35 ms·

I generate about $1K-$2K a month in passive income. I spend approximately zero hours on maintenance every week, and I bootstrapped it while holding down a full

by codex 14y ago

I generate about $1K-$2K a month in passive income. I spend approximately zero hours on maintenance every week, and I bootstrapped it while holding down a full-time job. It took an extra 5-10 hours per week for about a year. Here's what I did: a) Got a job at a major software company for very high comp. b) Spent an extra 5-10 hours a week working intelligently at my full time job; got promoted. c) Invested the salary, bonus, and stock from my high comp. corporate job in real-estate and tech-heavy index funds, and reap the (literal) dividends passively. b) is optional; even without the promotion, I would still make enough money to generate almost all of my passive income via investments. Not bad for zero hours per week. A stable income has allowed me to buy a house at the bottom of the housing market, which will appreciate at about 1% over inflation; my other investments typically do 2-8% over inflation (especially retirement funds, which grow tax-deferred). All in all, at least $1K per month, spiking to much more. At the rate I'm continuing to invest, I'll likely double that monthly return within 18 months. Sure, this is all pretty volatile, but no more volatile than entrepreneurship, and with much better worse and average case scenarios. Best of all, these investments will, in the long term, outpace inflation, which is more than can be said for selling software or tech stuff, which tends to depreciate in price over time (after all, the marginal cost of software is zero, which depresses prices due to competitive dynamics).

cageface 14y ago
I've been saying for a long time now that people with the ability and motivation to make money in tech could probably easily do as well or better in other avenues. Tech entrepreneurship has its own rewards but on average it's hardly easy money.
WickyNilliams 14y ago
Very interesting! I've been wanting to investigate this kind of thing for a while but just don't know where to start. Can you point me to any resources that will give me a good grounding in investment? In what way did you invest in real estate? How do you choose what to invest in? Would love for some direction here, would be very much appreciated
- codex 14y ago
  My aim is actually not to spend very much time on investing. Investing is not my area of specialization and I want to enjoy a high quality of life. I take advantage of division of labor to monetize what I do best--software development. In a past life, I read many books on investing, primarily Jack Schwager's Market Wizards and my personal favorite, Reminisces of a Stock Operator. There's a lot of interesting stuff about the markets--game theory, behavioral finance--but unless you're going to spend a lot of time on it, the markets can be approximated as casinos for which you do not have an edge. Best to put your money in small and mid-cap index funds. Similarly, most consumer real estate investments take a lot of time to manage (rental properties), so I've focused on my home, something which I would have to maintain anyway. In this climate you can get a loan so cheap you're best off putting as little down as possible and investing the rest. But you may want to buy a house within the next year or so as a hedge against inflation and to take advantage of the unholy combination of low interest rates and a relatively cheap housing market. If the Euro cracks or the Fed ends up printing money, we may find ourselves in an inflationary environment. If you have a fixed rate loan, you're golden--your income will rise with inflation, but your monthly payments will not, cheapening your debts. Overall, my advice is to focus on setting up some compounding investments very early in life. Many people dabble in all kinds of things, like entrepreneurship, as a youth because they're fun. It's important to have hobbies, but for things that really matter, you can't afford to fool around. For example, I could join Y Combinator straight out of school and spend two years at a startup eating Ramen, or I could join Google and eat Ramen. If I did the latter, I'd have $50K in my 401Ks and up to $150K in other investments. Invested wisely, proceeds from those two years will give you $4M of today's dollars at retirement, even if you don't invest another penny--a nice safety net which will allow you to do riskier things later on in life. Entrepreneurship is a lottery ticket which is likely to fail. There are only so many good businesses (born of confluences of macro trends) out there, and it's hard to be in the right place at the right time. You could try to get lucky and end up scratching a living out of hardscrabbble, or you could use your talent to rise within the few companies which are actually printing money, and then let your dollars work for you.
  - WickyNilliams 14y ago
mapster 14y ago
It's less about the money and ALL about creating and building and changing. In other words, I don't want to build someone else's Lego set - I want to create my own.
- mattm 14y ago
  I think you're missing the point. The point is to spend just a few years building passive income through investments such that the dividends/distributions it throws off are enough to cover your living expenses. At that point you're free to do whatever you want and you can work on your startup or ideas without having to worry about running out of money or fragmenting your time with consulting.
  - mapster 14y ago
    I see it now, thank you.

by codex 14y ago

cageface 14y ago

I've been saying for a long time now that people with the ability and motivation to make money in tech could probably easily do as well or better in other avenues. Tech entrepreneurship has its own rewards but on average it's hardly easy money.

WickyNilliams 14y ago

Very interesting! I've been wanting to investigate this kind of thing for a while but just don't know where to start. Can you point me to any resources that will give me a good grounding in investment? In what way did you invest in real estate? How do you choose what to invest in? Would love for some direction here, would be very much appreciated

codex 14y ago
My aim is actually not to spend very much time on investing. Investing is not my area of specialization and I want to enjoy a high quality of life. I take advantage of division of labor to monetize what I do best--software development. In a past life, I read many books on investing, primarily Jack Schwager's Market Wizards and my personal favorite, Reminisces of a Stock Operator. There's a lot of interesting stuff about the markets--game theory, behavioral finance--but unless you're going to spend a lot of time on it, the markets can be approximated as casinos for which you do not have an edge. Best to put your money in small and mid-cap index funds. Similarly, most consumer real estate investments take a lot of time to manage (rental properties), so I've focused on my home, something which I would have to maintain anyway. In this climate you can get a loan so cheap you're best off putting as little down as possible and investing the rest. But you may want to buy a house within the next year or so as a hedge against inflation and to take advantage of the unholy combination of low interest rates and a relatively cheap housing market. If the Euro cracks or the Fed ends up printing money, we may find ourselves in an inflationary environment. If you have a fixed rate loan, you're golden--your income will rise with inflation, but your monthly payments will not, cheapening your debts. Overall, my advice is to focus on setting up some compounding investments very early in life. Many people dabble in all kinds of things, like entrepreneurship, as a youth because they're fun. It's important to have hobbies, but for things that really matter, you can't afford to fool around. For example, I could join Y Combinator straight out of school and spend two years at a startup eating Ramen, or I could join Google and eat Ramen. If I did the latter, I'd have $50K in my 401Ks and up to $150K in other investments. Invested wisely, proceeds from those two years will give you $4M of today's dollars at retirement, even if you don't invest another penny--a nice safety net which will allow you to do riskier things later on in life. Entrepreneurship is a lottery ticket which is likely to fail. There are only so many good businesses (born of confluences of macro trends) out there, and it's hard to be in the right place at the right time. You could try to get lucky and end up scratching a living out of hardscrabbble, or you could use your talent to rise within the few companies which are actually printing money, and then let your dollars work for you.
- WickyNilliams 14y ago

mapster 14y ago

It's less about the money and ALL about creating and building and changing. In other words, I don't want to build someone else's Lego set - I want to create my own.

mattm 14y ago
I think you're missing the point. The point is to spend just a few years building passive income through investments such that the dividends/distributions it throws off are enough to cover your living expenses. At that point you're free to do whatever you want and you can work on your startup or ideas without having to worry about running out of money or fragmenting your time with consulting.
- mapster 14y ago
  I see it now, thank you.