Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The "Passive Income" trap ate a generation of entrepreneurs

joanwestenberg.com

Post reply on HN
Print view View original

211–220 of 300 posts

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

#211

Post by pas »

_nivlac_ wrote: post #139

Great read. Didn't realise how widespread this was, and I know someone who is stuck in this system. How would you approach someone to help them out of it? Don't think I can just throw them this article and say "you're wrong".

the obvious problem with any such scheme is that things are already priced in.

if it would be so easy to build personal passive income businesses hedge funds would be going around recruiting people and funding them. or the government. or the Effrctive Altruist.

but most small business are bad, inefficient, hard to scale them, etc.

(that doesn't mean there are no way to make money this way, but economically those boil down to bets. sure, sure, the aforementioned fancy investment funds also do bets, usually more sophisticated ones, and who doesn't, right? unless you are actively building a bunker somewhere around the Darién gap and recruiting people to your doomsday cult you are betting on the global economy chugging along.

but! eventually one has to price in risks-weighted return, and usually "passive income" is pretty poor compared to a boring job that pays really well.)

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

#212

Post by atoav »

My small brother is part of that hype. At his age I had a few lucrative freelance jobs under my belt, but he is oddly fixated at getting money without putting in anything that could be specified as work. I did what I loved doing and got paid for it, for him there is nothing he loves doing that he could earn money with.

I now work in high level education in one of the top universities in that field in Europe and so I am in touch with many of his generational peers. Sadly I can't help but recognize this a significant trend, within some students (luckily a minority) thst has emerged in the past 5 years. As if they want to do the thing without actually doing the thing. Like a musician who wants to be a musician, but despises spending time on playing or rehearsing actual music.

I am not entirely sure what it is all about, but I could imagine both the internet and a certain US president has shaped the idea that appearance is the only thing that matters, while substance is for losers and suckers.

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

#213

Post by Hendrikto »

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…

> 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.

> I suspect this is largely sampling bias.

FTFY.

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

#214

Post by wolvesechoes »

parineum wrote: post #176
jldugger wrote: post #167

Earlier quoted context omitted.

> 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.

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

To refute assertion you need to claim negation of that assertion, which is assertion in itself, as every negation can be rewritten to become affirmation, and vice versa.

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

#215

Post by wolvesechoes »

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.

Stop telling people this bullshit.

It is good to encourage people to save money and invest them, but 8 out of 10 people out there don't earn enough to gather so much capital to live off it.

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

#216

Post by naryJane »

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…

While I agree with the sentiment, I need to point out your numbers are exaggerated. There are calculators available on these healthcare marketplaces. The calculator for my state shows I would owe less than $130/mo unless I earned above a particular amount ($36k IIRC). The next “bracket” would have me paying around $240/mo up to around $90k earnings IIRC.

If you were earning above six figures then your numbers may be correct but let’s be honest and not dissuade folks from doing their own research. Everyone’s goals are different.

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

#218

Post by dailymorn »

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…

Yes, passive income businesses didn't fail because operators stopped caring. They failed because the markets were structurally broken.

Dropshipping, affiliate SEO, print-on-demand... these face the same margin compression regardless of how engaged you are. Ad cost inflation, platform saturation, algorithmic displacement, etc... it doesn't matter whether the operator is engaged or not.

Caring's a moat only where differentiation is possible. In commoditized markets, it doesn't move the needle.

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

#219

Post by dailymorn »

dailymorn wrote: post #218
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…

Yes, passive income businesses didn't fail because operators stopped caring. They failed because the markets were structurally broken. Dropshipping, affiliate SEO, print-on-demand... these face the same margin compression regardless of how engaged you are. Ad cost inflation, platform saturation, algorithmic displacement, etc... it doesn't matter whether the operator is engaged or not. Caring's a moat only where diffe…

[dead]
Post reply on HN