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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

#201

Post by littlexsparkee »

madaxe_again wrote: post #193
littlexsparkee wrote: post #186

Earlier quoted context omitted.

You don't need millions - if things go modestly well and you have a high savings rate, you can get out in 5-10 and draw enough to cover modest means. I do agree that people eying passive income maybe have a different patience / willingness to sacrifice & self-teach threshold but the calculus of grinding for a few years to escape has its adherents.

Yup. This was my approach. Left my business a decade ago with low six figures cash in my pocket. It would have lasted about 18 months at my existing burn rate. So I moved to a cabin in the woods in a country with a low cost of living, and stuck pretty much all of it in the markets. Had I not done that, I would have had to go back to work - instead I lived a modest life (€500/mo, max) off the income from putting my ap…

Did you do a ton of research to make those picks? These days I just do broad market ETFs, don't trust myself to beat the market.

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

#202

Post by jemmyw »

encoderer wrote: post #142
jimbokun wrote: post #132

Earlier quoted context omitted.

I note neither your post or the one you replied to contain any quantitative data about how many profitable solo businesses there are.

I know over a dozen 1-2 person SaaS, not including my own. Some of them have hired some help now but they are still more on the "lifestyle business" side. They are in many different spaces, and founders from around the world. I am not a big networker, but this is my niche and it's big enough that I just know a slice.

I don't know any. I know a couple of people who had ideas that became bigger startups, but only 1 who was a friend rather than via networking. And I know a few people who did try the small saas or other small software based business but they all failed and now have jobs.

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

#203

Post by seibelj »

TuringNYC wrote: post #161
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…

So true. The latest rage on IG is "this guy built a trading system on OpenClaw and is now making 10k, comment MONEY and i'll DM you the recipe." No indy hedgefund algotrader gives away their golden goose, that would crowed out the trade.

[dead]

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

#204

Post by madaxe_again »

littlexsparkee wrote: post #201
madaxe_again wrote: post #193

Earlier quoted context omitted.

Yup. This was my approach. Left my business a decade ago with low six figures cash in my pocket. It would have lasted about 18 months at my existing burn rate. So I moved to a cabin in the woods in a country with a low cost of living, and stuck pretty much all of it in the markets. Had I not done that, I would have had to go back to work - instead I lived a modest life (€500/mo, max) off the income from putting my ap…

Did you do a ton of research to make those picks? These days I just do broad market ETFs, don't trust myself to beat the market.

Nope. I just think about the probable shape of the future, and who benefits.

I stick with the fields I know and understand - tech, engineering, sciences - don’t go for long bets so much as “if this relatively predictable set of circumstances arises, who will inevitably benefit”.

For example, in 2017 I was keeping abreast with ML research, and realised that within a decade this stuff was going to be huge - so I bought Nvidia and their supply chain and sat on it. Also Tesla as I figured as if I saw them as an adjacent incumbent beneficiary of an AI boom, then others would, too.

I’ve followed that chain of logic through - caught the nuclear renaissance in its entirety, as well as predictable resource squeezes.

So - that’s just one of my trees of bets - but my whole thesis is “predict a future, model out what that looks like, place bets accordingly”.

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

#205

Post by mamonster »

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.

"It is inconceivable that anyone will divulge a truly effective get-rich scheme for the price of a book. There is ample opportunity to use wealth in this world, and neither I nor my friends, nor anyone else I have ever met, has so much of it that they are interested in putting themselves at a disadvantage by sharing their secrets."

Victor Niederhoffer, The Education of a Speculator

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

#206

Post by Nasrudith »

Ekaros wrote: post #187
icedchai wrote: post #158

Earlier quoted context omitted.

I’d argue that unless you’re using a property manager, rental property isn’t really passive, either. Do you want that call at 3 am to fix a flood?

At that point I wonder why not just invest in REIT. And then look at how those compare to other possible companies... And then figure out nothing makes much sense.

Have you seen the taxes for REITs? They are complicated and often taxed as ordinary income instead of capital gains. I have heard recommendations to only use them in Roth IRAs.

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

#207

Post by thih9 »

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.

I’ve seen people bragging about making a lot of money selling a course about selling courses. That somehow felt honest.

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

#208

Post by pas »

SudheerTammini wrote: post #135

Very well written article, it gets into the core of the problem and explains the hidden patterns. I want to articulate few other variations of this just as a reference. - The productivity gang, if everyone is so productive and so well organised then what are the outcomes of this productivity? - Self help - if self help books are solving real problems then where is the need to buy multiple self help books? - The cours…

a very entertaining, highly-recommended, and intense gonzo video essay on the topic of the courses scams

https://m.youtube.com/watch?v=biYciU1uiUw

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

#209

Post by rozumem »

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…

> It's just simply much harder as a small/smaller business to make money and compete with the big boys.

You're conflating two different things. Thanks to software, it's easier today than it's ever been to make money as a small business / solopreneur. It's also harder to compete with the big boys, possibly for the same reason and due to economies of scale.

That's why I don't bother entering the same markets the big boys are in. There are plenty of niche markets which they don't bother touching where a small business can thrive.

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

#210

Post by pas »

Marsymars wrote: post #98
eek2121 wrote: post #66

As someone who had actual passive income (small amount, a few hundred USD/mo) prior to my life being ruined by a medical accident: I agree (I killed my site because it was the right thing to do, I could not generate content for it because I couldn't function, so I did not want to waste the time/money of my users). One thing the author does NOT see, however, is that the local folks doing all the hard work like mowing…

> One thing the author does NOT see, however, is that the local folks doing all the hard work like mowing lawns, building furniture, etc. are in absolute panic over "AI" because their niche little lawn mowing/car washing/house cleaning business has been determined to be irrelevant by ChatGPT, etc. How does what ChatGPT thinks about lawnmowing matter? Like, specifically, who's going to be mowing the lawns if it's not…

the robotaxi-ification of any and all movable capital goods is coming... ([insert intense Helms deep music!])

so some guy with a robot, Elon Mows, of course initially it will be just kids from India remote controlling the robots, but ... the AI is coming!

(okay, it's likely about leads and advertising, the negative sum game, and OpenAI wants to have an ad-supported free tier)

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