22 ms·

Ask HN: What passive income investments exist to supplement your salary?

• brundolf 5y ago
  I would point out that renting out a condo is not a passive investment; keeping up with tenants, doing cleaning and maintenance, etc. can be a full-time job (maybe less so for a condo than a house, but still). And as we here probably know, maintaining a website is not necessarily passive either, and I would imagine the same is true of a vending machine. These are projects, and at some point they become businesses; not simply "here's my money, make me more".
  • lucas03 5y ago
    some businesses take care of that work for 15% on rent
  • setr 5y ago
    Passive income is usually “dramatically less work than a full time job” — e.g. 5 days effort per month. Even paying someone else to do it means you still need to check up on it (and make sure they’re actually doing the work, and doing it competently)
  • awillen 5y ago
    You can hire a property manager who will take a percent and turn it into almost entirely passive income. This is what I do with my properties, and all I do is approve expenses over a certain level and forward tax docs to my CPA at the beginning of the year.
    • reasonabl_human 5y ago
      Do you have any tips on vetting property managers, or an appropriate going rate for such work?
      • awillen 5y ago
        I pay mine 7% of rent - you can definitely find lower rates if you're dealing with large buildings, but I'm at 7 units total and I really like the guy. In terms of vetting them, first thing is to check licenses - most states require them to either be a licensed real estate broker or working under one. I prefer to work with someone who matches me in scale/style - my guy is a broker and runs his own PM service. I deal directly with him. I'd be hesitant to use a larger PM company (even if it might be a bit cheaper) at my scale, because I'm small enough that I'll be a very low priority and will have the most junior employees dealing with my properties. That can be an issue, since they're not necessarily going to have the expertise to do the long-term stuff like knowing when to get the roof inspected. When my wife moved out of her last apartment before we got married, the rep from the PM company refused to do a move-out inspection, since there was still furniture inside that could have been hiding things. Had they charged my wife for anything, we would've taken them to small claims since PMs are required by CA law to inform the tenant of their right to a move out inspection and then to perform one and provide written feedback on request. That's what happens when you're dealing with someone in their early 20s who just passed the real estate agent exam (which I have passed... it is not hard) and doesn't know what they're doing. Also, look for companies that serve your kind of property - dealing with a property that has an HOA is different than one that doesn't. Dealing with a single family home is different than dealing with a condo. Dealing with a whole apartment building is different than dealing with a single apartment. And lastly, references. You should be able to get a bunch of them from the PM. Try to get tenant references in addition to owner references - if the PM is ignoring or mishandling tenant issues, the owner probably doesn't know.
  • turtlebits 5y ago
    I would disagree. If you own property in a good location, screen your tenants, it's almost no work. I have several properties and spend less than an hour a month on average in total dealing with any issues.
    • devoutsalsa 5y ago
      Wait until one of them starts a fire. Source: My family had a tenant that started a fire.
• seibelj 5y ago
  Compound will give you a risk-free 6.3% APY (other than the risk of smart contracts) on USDC (digitized dollars) https://compound.finance/markets/USDC https://compound.finance/markets/USDC
  • justinzollars 5y ago
    Nothing is risk-free. There is political risk (it gets outlawed), technological risk (it gets hacked), theft risk (it gets stolen), a comet hits the earth risk etc etc.
  • kinghajj 5y ago
    Additionally, BlockFi pays 8.6% APY on stablecoins. If you have any BTC, ETH, or LTC, they'll pay interest on those as well. Normally interest is paid in like-kind (e.g. a BTC balance generates BTC interest), but with the Flex option, you could have interest from all balances paid as one token. I chose to have everything paid in GUSD stablecoin, for instance, primarily to make figuring out taxes easier.
    • lgats 5y ago
      BlockFi's interest is a very attractive offer, but the risks you're exposed to aren't very transparent. What could happen that would impact the exchange rate of this 'Stable coin'? What risks exactly is one taking on for the 8.6% interest?
      • quickthrower2 5y ago
        With crypto if it’s on an exchange then you can lose it. Not your keys and all that jazz. Never worth the risk unless there is a legal insurance provided by the government which there isn’t.
  • everfree 5y ago
    This would have been a good comment if it hadn't said "risk free".
  • emouryto 5y ago
• theplague42 5y ago
  The rate of return on investments is proportional to the risk and/or effort necessary to make it work. Contracting out the management of things like condos, vending machines, etc. destroy the vast majority of any gross profit. Investing in a large-cap, high-dividend mutual fund (Vanguard, etc.) will generate reasonable returns with 0 effort on your part. Just cash out your dividends rather than re-invest.
• chillacy 5y ago
  One which I'm curious about is buying software businesses with existing user bases and adding new features, kind of the equivalent of buying a fixer upper, but it uses my unique skills.
  • jcun4128 5y ago
    Are there any good sites that do that... seems like they're filled with sites that are hard to verify if they're legit.
    • bttrfl 5y ago
      you might want to check MicroAcquire
      • Frypa 5y ago
        Require you to have a linkedin account to continue. Depressing. I gave up.
        • deleted 5y ago
          [deleted]
        • deleted 5y ago
          [deleted]
      • ornornor 5y ago
        I was disappointed by that website. You can’t see much without registering and once you have, you still can’t see much about businesses (let alone ask questions) without buying a 300$ membership.
  • throwaway088 5y ago
    I have been part of feinternational for sometime and saw their prospectuses. In general, if there is an existing user base, then the price factors it in already. You must have a plan and ability to increase the userbase in order to get a return on investment. Otherwise, some competitor may simply attract your customers and you are doomed.
• throwaway088 5y ago
  So, about renting, I bought a single family home for $500k in bay area. It now is worth $1M. Gets me rent before expenses of $40000. So far, I have spent about $5k per year on. Repairs etc. So effectively, I make about $20k after taxes, repairs, mortgage interest etc. Overall, I spent $350k by way of downpayment, mortage interest payment, etc. No major tenant issues. Hence, I would peg my return on investment of 5% if I do not account for increase in price of the house. If I do, it would be around 10% which is what FAANG has been giving me, with much less hassles. Decide for yourselves if this is passive enough for you.
  • dangwu 5y ago
    In hindsight, was it worth it compared to just investing all that money into the S&P500?
    • theplague42 5y ago
      I think that's his point; that 5% returns aren't actually that great.
      • dangwu 5y ago
        Well, 10% is great, and he's diversified. I don't think it's that cut and dry.
      • bluGill 5y ago
        Diversity is useful though. Stocks have crashed in the past, and they will in the future. As has real estate and every other investment. You thus need a backup plan in case your investment fails. I make no attempt to predict WHEN these crashes will happen, or how big they will be.
        • ac29 5y ago
          A single property is not diversification, if anything it further concentrates your money into a single asset.
• Havoc 5y ago
  I’ve got a share portfolio that generates a couple bucks a day in short share lending. Literally just tick a box to give broker permission. Nothing is risky free but looked into it and as best as I can tell it’s a pretty good deal. No inconvenience, not much risk etc
  • justaguy88 5y ago
    I had always assumed they just did that already without permission
    • AnimalMuppet 5y ago
      Perhaps they do. If they get caught, though, that's big trouble with the regulators.
      • Havoc 5y ago
        Its generally one of the forms you sign during application
    • Havoc 5y ago
      Basically all of them will...Interactive Brokers is nice in that they have a clear "we'll give you a 50% cut of actuals on your shares". Other brokers seem to either keep it or implement a far less transparent process. Since I'm holding risky shares (and thus higher % interest on borrowings) I definitely that directly linked
  • jimmydorry 5y ago
    The problem with this though is that you are giving ammunition to those shooting at you. If their gambit succeeds (shorting), the value of your shares diminish. The net effect of doing this might not be entirely visible as a "smaller fish in the pond", but it is there none-the-less.
    • Havoc 5y ago
      Yeah aware of that. Short of a scenario like GME where there is an actual shortage of shares to short it won't move the needle given that available shares generally exceed borrowed shares. It's a liquid market...so if I don't do this all that happens is the people shorting pay a fraction of a penny more in interest. For someone serious about strategically attacking something as a gambit / strategy that makes zero difference. You can actually kinda see the effect in your own reports because it's proportional. e.g. If I have 1000 shares and only 200 get lent out then there isn't much short pressure. I've only seen it at 100% a few times and then interest rates soar so compensation for is good. Ultimately it'll return to the intrinsic value of the company in the long run, so don't particular care about short term shenanigans
• hash872 5y ago
  As another poster already said, being a landlord is not 'passive'- you are essentially buying a part time job with no set off hours. The heat could go out on Christmas Eve, while you're on vacation, etc. It is a highly regulated (especially in blue states) field involving, you know, actual human beings! Anyone advocating for being a landlord as a 'passive' investment vehicle is generally some type of Trump University or 'creative real estate' guru trying to sell you something. By contrast equities average a 9% annual rate of return, and are truly passive
  • PiRho3141 5y ago
    You would be correct if you were managing this property yourself. This would be incorrect if you have a property manager managing this property. You can work with your property manager to auto approve any house related work that is under a certain threshold. Otherwise, they will send you an invoice for you to pay at your convenience. With that said, depending on the property manager, they will do some of the following: find tenants, place tenants, evict tenants, collect rent, find contractors/repairperson to fix issues, etc. The property manager makes it mostly passive but probably an hour a month of work if that.
    • hash872 5y ago
      Sure, but then the property manager charges so much that it's probably not a profitable investment, or at least a much less profitable one. They typically charge a % of the rent, plus another fee for whatever activity they do- x number of dollars to visit the site, x dollars to show the property, x dollars to go to court, manage the contractors, and so on. Now it's 'passive', sure, but no longer an 'investment'
      • appletrotter 5y ago
        > Now it's 'passive', sure, but no longer an 'investment' ...unless the math adds up and you're still making a profit.
• betterunix2 5y ago
  No investments are "fully" passive, but some are more passive than others. For equities, the Dividend Aristocrats (those companies that have paid an increasing dividend for 25 years or more) are pretty close, and also are somewhat lower risk than equities in general (lower beta). The traditional passive income investments are bonds, and with as little as $6000 you could create a bond portfolio of US government debt that pays a monthly coupon (each individual bond is $1000 and pays interest every 6 months, so with 6 you get monthly income until the bonds start to mature). Unfortunately, interest rates are so low right now that you probably won't get the sort of income you are looking for even with the longest duration government bonds. Anything that is not as standardized and well-organized as the stock or bond markets is going to require more work and thus is less passive, or will result in you having to pay others to do the work on your behalf (thus leaving you with less income).
• TatersGonnaT8 5y ago
  I own a rental property, and I have a property manager who handles the day-to-day operation. The money I've put towards the rental would have performed better if it would have gone towards an index fund instead and would have been lower stress that way, but I like the feeling of having at least some "diversified" assets in real estate. I've also made a couple games in my free time ("Dodge the Wall!" on Steam and "Cup Pong AR" on iOS/Android). Those games have been a great way to make ~tens of dollars. The best way that I've made passive income is just through boring Vanguard index funds/target date funds.
• Ennis 5y ago
  By passive I'll assume you mean less effort and risk than starting a new business that requires daily attention. The nice things about the property market are: 1. High leverage - to a very high amount when you put down payments greater than 30-50%. 2. Managed or protected by some governments. Gives a more consistent rate of growth in many fast growth cities. 3. Cashflow and appreciation. The details matter and there's obviously skill involved in making it work. At some point like other businesses you will need to hire others to manage the day-to-day if you choose to keep growing.
  • deleted 5y ago
    [deleted]
• sbmthakur 5y ago
  Relationships with people can be considered as an investment. Off late I have noticed that any relationship will start degrading in the absence of communication. It's better to invest some time in people you really value and nurture the relationship over time.
• frompdx 5y ago
  I help manage some rental units for my family and it's definitely not passive income. It's not full time work, but something requires your attention regularly. There are plenty of pitfalls where you can find yourself losing money instead of making a profit. For example, if turning your unit over between tenants ends up being costly and time consuming you will still need to pay taxes and maybe a mortgage in the interim. It's not a bad way to earn an income, but it really requires a lot of capitol to get started and earn enough to be worth it. Once you have enough units to sustain yourself you'll invest a decent amount of time keeping the whole operation going. Edit: Some people are pointing out you can use a property manager as a middle man to keep your involvement to a minimum. This is true but they will cut into your profits, which may or may not work for you depending on your margins. But it might make sense to go this route if you have minimal time or many units to manage.
• logikblok 5y ago
  I'm in the UK and there are quite a few services now that invest your money into property and infrastructure loans as peer to peer loans. I've invested in quite a few and see ~£50 a month as gains across the total set. I usually either reinvest or I pay out and buy into other investments. I could increase my exposure here but I think I'm at a comfortable level for my risk appetite. For me this is investing in property but without the hassle of long term maintenance. You don't own the property but it's much more hassle free and fairly passive as long as you pick which things you'd like to invest into. Services I've personally invested in and would vouch for: - https://www.kuflink.com/ https://www.kuflink.com/ - https://www.loanpad.com/ https://www.loanpad.com/ - https://www.lendingworks.co.uk/ https://www.lendingworks.co.uk/ - https://www.abundanceinvestment.com/ https://www.abundanceinvestment.com/ You might like to try out some peer to peer loan based investments if you're after some fairly passive gains.
  • antaviana 5y ago
    Is £50 a sizeable return in the UK?
    • jbjbjbjb 5y ago
      I opened up a couple of those links and found tax free returns of 3 to 4.5%, so not very enticing.
    • simooooo 5y ago
      About enough to cover your broadband bill
  • itisit 5y ago
    50 as in fifty? Guessing that’s a typo.
• impostervt 5y ago
  Publish books on Amazon. I've published 4 and make about $3k in profit per month, after paying for ads on amazon. Don't write them yourself, that's a lot of work. Instead, do key word research about what books sell in non-fiction categories (fiction is a whole different ballgame). Look for keywords that 1) auto complete in the amazon search bar, and 2) have less than 4,000 matching books, and 3) have an average Amazon BSR of less than 150k. The above isn't easy, nor is it particularly difficult. Once you've found a good keyword, create an outline on the subject. You'll have to do a bit of research here, but this can be done in a few hours to a few days. The more time you spend here, the better your result will be. Then, hire a ghostwriter to produce a 30k-ish word long book. This will run you around $1000, and produce a book long enough to turn into a 3+ hour audiobook on Audible (audiobooks over 3hrs get significantly better royalties than less than 3 hours). Get a cover made. This will run from $50ish on fiverr to several hundred on 99designs or upwork. Don't cheap out, good covers are important. Publish on amazon. Run ads. There's obviously more too it than this. If interested, look up the Mikkelsen twins or Dane McBeth on youtube.
  • bugzz 5y ago
    Are the books any good? What are reviews like?
    • impostervt 5y ago
      I like to think my books are good. One has over 900 reviews with an average of 4.8 stars. Two others have over 100 reviews with about a 4.6. The 4th one has about 20 reviews with 4.4 stars-ish (I didn't follow the formula on this one, my own fault). I'm not the only one doing this, of course. Most of the books I see my competitors make are of lower quality, but they probably paid a lot less for them. In general, books made by people like me read like really long blog posts - because that's where most of the information comes from.
      • glenneroo 5y ago
        Did you buy any of those reviews?
• mamcx 5y ago
  Other say how landlord ON USA are not that passive, but maybe do it in other countries? Here in Colombia being landlord is very good, because most use an agency that manage the property (collect the money and do some basic fixes). I probably have called the actual owner 1 or 2 times in a decade for approval for some fixes.
  • codethief 5y ago
    I assume you're talking about being landlord of an apartment in a larger apartment complex where a property manager takes care of many apartments at the same time? I'm asking because my impression is that this scales better and should therefore be significantly cheaper than paying someone to manage a single apartment or house somewhere. (Besides, with a house or I'd imagine a lot more fixes being necessary over time.) Also, how many tenants has this apartment (have these apartments) that you're managing(?) had in those ten years? PS: Since I've actually been dabbling with the idea of buying property in Colombia, may I ask in which city you are? :)
    • mamcx 5y ago
      Here exist companies and individuals that do it. In fact is unusual your rent is directly to the owner, is the norm you pay the "Arrendadora" instead. The case of apartment is a bit different. All complex have "administration" that everyone pay, but this is mostly in "closed complex". If the building is in the open, is more common is a person that take the role. BTW: I'm close to Medellin in a town called El carmen del Viboral. Right now exist a lot of demand for out-of-city property...
      • codethief 5y ago
        Gracias, parce, por su respuesta! :) (Incidalmente, el lugar donde quería buscarme un apartamento es Medellín.) > All complex have "administration" that everyone pay, but this is mostly in "closed complex". Would this administration also take care of fixing things and taking on the role of "arrendador" if I, as the owner, rent out the apartment to someone else? (Provided I pay them, of course.) Or would I have to hire someone else for that?
• nknealk 5y ago
  Several considerations to what other commenters have already said: * Rental properties, vending machines, etc have poor liquidity. What if you need to get your cash back out in an emergency? This poor liquidity is particularly correlated to poor economic conditions (ie. it takes longer to sell a condo in a bad economy which is also when you might really need cash). * Many non-traditional investments are not actually passive. Even with a property manager, you still have to manage that person. Also, many investments can have quarters with negative cashflow. What might happen to your cashflows in a given period if a tree falls on your rental property breaking the roof and the tenants move out as a result? What if your property manager also quits on you because that situation isn't worth dealing with? * There are a variety of ETFs focused on non-debt income (Eg. high dividend equity funds). Vanguard's trades under the ticker VYM. If you come from a background purchasing equities, these kinds of investments might be more comfortable for you.
• lend000 5y ago
  Truly passive income doesn't really exist (and shouldn't exist, outside of perhaps some type of state sponsored basic income). The exception in recent history is ETF's, which provide a relatively high level of reliable growth due to a questionable tax exception and government monetary policy that favors stock market positions over other economic metrics such as wealth inequality. I believe ETF's are bad for the economy, despite how popular they are on HN, but if you are looking for truly passive income, I think that's about as close as you can get.
  • kinghajj 5y ago
    Would you mind elaborating on why you dislike ETFs? From my point of view, they provide retail trades the opportunity easily to allocate a portfolio among various sectors. Does your dislike of ETFs extend to "old-school" mutual funds, or is there something about ETFs in particular that turns you off of them?
    • axiosgunnar 5y ago
      The criticism is that they do not lead to efficient allocation of capital (the point of the stock market) but rather a feedback loop where the ETF fund has to buy TSLA and AMZN because they are in the top 500, and that makes them worth even more, keeping the in the 500s forever, and not because they produce value and were deemed a good choice by a professional investor that did his due diligence, but simply because of the ETF feedback loops.
      • dangus 5y ago
        Maybe this is just a pedantic terminology thing, but what you're talking about is much narrower than the ETF. I think the image of an ETF you're seeing is of the S&P 500 index fund or total stock market index fund. However, an ETF is just a method of exchanging securities. There are thousands of ETFs in all kinds of different categories: https://etfdb.com/etfs/ https://etfdb.com/etfs/ I personally subscribe to the idea that the fears about passive indexes ruining the market with feedback loop economics are overblown. What they really did was bring down the cost of actively managed funds by providing competition. Not only that, in the post-Bogle world there are a lot of "hybrid" funds and robofunds that offer index-like expense ratios with more opinionated holdings than VTI.
• meristohm 5y ago
  Cheeky-and-also-serious response: Soil, for the food you grow to eat, share, or sell. Much about a green, growing area is passive income for is. Another option is lobbying your elected officials to regulate in the interest of healthier land, water, and air, which will help you and many others. Making something useful and giving it away (or charging a nominal amount for hosting costs, or asking others to help with that to keep the use-barriers low) is an investment in other people that may continue paying dividends long after you’re dead.
  • e19293001 5y ago
    No need for soil for some plants. Check-out Hydroponics[0] no need soil for farming. You could grow indoors or outdoors. That's free food for the future. There's a lot of ongoing hype in this right now. Youtube, facebook groups, reddit, blogs . . . [0] - https://en.wikipedia.org/wiki/Hydroponics https://en.wikipedia.org/wiki/Hydroponics
    • meristohm 5y ago
      Yes, and soil can be such a rich place for life to exist and carry on. Hydroponics is cool and useful, and I’m going to keep converting my previously-grass yard into meadow, woodland, and no-till farm because I love the feeling of being surrounded by so much life, above and below. Soil is also a carbon-sink. At the Bell Museum in the Twin Cities there are examples of prairie grasses whose roots went down about six feet (maybe more; trying to be conservative here). I live in a graveyard of massive, long-dead tree-stumps, new trees around my age. What it used to be I like to imagine and to help bring about again, for its own sake.
  • deleted 5y ago
    [deleted]
• everfree 5y ago
  My advice is this: Think about your unique domain knowledge. Ask yourself: * What do I know that gives me an advantage over the average joe? * What other resources do I have that give me an advantage over the average joe? Generally speaking, if your idea to make money sounds really lame, boring, risky, complicated and/or esoteric to an uneducated layperson - but due to your domain knowledge you know that it's not - you're on the right track. Bonus points if it benefits from obscure, difficult-to-get resources that you already have (for instance, a best friend who owns a niche website you can advertise on, or family connections in the X industry, or you live in a town that has a huge Y industry.)
  • giantg2 5y ago
    "What do I know that gives me an advantage over the average joe? What other resources do I have that give me an advantage over the average joe?" What if my answers are none and none?
    • simpixelated 5y ago
      Some of the best advice I've ever heard regarding this is that you don't have to be an expert, you just have to know a little bit more than someone else. So take whatever you've recently learned, write it up, package and sell that. People tend to overestimate the level of knowledge required to sell advice. People pay for beginner level courses all the time.
      • Breza 5y ago
        Marge to Lisa: “I could give piano lessons!” Lisa: “But you don’t play the piano…” Marge: “I just gotta stay one lesson ahead of the kid!”
    • adamhp 5y ago
      Chances are, you're not thinking about it hard enough. If you truly think you have nothing to offer, then start acquiring something to offer. Put in the hard work and thought into acquiring specialized skills and relationships with people. It takes time (usually a lot of it), but it is not complicated.
• outro_macros 5y ago
  Staking cryptocurrency in a very conservative way has produced the following incomes: $4600 - 2017 $23,000 - 2018 $3700 - 2019 $2500 - 2020 2021 is shaping up to look like 2018 again but I haven't run the numbers
  • lostmsu 5y ago
    Staking as in PoS?
    • outro_macros 5y ago
      Yes PoS is _part_ of the consensus algo for this coin (Decred) - only 30% of the block reward goes to PoS while PoW miners (60%) and the the treasury (10%) receive the rest of the reward
  • twox2 5y ago
    Which currencies? How much have you had to stake to make these kinds of returns?
    • outro_macros 5y ago
      I just stake decred. Years ago I was much more ambitious and after losing money in multiple exchange hacks, and then losing nearly everything again in the ethereum DAO exploit, I will never again leave coins around outside of my own custody. Few cryptos let you stake easily while maintaining complete custody of your coins Last I checked, I averaged just over the current annual roi at about 5%, but back in 2017 roi was higher at like 7% so you can do the math to see how much I have :) It's all a bit of a blessing and a curse though. The year I made over 20k staking, I actually paid ~35% tax on that without realizing any profit in USD but thankfully I had enough money to handle that
      • twox2 5y ago
        Cool thanks for sharing. The volatility can get brutally expensive. I sell NFTs for ETH, which of course have to pay income tax on, but if suddenly ETH tanks.... ouch
• blentrop 5y ago
  I've been using Mudrex[0] to rent bots to put my crypto to work. They have been very good and open about everything. Creators are active in discord server answering questions. [0] https://mudrex.com/ https://mudrex.com/
  • Blahah 5y ago
    It's hardly fair to judge a crypto fund on the last year. They would have had to be spectacularly incompetent to lose money.
    • blentrop 5y ago
      Agreed, and sometimes it would have been better to just HOLD instead. But there's plenty of bots with different approaches and risk management. Some do better on side markets or even downturn markets. Some do better on a bull run. Just need to adjust you portfolio accordingly.
• jonkho 5y ago
  Opportunity abounds in the defi crypto space. Being a liquidity pool provider on a usd stable coin pair yields ~40% apy currently[1]. [1]https://app.beefy.finance/ https://app.beefy.finance/
  • randomopining 5y ago
    What is the risk with stablecoins?
• PiRho3141 5y ago
  I see a lot of people talking about rental properties and I don't think there's enough talk in favor of rental properties so here's my shot at it. My philosophy of being a landlord is not to bank on appreciation, but rather find houses where the mortgage is well below what tenants are paying for. How do you find those kinds of houses? You buy dilapidated houses, renovate them and then rent them out. If you don't want to go through that work, there are middlemen called "turnkey providers" that renovate houses and then sell them to investors for a profit. From there, you can decide whether to manage the property yourself (less passive) or hire a property manager (more passive). If you hire a property manager, they do all of the busy work associated with owning a house like finding tenants, collecting rent, evicting tenants. They do not get paid unless there is a tenant on the property so it's in their best interest to find you a good tenant. The thing I like most about rental properties is four fold: 1) Positive cash flow (rent minus all operating costs) 2) Depreciation (in the US, you can depreciate the cost of the house--not land--over 27.5 years which usually makes the cash flow stated above tax free) 3) Principal payments (part of the mortgage the tenant pays goes into the principal of the property--usually around 30% of the first payment goes to principal if you put down 20% and it only goes up from there) 4) Appreciation (the house & land usually appreciates at pace with inflation) Graham Stephan talks about this in his YouTube video: https://www.youtube.com/watch?v=h8wNUaBgZTk https://www.youtube.com/watch?v=h8wNUaBgZTk Also remember, the longer you hold the property, the higher the rent will be while your 30 year loan will stay flat. This makes holding property much more appealing later on but with higher repair bills as well as things start to break. There's a lot of advantages with owning homes IF you do the math correctly. Here's a video of Brandon Turner, the owner of Bigger Pockets, discussing how to analyze rental properties for the math to make sense. https://www.youtube.com/watch?v=2uogn4qtZ8U https://www.youtube.com/watch?v=2uogn4qtZ8U Also, if there's a downturn in the market, usually people that own homes move to rental properties. If you're interested in rental properties, I'd suggest the bigger pockets forums where you can read about everyone doing this type of stuff: https://www.biggerpockets.com/forums https://www.biggerpockets.com/forums
  • nyxtom 5y ago
    Graham has a great channel for this. Love his work. This is known as the Brrrr method I believe
• lucas03 5y ago
  What I have: 1. dividend growth portfolio 2. p2p lending 3. lifetime affiliate commissions for referrals 4. SaS website with paid membership What I plan to have in the future: 1. crypto lending 2. real estate
• cjohansson 5y ago
  I use an automatic saving from my bank-account to a investment-robot that my bank provides that automatically buys shares in different funds, I would say it gives 10-20% back and requires zero effort, took less than an hour to setup
  • bluegene 5y ago
    Which bank is that? Can you setup a ceiling?
    • jcims 5y ago
      Chase does this
    • nyxtom 5y ago
      Charles Schwab has these services, fidelity as well. I think most actually provide this but Schwab is the one I use
• deanmoriarty 5y ago
  Credit card cash back, it’s easy to get 5% on most purchases. That’s $1,000 tax-free a year for $20,000 expenses you’ll have either way.
  • m9731526 5y ago
    It makes me sad that $20000 is my annual income and I'm a okay (I guess?) developer!
    • HashBasher 5y ago
      Where are you located? That seems like an insanely low salary.
      • m9731526 5y ago
        Taiwan. The minimum wage here is about 24000 TWD ≒ 860 USD. I started at 31000 for 2 months, 36000 for 1 year, now 41000 for another half year. Quite a big company though.
        • quickthrower2 5y ago
          Your advantage is cost of living then. You can create a SaaS and live off it much sooner than a SF person spending $100 a week on sourdough bread
          • m9731526 5y ago
            Yeah, as long as one is not trying to purchase a real estate he can have a not bad life in Taiwan.
  • ozim 5y ago
    I still would rather not spend or cut down $20k expenses to $19k or less. Somehow not spending money feels like a better option.
• shawnz 5y ago
  Equities and ETFs already give you access to those other mechanisms. For example, you can get exposure to real estate through REITs
• ribab 5y ago
  Start a blog. I spent minimal effort making 5 blog posts a few years ago and it already pays for the cost of the domain through ads. Imagine what revenue 100 blog posts, or 1000 would bring in. https://www.codingwithricky.com/ https://www.codingwithricky.com/
  • miguendes 5y ago
    Interested to know the source of this income. Is it through affiliated links? Selling your product?
  • cosmodisk 5y ago
    I'll probably end up doing the same pretty soon: there's quite some money to be made in the sector I work+ no serious SEO work done by any of the main players,so a website with 100-200 blog posts would do nicely.
• nyxtom 5y ago
  Here's what we do: - Max out 401k - Automated contribution to Roth (up to max), can also use backdoor traditional conversion strategy here - Automated investment into standard index fund, charles schwab has a robo advisor that will automate all this stuff for you, diversification strategies and keep in line with your goals. - Crypto (10% risk exposure here, or more depending on your comfort levels) - Own a home, have used market opportunity to take advantage of cash out refinance, reinvest into our portfolio, simple upgrades to the home and savings. - Keep debt low or completely gone - Don't buy expensive stuff - Take advantage of community supported agriculture if you want to save on food (some places will give you discounts if you order for the whole year) - For home expenses and major repairs you'll want at the minimum 3% of your loan per year on hand. Try and maximize this so you don't have to dip into credit - Keep a savings around for other emergencies (if your health insurance plan includes HSA you can take advantage of growth opportunity here, where contributions here will grow against index funds if you can find the right product - health equity is one, fidelity also offers accounts). HSA withdrawals are tax free for medical expenses at any time. When you are over 50 you can withdraw from your HSA for any reason at all you just get taxed for non-health expenses at the income bracket (similar to other retirement accounts). - save up for goals and things you want like a family vacation - Minimize your subscription services - Look into wholesale cell phone plans (Ting, Visible, Google Fi) it uses the same networks and generally can save you money on your existing plan. - Build simple SaaS projects that can pull in even 3%-5%/year would be a great goal to go for. It's not income replacing levels, but it's enough. Use that to reinvest where appropriate (back into project, or into other areas of portfolio) The goal is to try and have a portfolio that can beat standard inflation *and* lifestyle inflation. You would think this is a lot of scrimping and saving but our expenses are quite low just using these strategies. One of the largest expenses we have is food and mortgage payments. We are considering looking into rental income at some point when the market is in a little bit better buying opportunity. I have friend in Utah that owns a startup called Rentler that does property management as a service. It works quite well so we may end up using something like that to take care of rental investments in the future. I realize not everyone is at this position in life but it’s basically the same strategy we have used until we could move to the next thing. We started out with minimizing our expenses and putting money away until we could buy a home. Now we have moved onto the standard boring investment strategies that should give a nominal rate of return (not looking for anything massive). After this, as mentioned, rental income might be next.
• revisa 5y ago
  Stake Hex . com which is certificate of deposit. Average person receives 40% APR but varies according to how long you stake.
• HockeyPlayer 5y ago
  Buying real estate for short-term or long-term rentals is buying yourself a second job. If you want something more passive, consider investing in several different real estate syndications. You can find them on CrowdStreet or FundRise although I believe you will get into better deals if you join a local investor group and learn from the experienced members. If there isn't a group near you, I'm enjoying participating in www.506investorgroup.com This style is probably only practical if you already have a net worth of at least $1m. The best book I've found is Investing in Real Estate Private Equity by Sean Cook. I think it is reasonable to expect a diversified portfolio of real estate syndications to return 10-15% annually although it will be bumpy and your money will be locked up for years.
  • dangus 5y ago
    Sincere question: why is this better than going with the vast array of mutual funds and ETFs available? Is it the return rate? Something else? It seems like your typical ETF or mutual fund is easier to get into and get out of, just a few clicks on your brokerage of choice. Your answer brought up the obvious general answer: the only way to make passive income from investments is to already have a lot of money. To me there's a point where the method of investment almost seems like an irrelevant detail.
    • chillacy 5y ago
      I looked into syndication and commercial real estate earlier this year. My primary motivation was to diversify my holdings. I ultimately bought a house where I could rent rooms out on airbnb or to renters instead of going with a syndication. The main factor was getting leverage: a 30 year mortgage at 2.8% APY is basically free money. Airbnb is not passive, but I look at it this way: I'm going to live in a house anyways, I might as well get into the business of living.
      • reasonabl_human 5y ago
        This is what a lot of folks are missing- real estate investment returns aren’t necessarily higher than other vehicles but the leverage is awesome.
• aklemm 5y ago
  Use first principles to consider the likelihood of such a thing even existing.
• ww520 5y ago
  If you want really passive income, try municipal bonds, most are tax free at Federal and state level.
• hereme888 5y ago
  Buy crypto, and lend it at 20-1000% apy using something like harvest.finance
  • xtracto 5y ago
    That looks quite risky https://news.bitcoin.com/defi-protocol-harvest-finance-hacked-for-24-million-attacker-returns-2-5-million/ https://news.bitcoin.com/defi-protocol-harvest-finance-hacke...
    • hereme888 5y ago
      Can't argue against that. I'll read up more on it since I plan to start using DeFi investments in the near future.
• HashBasher 5y ago
  IMO "passive income" has been hyped a lot by the pyramid scheme folks. If you have an income, you don't need another source of passive income, you need to save your money and invest it. For me, Bitcoin has been the only investment that I've focused on. It is the most scarce asset and will continue to increase in price simply because of the growing demand and limited supply. Just throw a percentage of your income into bitcoin and leave it alone.
  • Gustomaximus 5y ago
    Ive not put money into crypto as I dont see the real value/future while recognising I could be completely wrong and many people smarter than me believe otherwise. But my logic to this is; 1) People need to consider the government, they make billions from domestic currency plus use it as a key tool to control the economy. Once these 2 facets are being affected do you think the government will not have resistance? Maybe not if its pervaded into society and has political backlash but there has to be political pushback at some point as govt will not want to let these go. For example some people say Libya war was in part over Gadhafi trying to move away from the dollar to a Afro-dollar 2) My understanding is bitcoin is limited by choice and not absolute. Bitcoins protocol can be updated and as time goes on there will likely be pressure to do so, and with this comes rise as if the wrong decisions are made it could be bad. 3) Crime and terrorism will likely take away the anonymity benefit. Like this recent oil pipeline hack, they wanted bitcoin payment. Once it gets linked more to terrorism, fraud and crimes like paedophile rings there is going to be huge pressure to regulate away the anonymity so its likely another benefit will evaporate. 4) Generally I dont see much consumer use or growth in use. There are high transaction fees, capital gains implications, and a great alternative called money. So from a usge (not storage) view there is little incentive to come across to bitcoin type currency day-to-day though I respect this one can quickly change but at the moment its more speculative value for store of wealth backs by the hope of scarcity, but as mentioned that's not absolute. 5) There is a lack of protection. If I get scammed online my credit card deals with it, or if I have shares/property there are legal systems to ensure ownership stays with me but crypto, do the wrong thing, or join the wrong exchange, you may find its all gone one day and that carries huge risk which now offers huge reward but once growth slows do you want to carry that? Generally, as I said I dont profess to be correct and recognise I may well be telling my grandkids one day when I could have bough bitcoin @$65k and been rich now but I feel when you pull back to macro view it feels more speculative/FOMO that a product of value, to me anyway.
• Trias11 5y ago
  Solid crypto projects staking
• herbst 5y ago
  When i sold my first company i built an online shop (with only a few thousand $ actually). I know thats boring and not really passive, however coming from a tech background and running a SaaS this was the first time i was making money with something i could actually touch. We do packages ~twice a week and the postal worker just takes them with him. And when i have days where i feel like compulsive shopping i just buy inventory and not shit for myself. May is harder in countries where Amazon is strong, however Marketing never really was an issue for us as we sell rather specific niche items.
• quickthrower2 5y ago
  I’m doing some eBay arbitrage for about $200 a month profit but I’m just starting. I call it arbitrage as I buy at consumer prices from a store online and sell on eBay for a profit. I profit even when paying listing fees, shipping and PayPal fees.
  • Mumps 5y ago
    how does this work in practice? do people not realize they are paying above the store price?
    • tudelo 5y ago
      I mean, people also don't go checking around every sale for items. But I would be curious to know what lengths OP goes to to identify items.
      • quickthrower2 5y ago
        Identifying is the problem. It’s usually when I think “wtf why is this more expensive on eBay” when buying something for myself. Then I check the number sold and think “oh someone is making some money here” I don’t do anything special and realise I may have got lucky with this one. I found another item like this in theory but I listed on this week and it hasn’t sold. So we will see.
    • quickthrower2 5y ago
      I think because the item is shipped from overseas not everyone wants to do that and wait the few extra days. Even though it’s ordered from a standard online shop from the brand.
  • EVa5I7bHFq9mnYK 5y ago
    It's not a passive investment.
• rakshazi 5y ago
  Mine is matrix homeservers maintenance [0], but it's not 100% passive, requires around 1-2 hours per week. Service "just started", so income is quite low for now. [0] https://etke.cc https://etke.cc
  • quickthrower2 5y ago
    You have yourself a testimonial, that made me chuckle! Being your own customer is fun though.
    • rakshazi 5y ago
      Yep, I literally my own customer, because my hs managed the same way as other customers :D Sadly, not every customer wants to post review, because of privacy. I understand them, tho
• slowhand09 5y ago
  (1) Write a book on creating income thru mostly passive investing. Get all your content from this Hacker News thread. Edit names to protect the innocent. (2) PROFIT!!!
• pknerd 5y ago
  I run a tech/programming related blog which helps me to earn both active and passive income in form of affiliate, guest posts, ads and gigs.
• BigBalli 5y ago
  ebooks, mobile apps, online services, affiliate websites... tons of options, depends on what you're into.