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

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

#91

Post by faanghacker » Thu, Apr 16, 2026, 11:55 PM UTC

zem wrote: post #47

faanghacker wrote: post #4

This article has a narrow definition of passive income, limiting it to these low-barrier-to-entry schemes. Other parts of the FIRE world have emphasized being a landlord or flipping houses, for example. I personally made it happen by working a FAANG SWE job for 13 years, not getting sidetracked by the startup cult, saving and investing 70% of my after tax income, etc. And no I didn't get into crypto, but I still mana…

> those who thought it was unethical for me to place wealth building ahead of career building. that might well be the first time I've seen "career" and "ethical" conflated in that way. I've definitely seen the people who think you're a fool and possibly a sucker if you chase short term wealth over career stability, and there's definitely a veneer of unethicalness clinging to the notion of get-rich-quick, but I cannot…

Keep in mind that for me it was before the FAANG companies became the new evil tech overlords, and to some extent even before the Great Financial Crisis of 2008. Back then it was much easier for naive young college students or new grads to buy into that narrative of using our talents to make the world a better place through professional careers.

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

#92

Post by bawolff » Thu, Apr 16, 2026, 11:57 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…

I don't think there was ever a time where a solo-entrepenur could make real money without putting in lots of effort and taking lots of risks.

We remember the success stories, we don't remember the bankruptcies.

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

#93

Post by happybuy » Thu, Apr 16, 2026, 11:58 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…

> Instead, what I think has drastically changed over the past 40 years or so is the ability of a solopreneur to make real money.

Hard disagree.

As the article notes, I think if you concentrate on a real business, not a scam-y 'get rich quick scheme' business then, especially with the internet, its never been easier to run a solo business at scale.

For myself, I wrote an app as a side hobby, which then took off, so I started working on it part-time, then moved to full-time when the revenue justified.

It's now growing to where it exceeds what I would have made working for someone else.

Note this took 7+ years of constant work, improvements and care.

It's the type of dedication that makes you competitive with even larger organisations.

And the time required to be a 'success' ensures that you won't have any competitors who just want to make a quick buck or get to "passive income" within a year or two.

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

#94

Post by saulpw » Thu, Apr 16, 2026, 11:59 PM UTC

Loughla wrote: post #85

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…

We started a trophy and award business because my spouse was already making shirts and stuff so we had most of the equipment. The overhead is really low thanks to quick shipping from a large employee owned national supplier (seriously, JDS industries is fucking awesome). It's enough to pay for itself easily and pay for a vacation or two a year, for about 4 hours of work a week. If we really put effort in, it could re…

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.

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

#95

Post by cucumber3732842 » Fri, Apr 17, 2026, 12:03 AM UTC

mothballed wrote: post #43

cucumber3732842 wrote: post #7

Everything I'd want to do on a "side gig to iron out the kinks and then eventual business" basis is regulated to the point where that path is economically impossible and the only way to be in the black is to take out a big f-ing loan, quit your job and go all in on your new business. And it's not just me, all my buddies have this gripe. We've all got skills and experience and equipment outside our immediate careers a…

Where I live out in the country there are a lot of people with those kind of businesses. They bring you the goods and services to/from in a truck. If you ask to look at what they have... they have no address and won't tell you anything more than their goods/services dropped from the sky. At that point, I don't try to probe further... if I am happy I would rather not know.

>Where I live out in the country there are a lot of people with those kind of businesses. They bring you the goods and services to/from in a truck. If you ask to look at what they have... they have no address and won't tell you anything more than their goods/services dropped from the sky.

Yeah there's a fair amount of that here too.

Thinking about it on a meta level I think on the "low end" it's basically just a hack around how expensive employees are when you consider exposure. Sure you could have your $15/hr guys stay late and power wash your box trucks, deep clean your facility, etc, but some guy with a van will come in and do it on the weekend for a flat fee and if he falls off the ladder that's not your problem.

And on the high end it's a hack around overhead. You can have some guy show up on a jobsite, set up a tent to keep predatory eyes off and weld up the broken thing on your backhoe or the rental company calls that guy and repairs it on your job site without telling you giving you deniability. No expensive compliance costs of adding hot work to your job site or running a shop where that stuff happens regularly.

>if I am happy I would rather not know.

Always better to be able to say you don't know rather than "I asked and the answer seemed fishy but I didn't probe".

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

#96

Post by bawolff » Fri, Apr 17, 2026, 12:08 AM UTC

> I've met dozens of smart, capable people who had actual energy, and who spent their entire twenties bouncing between passive income schemes instead of building real skills // real businesses // real careers.

The author is acting like it hasn't always been this way. But it always has.

There have always been people who felt the allure of the get rich quick scheme. Its always been true that if they just spent the same effort on doing things properly they would probably make it but instead they bounce from one stupid scheme to the next.

Often its combined with some ideology about how the normal world is full of suckers and they are going to escape by not playing the game. Fraudsters love to target people who want to pull one over on the world. They are easy to manipulate so they usually fall for it when presented with an opportunity too good to be true.

The article, with a couple details about the specific examples changed could have probably been written in victorian times.

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

#97

Post by Marsymars » Fri, Apr 17, 2026, 12:10 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…

> Instead, what I think has drastically changed over the past 40 years or so is the ability of a solopreneur to make real money.

Part of that was accurately diagnosed by the article in the bit about the dog walking business vs dog walking platform.

My partner bootstrapped a successful full-time cleaning business that she ran for a few years and the limiting factor was basically her ability to hire and retain good employees. A physical cleaning business has no path to scale like a tech company though.

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

#98

Post by Marsymars » Fri, Apr 17, 2026, 12:15 AM UTC

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 people who are currently doing it?

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

#99

Post by aaron695 » Fri, Apr 17, 2026, 12:18 AM UTC

just-the-wrk wrote: post #89

Have we all forgotten Tim Ferriss' book 'The 4 Hour Work Week'? It was enormously influential and was likely involved in every one of these failed entrepreneur's ventures This discussion reads like 'staying inside from 2019-2022 changed social structures' without saying COVID once

[dead]

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

#100

Post by conorcleary » Fri, Apr 17, 2026, 12:32 AM 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.

I think this is what the 'forest for the trees' phrase is getting at...