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

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

#231

Post by bluGill » Fri, Apr 17, 2026, 1:04 PM UTC

ghaff wrote: post #75

bluGill wrote: post #59

Earlier quoted context omitted.

now where do you get that pile to invest? I have a pile invested - but I'm close to retirement and it took me many years to save it up.

By working and investing. More successfully at some points than others. But you’re totally right that different people are better set up and more or less inclined to move on from a job than others.

The larger message is young people cannot get passive income in a short time. Sure there are a few born rich, and a tiny handful who by luck and skill (both are needed) get rich quick. However for the vast majority passive income is a long slog of saving a little here and there. (there is a third option - really lower your standard of living so you need almost nothing to live - get a good job but live in a tent city with the poor, cooking on a camp stove - everything you own fits in a backpack). The idea that you can in a few years get enough invested to live on a beach for the rest of your life is a fantasy that sells books but doesn't otherwise exist.

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

#232

Post by icedchai » Fri, Apr 17, 2026, 1:27 PM UTC

phil21 wrote: post #171

icedchai wrote: post #155

Earlier quoted context omitted.

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 fo…

It may be "not what they mean", but they're wrong. No business that actually adds value is ever truly passive.

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

#233

Post by faanghacker » Fri, Apr 17, 2026, 1:33 PM UTC

icedchai wrote: post #229

wolvesechoes wrote: post #215

Earlier quoted context omitted.

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.

In general, you are right, but many people on this site do earn enough. Engineers have some of the highest paying "normal person" jobs out there. If we can't save and invest for the future, who can?

Agreed. And if more high income professionals pursued this path, it would tip the balance of power in the workforce away from employers. That's a win for all except those at the top.

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

#234

Post by pingou » Fri, Apr 17, 2026, 1:39 PM UTC

ryandrake wrote: post #24

georgemcbay wrote: post #5

"Passive Income trap" wantrepreneurs haven't really gone away, they have just shifted to crypto rug pull culture and now prediction markets and app-based gambling. They'll keep existing as long as the root cause that creates them (massive wealth inequality in general and the growing delta between productivity and wages) exists, so probably until our financial systems fully collapse in about 2032.

These people migrate like geese through the exact same stuff. I knew a couple of people way early on into affiliate marketing, then they all migrated to LeadGen, then to Drop Shipping, then online poker, then crypto, then NFTs, and now of course, they're all doing AI gigs. It's the exact same group of people migrating like birds from scheme to scheme.

What does it mean to be doing AI gigs? Because AI seems really different than drop shipping, online poker, crypto, and NFTs.

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

#235

Post by hecanjog » Fri, Apr 17, 2026, 1:42 PM UTC

paulddraper wrote: post #80

zem wrote: post #60

Earlier quoted context omitted.

I love the ocean , but I have to confess I don't care much for beaches. sand gets everywhere.

A lot of beaches happen to be near oceans.

Ours are along the river, that's nice too.

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

#236

Post by paulddraper » Fri, Apr 17, 2026, 1:48 PM 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…

The Census Bureau reports 10% of the workforce being self-employed for their main occupation. That's virtually the same as it was 20 years ago.

> I read an article recently that the number of public companies has halved compared to a few decades ago.

That's not because there are fewer companies but rather because private markets have much more capital.

OpenAI is the extreme example. If it were public, it would be the ~tenth most valuable public company in the world.

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

#237

Post by ghaff » Fri, Apr 17, 2026, 1:50 PM UTC

bluGill wrote: post #231

ghaff wrote: post #75

Earlier quoted context omitted.

By working and investing. More successfully at some points than others. But you’re totally right that different people are better set up and more or less inclined to move on from a job than others.

The larger message is young people cannot get passive income in a short time. Sure there are a few born rich, and a tiny handful who by luck and skill (both are needed) get rich quick. However for the vast majority passive income is a long slog of saving a little here and there. (there is a third option - really lower your standard of living so you need almost nothing to live - get a good job but live in a tent city…

I agree with all that. I've known a couple of people (at least one was out of investment banking--think both were) who pretty much fully retired in their forties, which of course isn't really that young. Some people hit the startup or some other lottery early on and, even if you get a million dropped on you at 25 or 30, you should probably think long and hard about whether you can really just not work any longer. Gives you a lot of breathing room but isn't really a huge pile.

Certainly, there are degrees of frugality. I could probably spend more than I do but don't have a real interest in doing so and generally avoid expensive things that might give me some incremental pleasure but prefer to arrange things so that increment is pretty small and doesn't revolve around "stuff."

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

#238

Post by lotsofpulp » Fri, Apr 17, 2026, 1:54 PM UTC

circumcised wrote: post #224

lotsofpulp wrote: post #164

Earlier quoted context omitted.

>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…

That's a naive statement. What do you think happens when you get sick as a self employed person? Do you think a health insurance company pays claims? Self-employed health insurance = Orwell's 1984 At least when you work for a corporation you don't have to see the truly ugly side of health insurance claim denial. Many people don't see this until their 50s/60s when they lose employer health insurance.

That’s a naive statement.

> Do you think a health insurance company pays claims?

Yes, see exhibit 2:

https://www.oliverwyman.com/our-expertise/insights/2025/may/...

> At least when you work for a corporation you don't have to see the truly ugly side of health insurance claim denial.

I cannot tell if I am being trolled. The only logical conclusion to this statement is you think “corporations” instruct the managed care organizations they pay to pay all claims. To which…lol.

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

#239

Post by cryptopian » Fri, Apr 17, 2026, 2:28 PM UTC

pas wrote: post #208

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

A timely recommendation, as the Mikkelsens were recently ordered to pay $1.5 million by the FTC for misleading customers

https://www.ftc.gov/news-events/news/press-releases/2026/04/...

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

#240

Post by mmmmmbop » Fri, Apr 17, 2026, 2:29 PM UTC

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…

Way to bury the lede. Being able to average 80%/yr returns takes talent and skill and is a type of work. The type of work, by the way, that is rewarded with millions at finance companies in NYC, or even more if you launch your own trading shop.