8 ms·

This is fantasy land. Spend $3k on a website and you'll most likely end up making $0/month. This is HN, we all know this. There's a lot of work required to go f

This is fantasy land. Spend $3k on a website and you'll most likely end up making $0/month. This is HN, we all know this. There's a lot of work required to go from $0 to $200/mo. I might not be completely familiar with the vending machine industry.. but I doubt there's a spot out there worth a ton of money that isn't already claimed. Vending machines arent a new concept. And then he has the idea of using a middle man that'll charge him a fee for managing it, who gets to see exactly how much he makes. They're in a perfect position to squeeze him, if they dont straight up pocket a few dollars from it. This is more 4-hour work week success crap. There are tons of smart people out there.. if you think you can just phone it in, with no unique ideas on well trodden territory.. you're kidding yourself.

XorNot 5y ago
The basic problem of every business idea or advice: if it's so obvious or simple, why isn't everyone doing it? (and why will you succeed at it?) Which I like to pair with standard strategic thinking: assume your adversary (in the market economy, it's everyone) is at least as smart as you.
- tinco 5y ago
  Be careful though, that it's not a rhetorical question. There's perfectly good answers like "no one has thought of it yet" or "others aren't confident enough". There's tons of businesses that are simple and obvious and that took just the right kind of team with the right kind of effort.
- chillacy 5y ago
  Everyone knows how to lose weight: you eat less, you work out more. If it’s so obvious and imply, why isn’t everyone losing weight? Some things require so much work to do that they leave an opening, verses things with low barrier to entry. Hence why real estate has more room for profit than stock investing.
  - XorNot 5y ago
    Sure, which is the point of the pair of questions - and well covered by critiques of this article elsewhere. As people have noted - the ideas in the article aren't realistic because once you think on it or research it, the exclusionary factors become apparent. That's the whole point of stressing the question though: to identify whether you have any unique advantages which mean you should succeed (or alternatively: to work out whether the idea is actually unique).
mistrial9 5y ago
my brother in California was gifted a vending machine route by his new Father-in-law, in the 90's. (like a newspaper route in the old days, similar but more independent). It seemed honorable at the time, but the costs did not balance out and I believe it failed due to no-one's fault. Painfully, actually
seoaeu 5y ago
It is also over-complicating the very simple idea that you'll end up wealthier if you invest your money rather than spend it
JohnJamesRambo 5y ago
I think the best article would have said simply invest as hard as possible in a low expense ratio ETF instead of the vending machine etc. It involves zero mental effort and I'd be amazed if you can beat 10% returns year after year. I'm reminded of our previous trust fund baby president that would have had infinitely more of his inherited wealth if he had just invested in the SP500 instead of his "business ventures." The light speed of these hypothetical doctors' accumulation would come from living as simply as possible and even using debt to invest more heavily in low expense ratio funds early in their careers.
- chrisco255 5y ago
  If you had just invested all your earnings into Bitcoin since 2010, you'd be a billionaire. Why does everyone think that retrospective advice is useful? Are there universes where the S&P500 tanked while real estate market held its value? Of course, and for varying decades this is true. But to say that no one should ever invest in anything except S&P is to argue that nothing ever new should ever be created.
- seem_2211 5y ago
  The problem with buying cashflow through ETF investment is you have to make so much money to get to any real level of cashflow. Buying $30k of index funds will set you back ~$50k pre tax, which is 25% of our doctors income. If you subscribe to the 4% rule, you've "bought" a perpetual cashflow of $1200 annually. To get a passive income of $200k annually, you need $5m in index funds which is going to take either ~30 years with compounding interest at 10% (assuming you are investing a continuous $30k after tax) every year. Realistically, to make any sort of actual money (I'm defining this as $200k + annually in passive/semi-passive income), you need an ownership stake in a business or in another asset (likely property). The vending machine example is stupid for a doctor to do, because it's the sort of opportunity that rewards someone with a lot of hustle and low opportunity cost - good luck competing with an entrepreneurial college student who has a lot more free time. Same thing with the website.
  - quickthrower2 5y ago
    The most money is to be made by selling assets to a greater fool (or sage?) in the biggest asset bubble of humanity. Anyone throwing rocks at Dogecoin for being a bubble is living in overpriced glass houses. I’m not saying there will be a crash. It will be interesting to see how this money experiment turns out.
vannevar 5y ago
Yes, the article gives wildly optimistic examples. No one is going to sell you a website that reliably makes $200/mo for $3000. They would ask more like $30,000. What the article brushes over is the wealth gap that prevents most people from buying cash flow. Sure, they probably buy too much stuff. But how long would someone making minimum wage need to save enough money to buy a $30,000 income-producing asset that adds $200/mo to their income? Especially given that the percentage of their income going to housing keeps rising, as the wealthy extract higher and higher rents from them?

XorNot 5y ago

The basic problem of every business idea or advice: if it's so obvious or simple, why isn't everyone doing it? (and why will you succeed at it?) Which I like to pair with standard strategic thinking: assume your adversary (in the market economy, it's everyone) is at least as smart as you.

tinco 5y ago
Be careful though, that it's not a rhetorical question. There's perfectly good answers like "no one has thought of it yet" or "others aren't confident enough". There's tons of businesses that are simple and obvious and that took just the right kind of team with the right kind of effort.
chillacy 5y ago
Everyone knows how to lose weight: you eat less, you work out more. If it’s so obvious and imply, why isn’t everyone losing weight? Some things require so much work to do that they leave an opening, verses things with low barrier to entry. Hence why real estate has more room for profit than stock investing.
- XorNot 5y ago
  Sure, which is the point of the pair of questions - and well covered by critiques of this article elsewhere. As people have noted - the ideas in the article aren't realistic because once you think on it or research it, the exclusionary factors become apparent. That's the whole point of stressing the question though: to identify whether you have any unique advantages which mean you should succeed (or alternatively: to work out whether the idea is actually unique).

mistrial9 5y ago

my brother in California was gifted a vending machine route by his new Father-in-law, in the 90's. (like a newspaper route in the old days, similar but more independent). It seemed honorable at the time, but the costs did not balance out and I believe it failed due to no-one's fault. Painfully, actually

seoaeu 5y ago

It is also over-complicating the very simple idea that you'll end up wealthier if you invest your money rather than spend it

JohnJamesRambo 5y ago

I think the best article would have said simply invest as hard as possible in a low expense ratio ETF instead of the vending machine etc. It involves zero mental effort and I'd be amazed if you can beat 10% returns year after year. I'm reminded of our previous trust fund baby president that would have had infinitely more of his inherited wealth if he had just invested in the SP500 instead of his "business ventures." The light speed of these hypothetical doctors' accumulation would come from living as simply as possible and even using debt to invest more heavily in low expense ratio funds early in their careers.

chrisco255 5y ago
If you had just invested all your earnings into Bitcoin since 2010, you'd be a billionaire. Why does everyone think that retrospective advice is useful? Are there universes where the S&P500 tanked while real estate market held its value? Of course, and for varying decades this is true. But to say that no one should ever invest in anything except S&P is to argue that nothing ever new should ever be created.
seem_2211 5y ago
The problem with buying cashflow through ETF investment is you have to make so much money to get to any real level of cashflow. Buying $30k of index funds will set you back ~$50k pre tax, which is 25% of our doctors income. If you subscribe to the 4% rule, you've "bought" a perpetual cashflow of $1200 annually. To get a passive income of $200k annually, you need $5m in index funds which is going to take either ~30 years with compounding interest at 10% (assuming you are investing a continuous $30k after tax) every year. Realistically, to make any sort of actual money (I'm defining this as $200k + annually in passive/semi-passive income), you need an ownership stake in a business or in another asset (likely property). The vending machine example is stupid for a doctor to do, because it's the sort of opportunity that rewards someone with a lot of hustle and low opportunity cost - good luck competing with an entrepreneurial college student who has a lot more free time. Same thing with the website.
- quickthrower2 5y ago
  The most money is to be made by selling assets to a greater fool (or sage?) in the biggest asset bubble of humanity. Anyone throwing rocks at Dogecoin for being a bubble is living in overpriced glass houses. I’m not saying there will be a crash. It will be interesting to see how this money experiment turns out.

vannevar 5y ago

Yes, the article gives wildly optimistic examples. No one is going to sell you a website that reliably makes $200/mo for $3000. They would ask more like $30,000. What the article brushes over is the wealth gap that prevents most people from buying cash flow. Sure, they probably buy too much stuff. But how long would someone making minimum wage need to save enough money to buy a $30,000 income-producing asset that adds $200/mo to their income? Especially given that the percentage of their income going to housing keeps rising, as the wealthy extract higher and higher rents from them?