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A Passive Income Hacker's View on Wealth

226 points by mkrecny 13y ago

bernardom 13y ago
Great post. I wonder if there's space for an alternate Hacker News- a Passive Income Hacker News (PIHN) that works as a sort of support group for PIHs.
- mkrecny 13y ago
  love that idea.
- lucaspiller 13y ago
  I would also like to see something like this.
- phreeza 13y ago
  Quick search turned up http://www.reddit.com/r/passive_income/ http://www.reddit.com/r/passive_income/ but that seems pretty dead at the moment.
  - yeahrightdbag 13y ago
    I'm more interested in programmers who are into passive income. Too many passive income message boards are filled with mlm scams, 1 page sales ads for ebooks, etc.
    - phreeza 13y ago
      You have a point.
- andy_boot 13y ago
  There is the micropreneur academy but it is a subscription product. http://academy.micropreneur.com/wp-login.php http://academy.micropreneur.com/wp-login.php
  - rgrieselhuber 13y ago
    But of course it is.
- cotsog 13y ago
  http://www.reddit.com/r/pihackers http://www.reddit.com/r/pihackers and http://www.reddit.com/r/passiveincomehackers http://www.reddit.com/r/passiveincomehackers were created not long after (same day perhaps?) the inaugural passive income hacker post i.e. https://news.ycombinator.com/item?id=6108092 https://news.ycombinator.com/item?id=6108092
ronilan 13y ago
If you care about anything or anyone then you have obligations. Such obligations are not liabilities. These are assets. The entire conceptual optimization offered is false.
- rhema 13y ago
  Obligations are only assets insomuch as they provide value to both parties. Interdependency can be a stabilizing and beneficial force, but working 12 hours a day on end is bad for everybody. It's not sustainable.
- mkrecny 13y ago
  I'm not claiming that obligations are liabilities. Obligation in this context is the opposite concept to freedom. I readily accept that certain obligations could be considered assets.
noelwelsh 13y ago
I was waiting for the pitch at the end, but it didn't appear. Other than that it's a straight forward restatement of what others have said already. The problem with these types of posts is that they make it seem like passive income is easy. In fact it is a hell of a lot of work to create, say, an info product, and marketing it can also be a full-time job. You need to have surplus income and time to take on the risk of doing this, which is hard to do if you're an employee. This probably explains why most of the passive income stuff we read on HN comes from consultants.
- jonaldomo 13y ago
  I agree with this, I reread it wondering if I had missed it.
- jasonkester 13y ago
  Seems like you have your answer then: don't build an info product. Build a product product. With customers. It will only ever be a full time job if you work on it full time. Since it's your company, you get to choose the hours you work, so you can make your lifestyle look however you want it to look. So yes, it may in fact be a hell of a lot of work. But fortunately you possess a hell of a lot of time before you die. Divvy it up any way you choose, but please don't give up because it takes effort. The end result is really nice.
  - noelwelsh 13y ago
    I am building a product product. It has customers. It is a heck of a lot of work. (I'm also building an info product.) It may be surprising to you that my customers actually don't care how many hours I want to work, but only about the value I deliver to them. I don't get to wave a magic wand and work 10 hours a week and keep all my customers, though I'm sure my competitors would wish I tried. The place I see "lifestyle businesses" working best is where the market is unattractive to larger competitors due to size, difficulty reaching clients or others. There only select markets where this is the case. Look, I love all the lifestyle business stuff and I'm adopting some of the tactics myself, but the suggestion of this article and your comment that the hours you work is solely a matter of choice is bullshit. You have to give up something, normally money or proximity to family and friends. Or put it a lot of work upfront building a business that you can then coast on.
jasonkester 13y ago
That's a nice way to think about it. Looking back at the big "travelling phase" in my 30s, there were lots of years where I only grossed between $10,000 and $20,000 for the year. That was plenty, though, to spend most of the year living out of a backpack on some remote tropical beach. A lot of it actually ended up in savings. That was contracting, so I needed to come back to LA to refill the travelling stack. It doesn't take much work to pivot that into a SaaS product or two that replaces the same amount of income. Again, maximising for free time and flexibility with profit being a nice side effect. Then it gets really good.
- andreipop 13y ago
  Curious what you learned from this experience, how old you are, and what you're doing now.
  - effekt 13y ago
    I'm also interested in this, but I'd be more interested in how you can live at a tropical beach on $10k/y.
    - pault 13y ago
      Central America, SE Asia.
    - Buzaga 13y ago
      Brazil is one of the most expensive countries around central/latin america and there's plenty of people living(maybe not living well) with this kind of salary, that on the economic centers, I believe there's plenty of beach cities(e.g.: in the northeast) that have ridiculous low costs of living because there's not much for the local economy to revolve at, only commerce, small biz, leisure and tourism so people make a little but live good lifes at a slower pace and if you've got a near-big-city-like income, or remote thing it's like you're rich if you go to a place like this...
    - byoung2 13y ago
      My wife and I just bought an oceanfront condo in the Philippines for $60k. That is at the higher end of the range, because we wanted to be in Metro Manila. You could get a place at a fraction of this price if you went to a smaller city province like Cebu or Bohol.
josscrowcroft 13y ago
Beautiful post, thank you! Love the idea of a 3-dimensional matrix. It really is that complicated, and simple. Harder than you thought it would be, but easier than most just-starting-out passive-earners would expect, if that makes sense.
- mkrecny 13y ago
  thank you :-)
6ren 13y ago
Your personal value is not how much you take, but how much you give. You are a resource. Some resources are richer than others.
walshemj 13y ago
Can we have a moratorium on calling dodgy ebook sellers mlm scam artists and doddgy time share sales men hackers
- kybernetyk 13y ago
  That ship sailed a long time ago when we started calling marketers and salespeople "growth hackers". Nowadays everyone is a hacker in some way. But honestly - who cares? Just ignore it if it upsets you (I do).
  - walshemj 13y ago
    yeh but i don't want to see mlm and make money fast dodgy people on HN.
toddsiegel 13y ago
This is not a PIH vs. VC funded startup issue, except that this seems to be part of an ongoing flamewar between people from both communities. You can achieve the same balance and freedom with a part-time job, freelancing, as a PIH (although I don't think the OP actually earns passive income in the accounting sense) or some other work arrangement. What's most important to have the kind of freedom that the OP describes is to first have a relationship with money that supports it.
dsschnau 13y ago
They make it sound so easy. I'm holding down a full-time job and raising a son with my fiancee. I've only got 2.5 years experience programming, but I'm getting up an hour early to hack on side projects, hoping to get some of this mythical passive income that people talk about like its so easy. I can code/debug for a corporate in my sleep but creating entire products on one's own is a whole different ball game. I'm tired of these articles making it sound _so easy_.
- jmduke 13y ago
  I'd say two things: 1. You've touched on the hardest part about consulting/side projects. The idea of freedom to code on whatever you want to is slightly shrouded in myth because so little of it has to do with code: marketing, bizdev, and even accounting/forecasting are all handled by you, the VP of Marketing and CFO of Dsschnau, Inc. It's like exercising a muscle group for the first time: it's incredibly difficult, but you get much better at it much quicker than you expect. (You also get a new level of appreciation for all those silly marketing types.) 2. Any post about financial/personal freedom is generally geared towards a early-20's male hacker who doesn't have a family to support. It's an entirely different ball game: the value proposition suddenly gets a lot more complex than "welp, if I can't sell X subscriptions/bill out for $Y I guess I'm eating ramen this month.'
  - mkrecny 13y ago
    OP here - totally agree with both, and sorry that my posts thus far haven't acknowledged that the focus shifts so drastically from programming to marketing, bizdev, accounting etc. It certainly does and it can be really rewarding. Also regarding #2 - yes ... I'm 25 and male.
  - dsschnau 13y ago
    Thanks for the validation on this. I suppose it is easier without other responsibilities.
noname123 13y ago
I've had friends who tried to go the start-up route and didn't pan out; so they decided to do some affiliate marketing with Google Adwords, that didn't pan out. Then they tried to build a SaaS for developers to help with their development, designers to manage their CMS. So far, they haven't seen a dime. The only one success story I've heard said Google screwed up his search result ranking, so it only lasted about a year of supplementing 15% of his full-time job income. I'd love to hear some passive income hacker (PIH) failures, risk & reward, opportunity cost in terms of time spent on your own venture vs. spent on climbing the corporate ladder and vs. traditional passive income paths say, becoming a slum lord, dividend investing etc.
- minimax 13y ago
  Good point. There does seem to be a lot of survivorship bias built into the outlook espoused in the original post.
- _delirium 13y ago
  Just some aggregate numbers on how many people are doing it successfully in different niches would be interesting, to calibrate whether we're talking about ecosystems that sustain a handful of people, thousands of people, tens of thousands, hundreds of thousands, or millions. In a previous discussion about making a living from Android apps, I asked if anyone had numbers on how many people successfully do so [1]. I received several responses arguing that quite a few people do make a living that way, but I still haven't been able to find any solid numbers, even an order-of-magnitude estimate (does Google release enough data to make such an estimate possible?). [1] https://news.ycombinator.com/item?id=6108491 https://news.ycombinator.com/item?id=6108491
- unlucky 13y ago
  I did affiliate marketing for about 10 months total. This was starting with not even knowing what affiliate marketing was, to making $200+ a day completely passive from ads. When the ad campaigns worked, it was one of the best feelings in the world. It is very hard to replicate the satisfaction of waking up and knowing that you had already made half your income for the day while still asleep. The problem is with any "easy" money like this is that there is no consistency. Like most ad campaigns, the fuel behind them runs out. You are constantly having to come up with new ideas, that in which most will fail. I would say less than 10% of your work is directly profitable (just due to testing and failed ad campaigns.) So while I did have "passive" income for moments at a time, it wasn't truly "passive" because I would constantly be preparing for my next campaign. The stress that can come with the down time of not having any campaigns hitting can be brutal. I would never do affiliate marketing again, but the taste of passive income was enough for me to completely realign my goals towards it. For me, it's not about the top end number anymore, its about the consistent one.
zobzu 13y ago
so this basically mean you gotta take the spot of the actually rich people (ie the top 0.5%) of the planet, which don't need to work. This takes a lot of luck, in general (more than work) or/and a lot of ruse and malice. Otherwise, if everyone just end up being a founder, it obviously doesn't work either. You need minions to do the actual work. If you don't wanna be a minion anymore, someone else has to be. Never ending loop.
mixmixmix 13y ago
I've been traveling full time for the past 5-6 years ever since leaving a full time job in Silicon Valley. I've lived pretty much all over the world (now based in Eastern Europe). I probably only make about $20-$25k a year off a few low maintenance projects, taking up random contracting gigs when I feel like. The experience of seeing new places and meeting new people is priceless. No amount of money, equity or incentives can ever make up for that. If I could change one thing, it would've been quitting my full time job even earlier.
- mkrecny 13y ago
  Awesome to hear that. Would love to hear more about what settling in Eastern Europe is like.
  - mixmixmix 13y ago
    I'm in Lithuania now. It's absolutely great. Friendly people, fast internet, (30-50MBps). And much cheaper than SF/NY. Absolutely no regrets.
- Zaheer 13y ago
  Do you mind sharing some of your projects (even if its by PM)? In college right now and desiring a very similar lifestyle - trying to figure out how to translate my current PI niche into something more substantial.
  - codonaut 13y ago
    Seconded-- Any and all advice that can help lead to a low-cost, low-earning travel lifestyle would be much appreciated!
  - joonix 13y ago
    I'm not sure why people ask what people's profitable projects are. Do you expect to just copy the idea? If so, why would they tell you? If not, what's the point of knowing what it is?
basicallydan 13y ago
But if you're interested in pursuing passive income, you probably have a different view of what constitutes wealth. I have the same view of wealth as you and I am a programmer at a startup. I wasn't hugely interested in this but now I am.
resu 13y ago
All these posts about 'Passive Income Hackers' and I have yet to see any mention of what a reader of these articles could do to become one. "That's a shame, because as a programmer in the 21st Century, you're in a unique position to do something that most people simply can't; live a life with adequate income, lots of time and total freedom over what you do with it." That sounds great, but how?
- mkrecny 13y ago
  OP here. I'll be getting to that in subsequent posts. Here's my mailing list: http://visitor.r20.constantcontact.com/manage/optin/ea?v=001xzhc59f6LQ_eTSA9m3uKLQ%3D%3D http://visitor.r20.constantcontact.com/manage/optin/ea?v=001... I only spam you once or twice a month.
  - resu 13y ago
    Thanks, looking forward to reading it!
- snoonan 13y ago
  I did an AMA on reddit in /r/entrepreneur a few months back. I was asked to break down how I did one part of my passive income business (online technical courses). Here's a link to the blog I setup for them. http://www.productcourse.com/ http://www.productcourse.com/ There's nothing for sale there and I don't talk about niches. I also don't talk about my online service business, but you can extrapolate similar product creation and marketing approaches.
- rmc 13y ago
  Read patio11's blog: http://www.kalzumeus.com/blog/ http://www.kalzumeus.com/blog/ http://www.kalzumeus.com/greatest-hits/ http://www.kalzumeus.com/greatest-hits/
  - resu 13y ago
    Very good reads, bookmarked! Thanks for pointing them out
dangoldin 13y ago
Even if passive income is easy, it's not for everyone. I've been doing consulting work the past couple of months and can have 1-2 days of straight work pay for my entire week. Unfortunately, the free time isn't as fun as you'd think since almost everyone I know is working full time jobs. Maybe I'm more social than most but having free time without being able to enjoy it with others isn't something to strive for.
dev_jim 13y ago
All of these passive income stories fall into three buckets: 1) The passive income these people generate is from selling suckers who want to believe in free money a book for $9.95. 2) Their definition of a good passive income is at or near the poverty line in the U.S (That mustache guy?). That's fine, there's nothing wrong with that, but it's not the life most people want to live. 3) The person got massively lucky with a startup (lots of hours invested there) or real estate and think that idea is easily translatable into a few blog posts. These stories are all survivorship bias and don't account the 1,000 people who failed. Everyone wants to believe that there's a free lunch out there. That's why scams like stock trading apps, time shares, ponzi home marketing schemes, etc. are so prevalent.
- snoonan 13y ago
  This is not accurate. A lot of people fail, that's true. So do a lot of people drop out of CS programs and never achieve their goal of becoming a lawyer or doctor. On the "all the stories" part, there are a couple of things here worth teasoing out. First, it is worth separating out the information marketers, affiliate marketers and SaaS, etc. They're different businesses. Second, the public success stories go through a spin cycle, but there are many more quiet successes that never get above the radar. Why? Niches are small and take a single human's effort to capture. No need to publicize that you're pulling in $300k/yr doing this specific thing in this specific way 1000 other people here could do. Many are a winner take all and you'd have to be a complete idiot to share. That's like posting your credit card number on the web. I am not going to tell anyone here what I do, but I will be happy to share how it impacts my life. So that's why it feels that way. The actual reality is very different.
  - unlucky 13y ago
    In affiliate marketing, the only time methods are shared is if they have been dried up for months or years before by the author. I never shared any of my methods until I knew they were no longer valid.
  - brucehart 13y ago
    You are absolutely right about the small niches. What the public hears about is a tiny fraction of the successes (and failures) that are actually out there. If you are lucky enough to find a profitable niche then you don't invite competition to take it away from you. There are several examples that I personally know about that have never been shared with the public. One example is a personal friend of mine. He developed a B2C software product for a particular niche that you wouldn't think was very large or profitable. He doesn't talk about what he does publicly or even read entrepreneur sites like Hacker News. If someone were to show me his app and ask me how long it would take for me to develop it I would say "three weeks: two to code it and one more to make it that ugly". And yet this guy makes a ton of money (much more than a typical software engineer) essentially for just handling the occasional support or billing issue. Another example was a guy I worked for in college in the early 2000s. He got in early in the business sending out e-mail newsletters for professional organizations. He bought a license of a high-end e-mail program for about $15k, bought about $5k in server hardware and spent about $750/mo. in co-location fees. Then he hired me and another college student to work remotely part-time at $15-$20/hr. to handle the server administration and support. Add all that up and his total costs were about $20k up front and $2500/mo. The only work he would do is go to conferences a couple times a year and do a couple of sales calls a month. He generally kept the details of his financials hidden from me, but I know that at least a couple of his clients were paying over $5000/mo. each. When you consider he had a couple dozen organizations as customers, that is very impressive for something that is almost completely passive with no technical skills required.
ZiadHilal 13y ago
I am a passive income hacker, here are my thoughts: Studied CS at university for 2 years, dropped out to pursue an idea. After a couple years of work, I was bringing in 20k a month. It was the most incredible time of my life. It lasted for 7 years before it hit the bottom. During that time I spent my days playing beach volleyball, tennis, golf, skateboarding, gaming, girls, beautiful car/apartment, the life in Santa Monica CA! I wasn't the least bit afraid when the project/business started slowing down. I decided to launch two more ideas - BOTH FAILED. At that point I was burnt out and was running low on savings. I had no other choice but find employment. In my mind, I failed and lost everything. It hurt me for years, and still hurts me to this day. While I have a great job, the feeling of imprisonment and failure is always with me. Eventually I got the strength to work on another idea during weekends and late nights. That gives you very little time, especially when you have a demanding job. It took over the course of a year to launch this new idea and it's not working out the way I hoped it would. Call it what you want, but in my mind that's three failures in a row. I've learned that luck and timing are definitely part of the equation. I've learned that you can spend year after year obsessed with coding your ideas and end up with only the knowledge. It's extremely tough and taxing to go down this route. Be prepared to fail multiple times. Be prepared to lose every cent of your savings. I know I'll continue trying, hopefully one day I'll come back on top again :)
- mkrecny 13y ago
  OP here. Awesome story - thanks for sharing. I really hope you get back to where you were. Best of luck.
- wiradikusuma 13y ago
  May I know what's the idea that made you "retire early"? Have you ever thought, "Should have put the money into saving, should have seen it coming"?
  - ZiadHilal 13y ago
    I created a CMS that did user integration with message boards, there were few to none at the time. I made many mistakes, the biggest ones were: 1) Having hit a relatively high success at 21, I felt indestructible. I had no fear of spending most of my income on entertainment. I knew nothing about budgeting, I should have saved. 2) Towards the end, I definitely spent too much time having fun and ignoring the product. When you're on a high roll for so many years, you feel invincible. The decline started gradually, but in my mind I always believed I could easily bring everything back on top. At the end, I repeatedly did everything in my power to save the product but it was too late.
ironch456 13y ago
Every ounce of energy you put into a side project comes from your main job and is carved out of your free time and peace of mind. Period. I used to think I could just contract on the side and make some good money. I did that for about 7 months...but every day you come home wanting to mentally relax...guess what? More work! Your weekends? More work too! Everyone has deadlines at their main job...now you have two deadlines! Deadlines when you are at work and deadlines when you get home. I ultimately decided to never take any more side work (which might lead to passive income) simply because the mental toll it takes is harsh. Money is sort of not really just lying around on the ground...if it were that easy, some hacker in Russia who is out of work would figure out how to get it before you simply because they are desperate and you are just sort of doing this as a hobby. Real success requires being pathologically driven to beat everyone or having some kind of advantage of everyone else. I work with a very smart engineer who runs a full on side business which nets him a good amount of money. His day-to-day motivation is noticeably less than everyone else and his output is less...because he is dividing his time between work, side work, a child, a wife etc. He eventually just announced he was leaving to do his side project. Yes you can do side work, but if you are any kind of regular adult your side projects will all be temporary unless you are willing to quit for them. The mental toll adds up.
philfreo 13y ago
The myth that all startups make their employees work 7 12 hour days every week, pay them way under market rate, and that there's no flexibility for time off or travel is pretty silly. Do you work extra hard at startups? Of course. But in my experience startups are more flexible in terms of working remotely while traveling and freedom in letting people work on parts of the business they are interested in. And maybe I'm the exception, but I've been able to take a lot of weekends off - it helps me be more productive during the week.
- coldtea 13y ago
  >And maybe I'm the exception, but I've been able to take a lot of weekends off Saying that as if it's some kind of feat actually reinforces the whole "startups make their employees work 7 12 hour days every week" thesis. Aren't you SUPPOSED to take the weekends off?
crazy1van 13y ago
I like this article more than the typical PI article because he clearly states that there is a trade off. Want more freedom? Be prepared to accept less money. I don't understand some of the criticism in these comments. He never claims there's a free lunch to be had here.
epoxyhockey 13y ago
My 2 cents: Passive income - To echo many other entrepreneurs in this thread, successful passive income does contain a healthy portion of timing and luck. - Passive income also requires a lot of optimization and making slight changes to improve performance, adjusting to new trends over time. - Passive income is a lot about running a business and exploiting opportunities. For example, cold-calling a non-tech-savvy mom & pop store to become a partner in your online venture. - One good passive income generator is not enough for the long-haul. One will need 3 - 5 different niches to be comfortable for many years to come. There is lots of volatility and some niches will eventually fail. - The only real passive thing about passive income is that your websites are running while you sleep. There is always day-to-day work. Finding new opportunities - Once you find a good niche and quit your day job, you will try to create new businesses in other niches and fail dozens of times. It may take 2 - 3 years to find or create another viable niche or business. This can be soul-crushing if your expectations are not set. However, all of the tech created in those failures will come in use in the future. - My [current] most successful way of finding new opportunities is to do contracting work for small businesses. They always have lots of problems and deep knowledge of their niche. Keep a conversation going with those small businesses and start creating solutions for them.
- sledmonkey 13y ago
  > One good passive income generator is not enough for the long-haul. One will need 3 - 5 different niches to be comfortable for many years to come. There is lots of volatility and some niches will eventually fail. I learned this the hard way. I had a great passive income site that was at one point making $12k a month. Spent more time tweaking text and other (in hindsight) trivial things than finding other passive income methods and when the gravy train failed I didn't have anything to fall back on.
gadders 13y ago
Offtopic, but is the blog meant to be accessible or designed for people with poor eyesight? The font is enormous and only 4-5 words fit on each line. The column width should be at least doubled.
- beat 13y ago
  Elsewhere on his blog, he mentions that he has very poor eyesight. He probably designed it for himself.
  - gadders 13y ago
    Well then fair enough.
michaelochurch 13y ago
There's a false adversary here, in the 12-hour days and 7-day weeks associated with startups. If you're not a founder, don't work more than 40-- possibly 50 on occasion but only for a project that benefits your career in a major way. Giving your all to a company in exchange for 0.02% of something without a well-defined value is a chump's game. On the other hand, most passive income material smells more like an old-fashioned pyramid scheme than anyone else. Yes, there are terrible startups out there that expect extreme hours. It's easier to leave one of those, and get a better job, than it is to generate a passive income stream from that point. Take the first step first. Get a better job first. Get some security and sanity in your life. Then, start to think about passive income. It's hard to come up with good ideas when there's a gun in your face, which means that having a really bad job (e.g. the 84-hour-per-week startup gig) will make it almost impossible to build something that people will pay for. However, I wouldn't advise quitting wholesale for most people; if you end up with no job, then you have a different gun in your face, which is that you're rapidly running out of money. I'm not going to argue that it's easy to generate passive income while working full-time; only that it's not easier for most people to just quit their day jobs and "magically" come up with the golden iPad app.
kybernetyk 13y ago
Hmm, I guess many people have a false definition of 'passive' in mind. It's not like "build something and it will make you money forever" - it's rather like "Build something and for the time you build another thing it will make you money. But then go back and put some more work into it or it will die". Passive income sources always dry up if you don't put constant work into them. I never had one last longer than 2 years without working on it from time to time. To me the prototypical passive income model is a software product. Once you get it out you can reap revenue for one or maybe two years without much additional work. But after that you better release an update.
- codex 13y ago
  Doesn't this describe every scalable business?
dicroce 13y ago
Here's what I've tried: 1) Built a website that let people send USPS (real) mail, from the website. 0 sales. 2) During the social news height, built a digg like social news website with a coworker. Never used by anyone outside of those I work with. 3) Built a custom trail mix website (still running, making regular sales.... barely profitable...). I've been building sites for years, and I'm starting to think that my focus should be on what I'm really good at: C/C++ software (instead of trendy websites). I've been obsessed with the idea of finding an underserved vertical, and taking my knowledge of machine learning and analytics and building some game changing software for that niche. The only issues I have is: what niche?
peter303 13y ago
There is a difference between wealthy and financially independent. FI is have about 20 times or more your annual exenses saved up. Except for deep recessions you could live off an income stream from that. If you got a good job and are frugal you might reach that stage in a decade as I did. faster if you start a successful business. Wealthy means few constraints on lifestyle. travel where you. Buy most of the stuff you want.
caliix 13y ago
"As at all times, so now too, men are divided into the slaves and the free; for he who does not have two-thirds of his day to himself is a slave, let him be what he may otherwise: statesman, businessman, official, scholar." ~Nietzsche
gordonbowman 13y ago
Counter point: http://www.forbes.com/sites/michaelellsberg/2011/06/24/the-top-4-reasons-why-passive-income-is-a-dangerous-fantasy/ http://www.forbes.com/sites/michaelellsberg/2011/06/24/the-t...

226 points by mkrecny 13y ago

Great post. I wonder if there's space for an alternate Hacker News- a Passive Income Hacker News (PIHN) that works as a sort of support group for PIHs.

mkrecny 13y ago
love that idea.
lucaspiller 13y ago
I would also like to see something like this.
phreeza 13y ago
Quick search turned up http://www.reddit.com/r/passive_income/ http://www.reddit.com/r/passive_income/ but that seems pretty dead at the moment.
- yeahrightdbag 13y ago
  I'm more interested in programmers who are into passive income. Too many passive income message boards are filled with mlm scams, 1 page sales ads for ebooks, etc.
  - phreeza 13y ago
    You have a point.
andy_boot 13y ago
There is the micropreneur academy but it is a subscription product. http://academy.micropreneur.com/wp-login.php http://academy.micropreneur.com/wp-login.php
- rgrieselhuber 13y ago
  But of course it is.
cotsog 13y ago
http://www.reddit.com/r/pihackers http://www.reddit.com/r/pihackers and http://www.reddit.com/r/passiveincomehackers http://www.reddit.com/r/passiveincomehackers were created not long after (same day perhaps?) the inaugural passive income hacker post i.e. https://news.ycombinator.com/item?id=6108092 https://news.ycombinator.com/item?id=6108092

ronilan 13y ago

If you care about anything or anyone then you have obligations. Such obligations are not liabilities. These are assets. The entire conceptual optimization offered is false.

rhema 13y ago
Obligations are only assets insomuch as they provide value to both parties. Interdependency can be a stabilizing and beneficial force, but working 12 hours a day on end is bad for everybody. It's not sustainable.
mkrecny 13y ago
I'm not claiming that obligations are liabilities. Obligation in this context is the opposite concept to freedom. I readily accept that certain obligations could be considered assets.

noelwelsh 13y ago

I was waiting for the pitch at the end, but it didn't appear. Other than that it's a straight forward restatement of what others have said already. The problem with these types of posts is that they make it seem like passive income is easy. In fact it is a hell of a lot of work to create, say, an info product, and marketing it can also be a full-time job. You need to have surplus income and time to take on the risk of doing this, which is hard to do if you're an employee. This probably explains why most of the passive income stuff we read on HN comes from consultants.

jonaldomo 13y ago
I agree with this, I reread it wondering if I had missed it.
jasonkester 13y ago
Seems like you have your answer then: don't build an info product. Build a product product. With customers. It will only ever be a full time job if you work on it full time. Since it's your company, you get to choose the hours you work, so you can make your lifestyle look however you want it to look. So yes, it may in fact be a hell of a lot of work. But fortunately you possess a hell of a lot of time before you die. Divvy it up any way you choose, but please don't give up because it takes effort. The end result is really nice.
- noelwelsh 13y ago
  I am building a product product. It has customers. It is a heck of a lot of work. (I'm also building an info product.) It may be surprising to you that my customers actually don't care how many hours I want to work, but only about the value I deliver to them. I don't get to wave a magic wand and work 10 hours a week and keep all my customers, though I'm sure my competitors would wish I tried. The place I see "lifestyle businesses" working best is where the market is unattractive to larger competitors due to size, difficulty reaching clients or others. There only select markets where this is the case. Look, I love all the lifestyle business stuff and I'm adopting some of the tactics myself, but the suggestion of this article and your comment that the hours you work is solely a matter of choice is bullshit. You have to give up something, normally money or proximity to family and friends. Or put it a lot of work upfront building a business that you can then coast on.

jasonkester 13y ago

That's a nice way to think about it. Looking back at the big "travelling phase" in my 30s, there were lots of years where I only grossed between $10,000 and $20,000 for the year. That was plenty, though, to spend most of the year living out of a backpack on some remote tropical beach. A lot of it actually ended up in savings. That was contracting, so I needed to come back to LA to refill the travelling stack. It doesn't take much work to pivot that into a SaaS product or two that replaces the same amount of income. Again, maximising for free time and flexibility with profit being a nice side effect. Then it gets really good.

andreipop 13y ago
Curious what you learned from this experience, how old you are, and what you're doing now.
- effekt 13y ago
  I'm also interested in this, but I'd be more interested in how you can live at a tropical beach on $10k/y.
  - pault 13y ago
    Central America, SE Asia.
  - Buzaga 13y ago
    Brazil is one of the most expensive countries around central/latin america and there's plenty of people living(maybe not living well) with this kind of salary, that on the economic centers, I believe there's plenty of beach cities(e.g.: in the northeast) that have ridiculous low costs of living because there's not much for the local economy to revolve at, only commerce, small biz, leisure and tourism so people make a little but live good lifes at a slower pace and if you've got a near-big-city-like income, or remote thing it's like you're rich if you go to a place like this...
  - byoung2 13y ago
    My wife and I just bought an oceanfront condo in the Philippines for $60k. That is at the higher end of the range, because we wanted to be in Metro Manila. You could get a place at a fraction of this price if you went to a smaller city province like Cebu or Bohol.

josscrowcroft 13y ago

Beautiful post, thank you! Love the idea of a 3-dimensional matrix. It really is that complicated, and simple. Harder than you thought it would be, but easier than most just-starting-out passive-earners would expect, if that makes sense.

mkrecny 13y ago
thank you :-)

6ren 13y ago

Your personal value is not how much you take, but how much you give. You are a resource. Some resources are richer than others.

walshemj 13y ago

Can we have a moratorium on calling dodgy ebook sellers mlm scam artists and doddgy time share sales men hackers

kybernetyk 13y ago
That ship sailed a long time ago when we started calling marketers and salespeople "growth hackers". Nowadays everyone is a hacker in some way. But honestly - who cares? Just ignore it if it upsets you (I do).
- walshemj 13y ago
  yeh but i don't want to see mlm and make money fast dodgy people on HN.

toddsiegel 13y ago

This is not a PIH vs. VC funded startup issue, except that this seems to be part of an ongoing flamewar between people from both communities. You can achieve the same balance and freedom with a part-time job, freelancing, as a PIH (although I don't think the OP actually earns passive income in the accounting sense) or some other work arrangement. What's most important to have the kind of freedom that the OP describes is to first have a relationship with money that supports it.

dsschnau 13y ago

They make it sound so easy. I'm holding down a full-time job and raising a son with my fiancee. I've only got 2.5 years experience programming, but I'm getting up an hour early to hack on side projects, hoping to get some of this mythical passive income that people talk about like its so easy. I can code/debug for a corporate in my sleep but creating entire products on one's own is a whole different ball game. I'm tired of these articles making it sound _so easy_.

jmduke 13y ago
I'd say two things: 1. You've touched on the hardest part about consulting/side projects. The idea of freedom to code on whatever you want to is slightly shrouded in myth because so little of it has to do with code: marketing, bizdev, and even accounting/forecasting are all handled by you, the VP of Marketing and CFO of Dsschnau, Inc. It's like exercising a muscle group for the first time: it's incredibly difficult, but you get much better at it much quicker than you expect. (You also get a new level of appreciation for all those silly marketing types.) 2. Any post about financial/personal freedom is generally geared towards a early-20's male hacker who doesn't have a family to support. It's an entirely different ball game: the value proposition suddenly gets a lot more complex than "welp, if I can't sell X subscriptions/bill out for $Y I guess I'm eating ramen this month.'
- mkrecny 13y ago
  OP here - totally agree with both, and sorry that my posts thus far haven't acknowledged that the focus shifts so drastically from programming to marketing, bizdev, accounting etc. It certainly does and it can be really rewarding. Also regarding #2 - yes ... I'm 25 and male.
- dsschnau 13y ago
  Thanks for the validation on this. I suppose it is easier without other responsibilities.

noname123 13y ago

I've had friends who tried to go the start-up route and didn't pan out; so they decided to do some affiliate marketing with Google Adwords, that didn't pan out. Then they tried to build a SaaS for developers to help with their development, designers to manage their CMS. So far, they haven't seen a dime. The only one success story I've heard said Google screwed up his search result ranking, so it only lasted about a year of supplementing 15% of his full-time job income. I'd love to hear some passive income hacker (PIH) failures, risk & reward, opportunity cost in terms of time spent on your own venture vs. spent on climbing the corporate ladder and vs. traditional passive income paths say, becoming a slum lord, dividend investing etc.

minimax 13y ago
Good point. There does seem to be a lot of survivorship bias built into the outlook espoused in the original post.
_delirium 13y ago
Just some aggregate numbers on how many people are doing it successfully in different niches would be interesting, to calibrate whether we're talking about ecosystems that sustain a handful of people, thousands of people, tens of thousands, hundreds of thousands, or millions. In a previous discussion about making a living from Android apps, I asked if anyone had numbers on how many people successfully do so [1]. I received several responses arguing that quite a few people do make a living that way, but I still haven't been able to find any solid numbers, even an order-of-magnitude estimate (does Google release enough data to make such an estimate possible?). [1] https://news.ycombinator.com/item?id=6108491 https://news.ycombinator.com/item?id=6108491
unlucky 13y ago
I did affiliate marketing for about 10 months total. This was starting with not even knowing what affiliate marketing was, to making $200+ a day completely passive from ads. When the ad campaigns worked, it was one of the best feelings in the world. It is very hard to replicate the satisfaction of waking up and knowing that you had already made half your income for the day while still asleep. The problem is with any "easy" money like this is that there is no consistency. Like most ad campaigns, the fuel behind them runs out. You are constantly having to come up with new ideas, that in which most will fail. I would say less than 10% of your work is directly profitable (just due to testing and failed ad campaigns.) So while I did have "passive" income for moments at a time, it wasn't truly "passive" because I would constantly be preparing for my next campaign. The stress that can come with the down time of not having any campaigns hitting can be brutal. I would never do affiliate marketing again, but the taste of passive income was enough for me to completely realign my goals towards it. For me, it's not about the top end number anymore, its about the consistent one.

zobzu 13y ago

so this basically mean you gotta take the spot of the actually rich people (ie the top 0.5%) of the planet, which don't need to work. This takes a lot of luck, in general (more than work) or/and a lot of ruse and malice. Otherwise, if everyone just end up being a founder, it obviously doesn't work either. You need minions to do the actual work. If you don't wanna be a minion anymore, someone else has to be. Never ending loop.

mixmixmix 13y ago

I've been traveling full time for the past 5-6 years ever since leaving a full time job in Silicon Valley. I've lived pretty much all over the world (now based in Eastern Europe). I probably only make about $20-$25k a year off a few low maintenance projects, taking up random contracting gigs when I feel like. The experience of seeing new places and meeting new people is priceless. No amount of money, equity or incentives can ever make up for that. If I could change one thing, it would've been quitting my full time job even earlier.

mkrecny 13y ago
Awesome to hear that. Would love to hear more about what settling in Eastern Europe is like.
- mixmixmix 13y ago
  I'm in Lithuania now. It's absolutely great. Friendly people, fast internet, (30-50MBps). And much cheaper than SF/NY. Absolutely no regrets.
Zaheer 13y ago
Do you mind sharing some of your projects (even if its by PM)? In college right now and desiring a very similar lifestyle - trying to figure out how to translate my current PI niche into something more substantial.
- codonaut 13y ago
  Seconded-- Any and all advice that can help lead to a low-cost, low-earning travel lifestyle would be much appreciated!
- joonix 13y ago
  I'm not sure why people ask what people's profitable projects are. Do you expect to just copy the idea? If so, why would they tell you? If not, what's the point of knowing what it is?

basicallydan 13y ago

But if you're interested in pursuing passive income, you probably have a different view of what constitutes wealth. I have the same view of wealth as you and I am a programmer at a startup. I wasn't hugely interested in this but now I am.

resu 13y ago

All these posts about 'Passive Income Hackers' and I have yet to see any mention of what a reader of these articles could do to become one. "That's a shame, because as a programmer in the 21st Century, you're in a unique position to do something that most people simply can't; live a life with adequate income, lots of time and total freedom over what you do with it." That sounds great, but how?

mkrecny 13y ago
OP here. I'll be getting to that in subsequent posts. Here's my mailing list: http://visitor.r20.constantcontact.com/manage/optin/ea?v=001xzhc59f6LQ_eTSA9m3uKLQ%3D%3D http://visitor.r20.constantcontact.com/manage/optin/ea?v=001... I only spam you once or twice a month.
- resu 13y ago
  Thanks, looking forward to reading it!
snoonan 13y ago
I did an AMA on reddit in /r/entrepreneur a few months back. I was asked to break down how I did one part of my passive income business (online technical courses). Here's a link to the blog I setup for them. http://www.productcourse.com/ http://www.productcourse.com/ There's nothing for sale there and I don't talk about niches. I also don't talk about my online service business, but you can extrapolate similar product creation and marketing approaches.
rmc 13y ago
Read patio11's blog: http://www.kalzumeus.com/blog/ http://www.kalzumeus.com/blog/ http://www.kalzumeus.com/greatest-hits/ http://www.kalzumeus.com/greatest-hits/
- resu 13y ago
  Very good reads, bookmarked! Thanks for pointing them out

dangoldin 13y ago

Even if passive income is easy, it's not for everyone. I've been doing consulting work the past couple of months and can have 1-2 days of straight work pay for my entire week. Unfortunately, the free time isn't as fun as you'd think since almost everyone I know is working full time jobs. Maybe I'm more social than most but having free time without being able to enjoy it with others isn't something to strive for.

dev_jim 13y ago

All of these passive income stories fall into three buckets: 1) The passive income these people generate is from selling suckers who want to believe in free money a book for $9.95. 2) Their definition of a good passive income is at or near the poverty line in the U.S (That mustache guy?). That's fine, there's nothing wrong with that, but it's not the life most people want to live. 3) The person got massively lucky with a startup (lots of hours invested there) or real estate and think that idea is easily translatable into a few blog posts. These stories are all survivorship bias and don't account the 1,000 people who failed. Everyone wants to believe that there's a free lunch out there. That's why scams like stock trading apps, time shares, ponzi home marketing schemes, etc. are so prevalent.

snoonan 13y ago
This is not accurate. A lot of people fail, that's true. So do a lot of people drop out of CS programs and never achieve their goal of becoming a lawyer or doctor. On the "all the stories" part, there are a couple of things here worth teasoing out. First, it is worth separating out the information marketers, affiliate marketers and SaaS, etc. They're different businesses. Second, the public success stories go through a spin cycle, but there are many more quiet successes that never get above the radar. Why? Niches are small and take a single human's effort to capture. No need to publicize that you're pulling in $300k/yr doing this specific thing in this specific way 1000 other people here could do. Many are a winner take all and you'd have to be a complete idiot to share. That's like posting your credit card number on the web. I am not going to tell anyone here what I do, but I will be happy to share how it impacts my life. So that's why it feels that way. The actual reality is very different.
- unlucky 13y ago
  In affiliate marketing, the only time methods are shared is if they have been dried up for months or years before by the author. I never shared any of my methods until I knew they were no longer valid.
- brucehart 13y ago
  You are absolutely right about the small niches. What the public hears about is a tiny fraction of the successes (and failures) that are actually out there. If you are lucky enough to find a profitable niche then you don't invite competition to take it away from you. There are several examples that I personally know about that have never been shared with the public. One example is a personal friend of mine. He developed a B2C software product for a particular niche that you wouldn't think was very large or profitable. He doesn't talk about what he does publicly or even read entrepreneur sites like Hacker News. If someone were to show me his app and ask me how long it would take for me to develop it I would say "three weeks: two to code it and one more to make it that ugly". And yet this guy makes a ton of money (much more than a typical software engineer) essentially for just handling the occasional support or billing issue. Another example was a guy I worked for in college in the early 2000s. He got in early in the business sending out e-mail newsletters for professional organizations. He bought a license of a high-end e-mail program for about $15k, bought about $5k in server hardware and spent about $750/mo. in co-location fees. Then he hired me and another college student to work remotely part-time at $15-$20/hr. to handle the server administration and support. Add all that up and his total costs were about $20k up front and $2500/mo. The only work he would do is go to conferences a couple times a year and do a couple of sales calls a month. He generally kept the details of his financials hidden from me, but I know that at least a couple of his clients were paying over $5000/mo. each. When you consider he had a couple dozen organizations as customers, that is very impressive for something that is almost completely passive with no technical skills required.

ZiadHilal 13y ago

I am a passive income hacker, here are my thoughts: Studied CS at university for 2 years, dropped out to pursue an idea. After a couple years of work, I was bringing in 20k a month. It was the most incredible time of my life. It lasted for 7 years before it hit the bottom. During that time I spent my days playing beach volleyball, tennis, golf, skateboarding, gaming, girls, beautiful car/apartment, the life in Santa Monica CA! I wasn't the least bit afraid when the project/business started slowing down. I decided to launch two more ideas - BOTH FAILED. At that point I was burnt out and was running low on savings. I had no other choice but find employment. In my mind, I failed and lost everything. It hurt me for years, and still hurts me to this day. While I have a great job, the feeling of imprisonment and failure is always with me. Eventually I got the strength to work on another idea during weekends and late nights. That gives you very little time, especially when you have a demanding job. It took over the course of a year to launch this new idea and it's not working out the way I hoped it would. Call it what you want, but in my mind that's three failures in a row. I've learned that luck and timing are definitely part of the equation. I've learned that you can spend year after year obsessed with coding your ideas and end up with only the knowledge. It's extremely tough and taxing to go down this route. Be prepared to fail multiple times. Be prepared to lose every cent of your savings. I know I'll continue trying, hopefully one day I'll come back on top again :)

mkrecny 13y ago
OP here. Awesome story - thanks for sharing. I really hope you get back to where you were. Best of luck.
wiradikusuma 13y ago
May I know what's the idea that made you "retire early"? Have you ever thought, "Should have put the money into saving, should have seen it coming"?
- ZiadHilal 13y ago
  I created a CMS that did user integration with message boards, there were few to none at the time. I made many mistakes, the biggest ones were: 1) Having hit a relatively high success at 21, I felt indestructible. I had no fear of spending most of my income on entertainment. I knew nothing about budgeting, I should have saved. 2) Towards the end, I definitely spent too much time having fun and ignoring the product. When you're on a high roll for so many years, you feel invincible. The decline started gradually, but in my mind I always believed I could easily bring everything back on top. At the end, I repeatedly did everything in my power to save the product but it was too late.

ironch456 13y ago

Every ounce of energy you put into a side project comes from your main job and is carved out of your free time and peace of mind. Period. I used to think I could just contract on the side and make some good money. I did that for about 7 months...but every day you come home wanting to mentally relax...guess what? More work! Your weekends? More work too! Everyone has deadlines at their main job...now you have two deadlines! Deadlines when you are at work and deadlines when you get home. I ultimately decided to never take any more side work (which might lead to passive income) simply because the mental toll it takes is harsh. Money is sort of not really just lying around on the ground...if it were that easy, some hacker in Russia who is out of work would figure out how to get it before you simply because they are desperate and you are just sort of doing this as a hobby. Real success requires being pathologically driven to beat everyone or having some kind of advantage of everyone else. I work with a very smart engineer who runs a full on side business which nets him a good amount of money. His day-to-day motivation is noticeably less than everyone else and his output is less...because he is dividing his time between work, side work, a child, a wife etc. He eventually just announced he was leaving to do his side project. Yes you can do side work, but if you are any kind of regular adult your side projects will all be temporary unless you are willing to quit for them. The mental toll adds up.

philfreo 13y ago

The myth that all startups make their employees work 7 12 hour days every week, pay them way under market rate, and that there's no flexibility for time off or travel is pretty silly. Do you work extra hard at startups? Of course. But in my experience startups are more flexible in terms of working remotely while traveling and freedom in letting people work on parts of the business they are interested in. And maybe I'm the exception, but I've been able to take a lot of weekends off - it helps me be more productive during the week.

coldtea 13y ago
>And maybe I'm the exception, but I've been able to take a lot of weekends off Saying that as if it's some kind of feat actually reinforces the whole "startups make their employees work 7 12 hour days every week" thesis. Aren't you SUPPOSED to take the weekends off?

crazy1van 13y ago

I like this article more than the typical PI article because he clearly states that there is a trade off. Want more freedom? Be prepared to accept less money. I don't understand some of the criticism in these comments. He never claims there's a free lunch to be had here.

epoxyhockey 13y ago

My 2 cents: Passive income - To echo many other entrepreneurs in this thread, successful passive income does contain a healthy portion of timing and luck. - Passive income also requires a lot of optimization and making slight changes to improve performance, adjusting to new trends over time. - Passive income is a lot about running a business and exploiting opportunities. For example, cold-calling a non-tech-savvy mom & pop store to become a partner in your online venture. - One good passive income generator is not enough for the long-haul. One will need 3 - 5 different niches to be comfortable for many years to come. There is lots of volatility and some niches will eventually fail. - The only real passive thing about passive income is that your websites are running while you sleep. There is always day-to-day work. Finding new opportunities - Once you find a good niche and quit your day job, you will try to create new businesses in other niches and fail dozens of times. It may take 2 - 3 years to find or create another viable niche or business. This can be soul-crushing if your expectations are not set. However, all of the tech created in those failures will come in use in the future. - My [current] most successful way of finding new opportunities is to do contracting work for small businesses. They always have lots of problems and deep knowledge of their niche. Keep a conversation going with those small businesses and start creating solutions for them.

sledmonkey 13y ago
> One good passive income generator is not enough for the long-haul. One will need 3 - 5 different niches to be comfortable for many years to come. There is lots of volatility and some niches will eventually fail. I learned this the hard way. I had a great passive income site that was at one point making $12k a month. Spent more time tweaking text and other (in hindsight) trivial things than finding other passive income methods and when the gravy train failed I didn't have anything to fall back on.

gadders 13y ago

Offtopic, but is the blog meant to be accessible or designed for people with poor eyesight? The font is enormous and only 4-5 words fit on each line. The column width should be at least doubled.

beat 13y ago
Elsewhere on his blog, he mentions that he has very poor eyesight. He probably designed it for himself.
- gadders 13y ago
  Well then fair enough.

michaelochurch 13y ago

There's a false adversary here, in the 12-hour days and 7-day weeks associated with startups. If you're not a founder, don't work more than 40-- possibly 50 on occasion but only for a project that benefits your career in a major way. Giving your all to a company in exchange for 0.02% of something without a well-defined value is a chump's game. On the other hand, most passive income material smells more like an old-fashioned pyramid scheme than anyone else. Yes, there are terrible startups out there that expect extreme hours. It's easier to leave one of those, and get a better job, than it is to generate a passive income stream from that point. Take the first step first. Get a better job first. Get some security and sanity in your life. Then, start to think about passive income. It's hard to come up with good ideas when there's a gun in your face, which means that having a really bad job (e.g. the 84-hour-per-week startup gig) will make it almost impossible to build something that people will pay for. However, I wouldn't advise quitting wholesale for most people; if you end up with no job, then you have a different gun in your face, which is that you're rapidly running out of money. I'm not going to argue that it's easy to generate passive income while working full-time; only that it's not easier for most people to just quit their day jobs and "magically" come up with the golden iPad app.

kybernetyk 13y ago

Hmm, I guess many people have a false definition of 'passive' in mind. It's not like "build something and it will make you money forever" - it's rather like "Build something and for the time you build another thing it will make you money. But then go back and put some more work into it or it will die". Passive income sources always dry up if you don't put constant work into them. I never had one last longer than 2 years without working on it from time to time. To me the prototypical passive income model is a software product. Once you get it out you can reap revenue for one or maybe two years without much additional work. But after that you better release an update.

codex 13y ago
Doesn't this describe every scalable business?

dicroce 13y ago

Here's what I've tried: 1) Built a website that let people send USPS (real) mail, from the website. 0 sales. 2) During the social news height, built a digg like social news website with a coworker. Never used by anyone outside of those I work with. 3) Built a custom trail mix website (still running, making regular sales.... barely profitable...). I've been building sites for years, and I'm starting to think that my focus should be on what I'm really good at: C/C++ software (instead of trendy websites). I've been obsessed with the idea of finding an underserved vertical, and taking my knowledge of machine learning and analytics and building some game changing software for that niche. The only issues I have is: what niche?

peter303 13y ago

There is a difference between wealthy and financially independent. FI is have about 20 times or more your annual exenses saved up. Except for deep recessions you could live off an income stream from that. If you got a good job and are frugal you might reach that stage in a decade as I did. faster if you start a successful business. Wealthy means few constraints on lifestyle. travel where you. Buy most of the stuff you want.

caliix 13y ago

"As at all times, so now too, men are divided into the slaves and the free; for he who does not have two-thirds of his day to himself is a slave, let him be what he may otherwise: statesman, businessman, official, scholar." ~Nietzsche

gordonbowman 13y ago

Counter point: http://www.forbes.com/sites/michaelellsberg/2011/06/24/the-top-4-reasons-why-passive-income-is-a-dangerous-fantasy/ http://www.forbes.com/sites/michaelellsberg/2011/06/24/the-t...