equinox International MLM scam. Point being those types of promises of easy money after paying for a course, or outright scams, are not something new or unique.