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Two Stories of Passive Income Excess

348 points by mkrecny 13y ago

stfu 13y ago
I hope you have asked for the agreement of both the authors to republish these stories. I wouldn't want to see hn becoming your goto place to stuff your personal blog via copy&pasting and not adding yourself a single additional thought or idea.
- willholloway 13y ago
  He's got my permission.
- ZiadHilal 13y ago
  Mine too.
  - StavrosK 13y ago
    I upvoted you just to reverse this thread so it makes less sense.
tomrod 13y ago
Sounds like passive income involves a lot of work.
- chmike 13y ago
  I would assimilate it as writing a book. Writing the book is a lot of work, but when done it becomes "passive income" in the sense that you earn money while you sleep. Consider it as the opposite of earning money by installing radios in cars. There is no money earning while you sleep.
  - snoonan 13y ago
    This is exactly what it works like in practice. Sometimes you need to write a 2nd edition or another book if you want a raise.
- kposehn 13y ago
  The "passive" aspect is having something that requires a small amount of time to maintain and runs over long periods of time with little overall attention paid to it. A good example is a PPC campaign with a static site that only needs to be checked up on once a week, at maybe 30 minutes max each time.
- snoonan 13y ago
  That's a fact, not a criticism! Anyone who says different is selling something.
OldSchool 13y ago
One pretty simple lesson: Save some of your money even if it's from passive income. Nothing lasts forever. BTW: What's up with the "only make something meaningful" propaganda lately? Nothing wrong with profits, just keep in mind that you can't outsmart the whole world forever: like arbitrage in an efficient marketplace, your low hanging fruit are eventually picked by everyone.
- gohrt 13y ago
  Of course there is something wrong with it. It is a zero-sum activity (or negative-sum, since it takes work) that moves value around instead of creating it.
- deleted 13y ago
  [deleted]
7Figures2Commas 13y ago
These stories highlight the fundamental problem with the popularized "passive income" approach: the goal is usually to support a lifestyle, not to provide value to customers. This can easily result in a huge disconnect between the business owner and the realities of the business. Unfortunately, if you don't handle your business, it's bound to handle you. It is absolutely possible to run a sustainable, highly-profitable business without working 16 hours a day. But there are relatively few businesses that will run themselves completely, and people who want to spend the vast majority of their income every month probably lack many of the traits of successful business owners to begin with.
- kposehn 13y ago
  > Unfortunately, if you don't handle your business, it's bound to handle you. That is what many people who get into affiliate marketing don't understand. The most successful affiliates I know have 5-20 people working for them and have built a business around what they do. Most solo affiliates spend huge amounts of time trying to figure out how to do things and/or keep ahead of the churn.
- temporary201308 13y ago
  Yeah, when I was working on affiliate websites, I created a web framework and then paid people to be researchers for me. I made about $3K over 4 months for each $250 I invested into people doing research for me.
  - arkades 13y ago
    Can you elaborate on this? I don't understand what you mean by saying you paid people to "be researchers" and made money off it.
    - gohrt 13y ago
      Finding affiliate offers from merchants who want to advertise, putting content (ads/creative/filler) on the marketing site.
- 13y ago
helipad 13y ago
In what way were these passive income stories? I think the moment they went to a conference or "obsessively" researched anything should be a fairly large clue.
- mkrecny 13y ago
  Creation phase vs maintenance phase?
  - willholloway 13y ago
    This is correct. Although I was obsessive at the start, once my gf at the time got out of college and we started traveling I really scaled back my efforts and coasted for a while. There is nothing like waking up and checking your account and seeing you made $200 in your sleep, an by the end of the day there will be $500 more and all you have to do is plan your next move. It was all quite ephemeral though. I didn't control the product or the medium and was just a middle man. You could develop a similar strategy with something more defensible, with a moat. You have to think like an entrepreneur, and see market opportunities and use your coding skills to automate and scale your efforts. That's my hypothesis anyway, I haven't been able to make that much money semi-passively again so take it all with a grain of salt.
    - cgman 13y ago
      I have the exact same experience. Coasted on FB viral apps for a while, some days making 10K+ then the crash. Felt shitty when I had to find a job again and do the 9-5.
      - bemmu 13y ago
        Which apps were these? I had one popular app in 2008 which was in the top 20 apps I recall, but certainly never had any 10K days. Best day was 720k pageviews and I was getting paid around $1 CPM.
willholloway 13y ago
It was a bit surreal to see two of my HN comments in a blog post on the front page of HN. Since people are interested, here's another tale of my year running affiliate campaigns on Facebook. By the time I got into the game the competition was already heating up. I spent most of my efforts scaling my dating site campaigns internationally because global traffic was a far more fertile field, with less competition and cheaper clicks. After I had maxed out all the nations of the English speaking world, I started running campaigns in France (and I unwittingly and unintentionally advertised hard core porn on Facebook in France for at least a month because of the geographic based redirect of the dating site I was advertising, with a US based IP you saw a tame site, with a French IP explicit hardcore porn) My greatest success however was in expanding my operation to Latin America. In the industry the concept of banner blindness is crucial to understand. Click through rates go down over time, both for individual ads and for entire nations. Because a site like Facebook wants to maximize its CPM, higher click through rates are the way to get cheaper clicks and profit. I took my profitable ads in English and ran them through Google translate into Spanish. It was something simple like "Meet Hot Girls". The hardest part was finding a dating site that accepted South American traffic. Credit cards and e-commerce have a ways to go in the global South, and therefore the traffic is of much lower value because it converts much less. I found a tame version of Adult Friend Finder without any nudity on it's landing page. At the time Friend Finder Networks stated that they accepted traffic from almost all of the South American countries. The first day I ran my campaigns in Columbia & Venezuela the response was incredible. Just astounding. In an English speaking country you would be lucky to get three people out of a thousand to click on one of your ads. That first day in Columbia I was getting ten people out of a thousand to click and the clicks just cost one penny each! I was converting at a rate that Friend Finder was paying me 14 cents per click and in that first day I made over $5000 with very little ad spend. A small ad spend was important because I had to pay FB daily but was only paid out every two weeks and I was just out of college with very little credit. I could have made so much more in those days with an American Express Plum card and unlimited credit. As the South American ad campaigns went on the click through rates trended closer to the rates of their Western counterparts. It is for this reason I think I might have been the first person to run dating ads on Facebook in Columbia.
- mkrecny 13y ago
kposehn 13y ago
Interesting! Will's experience is so akin to many people that got into affiliate marketing around the same time as I did. It ended up getting to the point where people slammed into the industry so fast that the only way to stay alive was to seek every competitive advantage you had.
jbigelow76 13y ago
I don't see how mkrecny can consider pay per click affiliate marketing "passive income", it can extremely lucrative as Will Holloway has displayed but it is by no means passive. Here's how you "passively" earn money with PPC affiliate marketing: 1. Get conencted with advertisers and sorting through offers to promote 2. Set up landing pages 3. (Probably) create your own ad images and/or write your ad and landing page copy 4. Identifying your target market, whether it's keyword based in Google or demographic based in FB 5. Run traffic and then split testing just about everything to increase your conversion rate. 6. Monitor stats to make sure the advertiser isn't capping or shaving you (if you don't monitor this on a very active basis you run the risk of sending traffic down a black hole and all the ad spend the goes along with it) 7. Scope out new markets/offers/traffic sources for when the existing dries up. 8. Repeat some or all of steps 1 through 7 ad nauseum. PPC affiliate marketing is a grind.
- kposehn 13y ago
  It is indeed a grind. How you make it passive is by finding campaigns that require little maintenance once set up. The passive nature is that you can maintain some campaigns with 30 minutes or so per week, each. This allows you to take a break from the churn (making new campaigns) anytime you like, so long as you understand your falloff. At one point I had 40+ campaigns running and generating a lot of cash flow. I knew that on average, 1-2 campaigns per week would fall-off (stop being profitable or worth working on due to competition). This let me take a nice vacation with my wife without worrying that much about making new campaigns, because I knew what would probably stop working in the interim and I could catch up. It is a lot more difficult now because of the number of people competing, so the rate of falloff is much higher in general.
- bubbleRefuge 13y ago
  What is split testing ? How can you audit an advertiser to counter the capping/shaving ?
- bybjorn 13y ago
  Some campaings can run for years without being monitered. You basically just watch the income stream, if it starts going down you know something is up (someone might have found the same niché/keyword etc.).. It _can_ definitiely be pretty passive.
throwawayfraud 13y ago
Ex-affiliate fraud manager here. Here's the kicker about affiliate marketing: the unethical practices exist because the system is set up in a way that there is no real incentive for mitigating fraud. The merchant who pays the bottom line might have no idea that fraud is happening - they only see the traffic numbers going up without realizing that this was already coming in through other means (bought or organic). The fact that the affiliate management or program might get their salary or bonus based on the size of the program (ie. traffic) does not help the situation at all. The largest affiliate in the program could be a sophisticated thief without anyone knowing any better! There's also the issue of technical illiteracy from the operating parties - they all claim that they fight fraudulent practices, when in fact they might not even know what is affecting them specifically. This is obviously to lure in more affiliates, clueless-hopeless people who bought in (often literally in the form of SEO and other infoproducts) on the dream of passive income. They've read two-three books on white hat practices and are trying to compete with, say a mob of savvy blackhatters buying Pay Per View (read: adware) traffic and stealing the commission. And don't get me started on the numbers. And then you realize that to the merchant itself, it doesn't really matter, because the profit at the end is so high that throwing millions out the window still doesn't even put a dent in the side of the business.
- cgman 13y ago
  Amen. I knew of affiliate managers and their employers (CEOs of companies) who knowingly allowed certain types of activities for high-rollers and openly condemned it for the rest. Affiliate marketing is a shady industry where the only person who benefits is the scumbag who started his own program and succeeded at attracting a few large blackhatters to promote some offers. I've been on both sides of that fence as a publisher and an advertiser. ( I guess I should mention that advertising pays quite well and takes far less work once everything is set up ie. coreg)
- kposehn 13y ago
  Thanks for bringing that side of the table to this discussion. I saw the same. I ended up only working with 2-3 affiliate networks, and even then only with those where I had a long trustworthy relationship with the affiliate manager. Fraud is so rampant, sometimes all you can do to escape it is own the whole chain from top to bottom.
ambiate 13y ago
My biggest potential profit was during the American Idol reign of terror. At the time, the keyword in Adwords was 1/cent a click. You read that right. Literally, 200,000 impressions/minute with a click-through rate of 1.3%. Nearly 150,000 clicks in one hour. Given a dance related affiliate product, I could have turned $6,000 into $250,000 in less than a day. Sigh. Oh yeah, another day, long ago, "Face" was not costing very much. The Face keyword shows up for 'face' and 'facebook'.
- bemmu 13y ago
  And why didn't this pan out?
SCAQTony 13y ago
This paragraph sickened me on so many levels: "...An acquaintance in the biz once bribed a Facebook employee whose job it was to approve or deny ads on the platform. His inside man set his account to auto approve any ad he wanted. ..." Just wait till some NSA employee starts selling gossip to TMZ or HR departments.
- Uhhrrr 13y ago
  Or to Goldman Sachs.
  - SCAQTony 13y ago
    Oh GOD, you're right. Maybe it is all readying happening?
    - coopdog 13y ago
      It must be, especially considering the data is cached in many different countries with varying degrees of oversight.
temporary201308 13y ago
A couple of years ago, I was extremely ill and couldn't work. In my periods of relative lucidity, I was able to hack together websites and make approximately $4K/month, which was enough to live on if you ignored the $8K/month in medical bills. My experience with them suggested that you needed to go through and do an entire new thing every three months, because that's about the time it would take any efficient scheme to be overwhelmed by other people discovering the efficiency of that scheme.
deedubaya 13y ago
You can't expect a source of passive income to last forever without regular maintenance. Just like you can't plan on staying on the road forever after you let go of the driver's wheel or stop putting gas in the tank.
alxndresp 13y ago
Hearing the term "passive income" just reminds me of the Warrior Forum. What an ugly place. Especially when affiliate marketing is mentioned. I understand someone can create an actual business, a SaaS or product (not some get rich quick e-book) and make passive income like that, but when I hear of affiliate marketing it just leaves a sour taste in my mouth. It just reminds me of people ripping off others or selling them sham, snake oil e-books for their own gain.
- johnward 13y ago
  There are a bunch of legitimate affiliates out there who aren't spamming "get rich quick books". There are also infoproducts that do create value for the people that buy them. It's a shame that "affiliate marketing" has this negative connotation associated with it because of things like WaFo.
  - alxndresp 13y ago
    Oh, I don't doubt there are. The reputation of affiliate marketing has definitely been sullied by those crooks, though.
- Anonymous238 13y ago
  This isn't true, there's lots of legitimate ways to bring in passive income if you know the right niches to explore. Look at this screenshot of my Adsense earnings for last month, where I brought in over $13,500! "Learn the tricks to uncovering the top undiscovered niches for making a fortune! Click here to buy the e-book. Special offer for warriors!"
- Axsuul 13y ago
  Most of the WSOs on Warrior Forum are scams, hah.
lectrick 13y ago
1) In a capitalist economy, the low-hanging fruit tend to disappear fast. This is by design. Unfortunately, the design is such that you can't have 1 great idea and then just rest on your laurels forever. On the bright side, this compels you to give more to the world, even as it challenges you to maintain balance. 2) In a career with a large creative (read: risky) component, it seems that booms and busts are the norm. I've seen this in web dev a lot- one year I'm unemployed for almost the whole year (but hey, I was the first death knight to level 80 on the server, sigh), another year you're making six figures at a hot-shot startup. I think that the pros outweigh the cons, but you MUST be pragmatic about money and save for the downturns. I'm psyched that you enjoyed your boom times, but I think your lesson was well-learned.
1337biz 13y ago
Maybe it is just me, but this threat feels like I just walked into a socket puppet theater.
m1ndeater 13y ago
One thing I find frustrating is when people associate passive income with non-value producing shortcuts, scams, and poor ethics. Passive versus active income and scams versus providing real value are independent characteristics of a business; it's perfectly reasonable to create a "good" business that creates real value and earns passive income. Passive income is one of my primary goals, so maybe that's why I feel like defending the term. Maybe the phrase just has bad connotations these days, but I don't think the idea of making money without having to actively work should come with immediate thoughts of shady affiliate programs and scummy endeavors.
- OldSchool 13y ago
  Precisely. Bonds, dividends, and investment or collected loan interest are all passive income. Rents and royalties are characterized as such. Done correctly, these are the traditional low-risk rewards of accumulating capital. Ironically here in the beacon-of-capitalism USA, these were the first areas squeezed as an extremely nasty side effect of "stimulus." I've only ever seen "passive income" get a bad connotation in the past few weeks here on HN. People should keep in mind too that these stories are entirely survivorship-biased, so perhaps the average affiliate effort loses money, I don't know, but it's certainly more complicated than "it goes away."
  - comrade_ogilvy 13y ago
    "Passive income" was once the province of people who accumulated wealth and now were reaping the benefits of good long-term strategies. That is honest enough. Being a marketing middleman can be an honest enough niche, too. That these particular marketing middlemen, with an intrinsically ephemeral revenue stream, would try to steal the term "passive income" to glamorize their take tells us a lot about the nature of the business, right? Fraud. Lots of fraud.
- lmm 13y ago
  Those associations are there for a reason. Passive income means either you had enough initial capital to live off the risk-free rate on that long-term, or you're doing what amounts to arbitrage. And while arbitrageurs fulfil a valuable market function, they've been publicly hated since time immemorial.
andrethegiant 13y ago
"After a couple years of work, I was bringing in 20k a month... It lasted for 7 years before it hit the bottom... At that point I was burnt out and was running low on savings." $20,000 * 12 * 7 = $1,680,000 I wonder what he was buying that made him run out of cash so quick!
- soneca 13y ago
  20k is likely the peak. "a couple years", I would say is equal 1 year with a income of hundreds and 1 year with a income of ~5k. Then, it goes for 2 years at the peak, and then 3 years of slow death, probably a whole last year with close to zero income. so, 12500 + 125,000 + 2420,000 + 1210,000 + 125,000 + 12500 = $760,000 in 7 years =~ $110,000/year. Not a millionaire.
- bzbarsky 13y ago
  1) Federal income tax on $240k income as an unmarried taxpayer would be about $63k today. A good bit higher back then because the tax bracket boundaries were higher. 2) CA income tax (note that he was in CA) on $240k income as an unmarried taxpayer is about $20k. I suspect it wasn't much lower back then, if lower at all. I'm assuming "unmarried" given the "girls" in the description of the lifestyle. So as a start the after-tax number is closer to $157k * 7 = $1,099,000. Then you have housing: a "beautiful apartment" in Santa Monica. http://www.trulia.com/for_rent/Santa_Monica,CA/1-2_beds/APARTMENT_type/ http://www.trulia.com/for_rent/Santa_Monica,CA/1-2_beds/APAR... suggests that will probabably run you $3k/month at the low end of the scale for a nice place, and as high as $16k/month if you go for luxury. Figure $252k if it was a cheap nice apartment. The "nice car" mentioned was presumably at least 2, over the course of 7 years, and presumably cost $50k or more each. Assuming he didn't do much cooking and just ate out all the time, and didn't worry too much about the cost but also didn't go looking for expensive, figure another $20k/year or so ($50 per day is a pretty typical per diem for a highish-cost-of-living area like that). So that's another $140k. That still leaves about $600k to spend on various other things, of course. But notice that I low-balled both the taxes (e.g he had another $100-120k of FICA over 7 years, given that he was self-employed) and the rent, and I suspect the cars, and that it's pretty easy to spend a lot of money on some of the other things on his list. Oh, and he might have bought health insurance too; that would run him somewhere between $20k and $100k over 7 years, depending on what he bought... Once you get serious about not watching how you spend money, it's pretty easy to spend a lot of it quickly. :(
soneca 13y ago
I wonder, a successfull writer would be considered a "passive income" example here in HN? It seems to me that the illusion of working hard for some months, writing a master piece, be ackonwledged a great writer, then, every 5 years writing a new hit and be wealthy forever while working on a bucolic house very similar to the passive income dream.
- snoonan 13y ago
  There are certainly accidental hits in every field. There are also pragmatic writers that write a book to a market instead of magically land a market for a book. I would still call a few months a year of writing base hits a really great outcome.
  - zrail 13y ago
    > a few months a year of writing base hits This is going to be my plan for the next few years, assuming my first book[1] does well. It drops in 13 days! [1]: https://www.petekeen.net/mastering-modern-payments https://www.petekeen.net/mastering-modern-payments
deleted 13y ago
[deleted]
welder 13y ago
The title should be "Two Stories of Affiliate Marketing Excess". Seeing "Passive Income" I don't automatically assume affiliate marketing as the income source.
- mkrecny 13y ago
  The second story is not about affiliate marketing - it's about a SaaS CRM.
  - ZiadHilal 13y ago
    Was a downloadable CMS.
livestyle 13y ago
I do love how there is at least room for discussion regarding these important topic.
mimetic2 13y ago
A couple things about this. #1 -- This is about affiliate marketing excess. I would argue that affiliate marketing is not passive income at all. A lot of affiliate marketers I know are very sharp and work really hard. Certainly the 'super' affiliates do. Ethics aside, all very smart people. Working from home or for yourself does not put you into the passive income category #2 -- There are far more ways than affiliate marketing to make 'passive income' and to even make 'passive' income its very difficult and takes a lot of work. The highs are high and the lows are low and it takes a while. Unless you actually bring value quickly in which case you can get to things sooner. #3 -- Not all stories end this way. A lot of people are smart with their money and know what they're doing and have created real value for their customers. I speak from experience. TL;DR -- this is not about passive income rather affiliate marketers.
iblaine 13y ago
Ah, I was that guy. Doing affiliate marketing, cashing $20k checks per month in my 20s, not saving a penny & partying endlessly. I was in the online meds industry. When someone's site went down you didn't know if it was a network issue or a raid by the DEA. In one example I had a series of spam sites that represented 0.5% of all pages index by Google. Google announced they indexed 1B pages & 50M of those were mine. You could throw a dart & hit those crappy affiliate links. Pretty funny looking back on it. Those were some sleazy fun times.
- dualogy 13y ago
  Cool, thanks for polluting public airwaves back in the day! Up to anything... useful lately? ;D
- bybjorn 13y ago
  Ah, the good ol' doorway pages. Back in the 90s my whole neighbourhood was full of kids generating them and having them indexed.
jingo 13y ago
Imagine if the navigational system of the web could be improved to the point where most users could easily find what they were looking for... so much so, that there was little room for middlemen ("affiliates"). Imagine further that the "calf-cow" model of the web could be replaced with something more decentralized, e.g. a "content-centric" network instead of a "source-centric" one... such that there would be little room for "selling" traffic.
- gohrt 13y ago
  The web is improved to that point. But there is also a seedy underbelly of selling scams to idiots. What needs to be improved is detection and prosecution of the affiliate scammers.
  - dualogy 13y ago
    ... or people could stop being idiots ;)
  - jingo 13y ago
    "The web is improved to that point." I respectfully, but strongly, disagree. While you or I might be able to find what we are looking for, we cannot extrapolate this to mean that "users" (in the general sense) can do the same. Moreover, I'm not satisfied with the status quo of locating stuff on the internet. It's better than it used to be, but I believe we can do better - much better.
- 205guy 13y ago
  Much as I would love to take all Internet advertising and its affiliate marketing extremes to some distant planet and nuke it from orbit, I'm afraid the Internet as we know it would go with it. Navigational system == search == google == advertising supported == deception and affiliate marketing fringes. What's the alternative? Search as a public service run by the NSA (oh wait...)?
  - jingo 13y ago
    Just because you cannot see an alternative does not mean one does not exist. Furthermore, it does not imply that we should not contemplate alteratives. But since you mentioned it, it's not unfathomable to think that NSA could help the situation. The search technology they develop, e.g. Binney's work with B+ trees, is funded with tax dollars. Maybe the public should be allowed to use it (not the data, necessarily, but the software). I wonder who would argue search technology is some sort of weapons-grade "munitions" like was claimed about cryptography. The benefit might be a dramatic reduction in internet crime without the cost of (over) regulating the internet.
radley 13y ago
Anyone else feel like this post is simply a marketing scheme to sell a "make money in your sleep as a hacker" book?
- jacques_chester 13y ago
  Yep. It's blogspam, in my opinion. Edit: however he has gotten permission to republish, so I guess it's OK.
shams93 13y ago
I don't have a goal of passive income, rather trying to turn my personal obsessions into an actual business. The nice thing about the OCD approach is you're going to do that hobby anyways. Job gets demanding I just take a break from the project but still I get 100 new users a month, which isn't tough for a free product but using the google play store I have no hosting costs for my app. Plus 100 users a month builds out a base for me to market my much more complex commercial app to once I've competed it.
shams93 13y ago
In other words tackle a really difficult problem that is aligned to your personal obsessions, such as in case A instead of doing marketing to fund movies, learn to develop cloud based video editing software to fund making movies instead because you have to make movies to test your edits anyways and that niche is extremely tough to code for so the competition while its there is very low.
clarky07 13y ago
Moral of the story doesn't have anything to do with passive income. The moral is to save some freaking money instead of spending every dime you have, and this is true whether you are making tons of money or just a little. (passively or not) Also, why has "Passive Income" become such an evil thing around here? It doesn't have to be a scam or BS or something. It could just be someone did a ton of work on the front end and then gets paid for it over time "passively". I make money off of software that I spent lots of time on that creates value for people. The fact that people keep buying it now that it's done makes the income somewhat "passive" (still have to update things over time, but minimal relative to initial investment of time). There is nothing wrong with passive income. There is something wrong with doing scammy fraudulent things with affiliate marketing. These 2 things don't overlap entirely so stop acting like they do. Frankly, both of these stories sound like they mostly didn't do anything scammy. They just made a lot of money and then spent a lot of money. Lots of people do that all the time with non-passive 9-5 jobs, but they don't get on the front page of HN.
- wslh 13y ago
  > why has "Passive Income" become such an evil thing around here? In general the lifestyle business is criticized here, but ironically at the same time people who build startups are acquired by their skills/talent more than from the startup itself. At the end both are lifestyle businesses except if you are the next Google/Facebook/Microsoft/Apple/IBM or if you are Dropbox and refuse to be acquired by Apple!
holdenweb 13y ago
"I've learned that luck and timing are definitely part of the equation." A lesson for us all there, if we choose to listen to it.
jlees 13y ago
Meta-comment on the article itself: Story 2 seemed unrelated to passive income until I clicked through to the original HN comment and realised the blog post author hadn't quoted the line about Ziad being a passive income hacker. I find these stories reinforce my (already negative) impressions of the "passive" income/affiliate business; if the purpose of this post/blog is to promote the "hacker's guide to passive income" book-in-progress, it certainly failed.
ChrisNorstrom 13y ago
Suddenly that advice from Paul Graham about "do things that don't scale" make even more sense. If you want a space and its profits all to yourself, pick something that has a high barrier to entry, and isn't easily scalable. The more something takes time, effort, money, skill, talent, and endurance the less competitors you'll have.
mkartic 13y ago
I have a few questions. I am hoping to implement/try out making some passive income here, as I have enough free time to invest. 1. While I know its hard to replicate the $5000 day, how hard is it to profit $5/day consistently? How much effort would that require? 2. As a student working my way through college, any income that doesn't require an all day desk presence sounds very lucrative! Can anyone point me to where I can get started? 3. Searching the web for affiliate marketing seems to take me to the scary underbelly of the Internet which I'm afraid to scratch. Any definitive resources? Where does one find websites that offer money for clicks? Is there a standard platform or does it work company by company?
schappim 13y ago
It seems the OP himself is generating passive income by creating an ebook on generating passive income. See: https://leanpub.com/passiveincome https://leanpub.com/passiveincome
- mkrecny 13y ago
  Actually I run http://followgen.com http://followgen.com ... eBooks aren't an interesting form of passive income to me as there's no real potential for recurring revenue. SaaS all the way, please.
SpookSEO 13y ago
I've met a lot of affiliate marketers as well that can't handle the money. They're like athletes who are paid millions of dollars but still end-up broke in the end because they do not know the value of saving and preparing for the rainy days.

348 points by mkrecny 13y ago

stfu 13y ago

I hope you have asked for the agreement of both the authors to republish these stories. I wouldn't want to see hn becoming your goto place to stuff your personal blog via copy&pasting and not adding yourself a single additional thought or idea.

willholloway 13y ago
He's got my permission.
ZiadHilal 13y ago
Mine too.
- StavrosK 13y ago
  I upvoted you just to reverse this thread so it makes less sense.

tomrod 13y ago

Sounds like passive income involves a lot of work.

chmike 13y ago
I would assimilate it as writing a book. Writing the book is a lot of work, but when done it becomes "passive income" in the sense that you earn money while you sleep. Consider it as the opposite of earning money by installing radios in cars. There is no money earning while you sleep.
- snoonan 13y ago
  This is exactly what it works like in practice. Sometimes you need to write a 2nd edition or another book if you want a raise.
kposehn 13y ago
The "passive" aspect is having something that requires a small amount of time to maintain and runs over long periods of time with little overall attention paid to it. A good example is a PPC campaign with a static site that only needs to be checked up on once a week, at maybe 30 minutes max each time.
snoonan 13y ago
That's a fact, not a criticism! Anyone who says different is selling something.

OldSchool 13y ago

One pretty simple lesson: Save some of your money even if it's from passive income. Nothing lasts forever. BTW: What's up with the "only make something meaningful" propaganda lately? Nothing wrong with profits, just keep in mind that you can't outsmart the whole world forever: like arbitrage in an efficient marketplace, your low hanging fruit are eventually picked by everyone.

gohrt 13y ago
Of course there is something wrong with it. It is a zero-sum activity (or negative-sum, since it takes work) that moves value around instead of creating it.
deleted 13y ago
[deleted]

7Figures2Commas 13y ago

These stories highlight the fundamental problem with the popularized "passive income" approach: the goal is usually to support a lifestyle, not to provide value to customers. This can easily result in a huge disconnect between the business owner and the realities of the business. Unfortunately, if you don't handle your business, it's bound to handle you. It is absolutely possible to run a sustainable, highly-profitable business without working 16 hours a day. But there are relatively few businesses that will run themselves completely, and people who want to spend the vast majority of their income every month probably lack many of the traits of successful business owners to begin with.

kposehn 13y ago
> Unfortunately, if you don't handle your business, it's bound to handle you. That is what many people who get into affiliate marketing don't understand. The most successful affiliates I know have 5-20 people working for them and have built a business around what they do. Most solo affiliates spend huge amounts of time trying to figure out how to do things and/or keep ahead of the churn.
temporary201308 13y ago
Yeah, when I was working on affiliate websites, I created a web framework and then paid people to be researchers for me. I made about $3K over 4 months for each $250 I invested into people doing research for me.
- arkades 13y ago
  Can you elaborate on this? I don't understand what you mean by saying you paid people to "be researchers" and made money off it.
  - gohrt 13y ago
    Finding affiliate offers from merchants who want to advertise, putting content (ads/creative/filler) on the marketing site.
13y ago

helipad 13y ago

In what way were these passive income stories? I think the moment they went to a conference or "obsessively" researched anything should be a fairly large clue.

mkrecny 13y ago
Creation phase vs maintenance phase?
- willholloway 13y ago
  This is correct. Although I was obsessive at the start, once my gf at the time got out of college and we started traveling I really scaled back my efforts and coasted for a while. There is nothing like waking up and checking your account and seeing you made $200 in your sleep, an by the end of the day there will be $500 more and all you have to do is plan your next move. It was all quite ephemeral though. I didn't control the product or the medium and was just a middle man. You could develop a similar strategy with something more defensible, with a moat. You have to think like an entrepreneur, and see market opportunities and use your coding skills to automate and scale your efforts. That's my hypothesis anyway, I haven't been able to make that much money semi-passively again so take it all with a grain of salt.
  - cgman 13y ago
    I have the exact same experience. Coasted on FB viral apps for a while, some days making 10K+ then the crash. Felt shitty when I had to find a job again and do the 9-5.
    - bemmu 13y ago
      Which apps were these? I had one popular app in 2008 which was in the top 20 apps I recall, but certainly never had any 10K days. Best day was 720k pageviews and I was getting paid around $1 CPM.

willholloway 13y ago

It was a bit surreal to see two of my HN comments in a blog post on the front page of HN. Since people are interested, here's another tale of my year running affiliate campaigns on Facebook. By the time I got into the game the competition was already heating up. I spent most of my efforts scaling my dating site campaigns internationally because global traffic was a far more fertile field, with less competition and cheaper clicks. After I had maxed out all the nations of the English speaking world, I started running campaigns in France (and I unwittingly and unintentionally advertised hard core porn on Facebook in France for at least a month because of the geographic based redirect of the dating site I was advertising, with a US based IP you saw a tame site, with a French IP explicit hardcore porn) My greatest success however was in expanding my operation to Latin America. In the industry the concept of banner blindness is crucial to understand. Click through rates go down over time, both for individual ads and for entire nations. Because a site like Facebook wants to maximize its CPM, higher click through rates are the way to get cheaper clicks and profit. I took my profitable ads in English and ran them through Google translate into Spanish. It was something simple like "Meet Hot Girls". The hardest part was finding a dating site that accepted South American traffic. Credit cards and e-commerce have a ways to go in the global South, and therefore the traffic is of much lower value because it converts much less. I found a tame version of Adult Friend Finder without any nudity on it's landing page. At the time Friend Finder Networks stated that they accepted traffic from almost all of the South American countries. The first day I ran my campaigns in Columbia & Venezuela the response was incredible. Just astounding. In an English speaking country you would be lucky to get three people out of a thousand to click on one of your ads. That first day in Columbia I was getting ten people out of a thousand to click and the clicks just cost one penny each! I was converting at a rate that Friend Finder was paying me 14 cents per click and in that first day I made over $5000 with very little ad spend. A small ad spend was important because I had to pay FB daily but was only paid out every two weeks and I was just out of college with very little credit. I could have made so much more in those days with an American Express Plum card and unlimited credit. As the South American ad campaigns went on the click through rates trended closer to the rates of their Western counterparts. It is for this reason I think I might have been the first person to run dating ads on Facebook in Columbia.

mkrecny 13y ago

kposehn 13y ago

Interesting! Will's experience is so akin to many people that got into affiliate marketing around the same time as I did. It ended up getting to the point where people slammed into the industry so fast that the only way to stay alive was to seek every competitive advantage you had.

jbigelow76 13y ago

I don't see how mkrecny can consider pay per click affiliate marketing "passive income", it can extremely lucrative as Will Holloway has displayed but it is by no means passive. Here's how you "passively" earn money with PPC affiliate marketing: 1. Get conencted with advertisers and sorting through offers to promote 2. Set up landing pages 3. (Probably) create your own ad images and/or write your ad and landing page copy 4. Identifying your target market, whether it's keyword based in Google or demographic based in FB 5. Run traffic and then split testing just about everything to increase your conversion rate. 6. Monitor stats to make sure the advertiser isn't capping or shaving you (if you don't monitor this on a very active basis you run the risk of sending traffic down a black hole and all the ad spend the goes along with it) 7. Scope out new markets/offers/traffic sources for when the existing dries up. 8. Repeat some or all of steps 1 through 7 ad nauseum. PPC affiliate marketing is a grind.

kposehn 13y ago
It is indeed a grind. How you make it passive is by finding campaigns that require little maintenance once set up. The passive nature is that you can maintain some campaigns with 30 minutes or so per week, each. This allows you to take a break from the churn (making new campaigns) anytime you like, so long as you understand your falloff. At one point I had 40+ campaigns running and generating a lot of cash flow. I knew that on average, 1-2 campaigns per week would fall-off (stop being profitable or worth working on due to competition). This let me take a nice vacation with my wife without worrying that much about making new campaigns, because I knew what would probably stop working in the interim and I could catch up. It is a lot more difficult now because of the number of people competing, so the rate of falloff is much higher in general.
bubbleRefuge 13y ago
What is split testing ? How can you audit an advertiser to counter the capping/shaving ?
bybjorn 13y ago
Some campaings can run for years without being monitered. You basically just watch the income stream, if it starts going down you know something is up (someone might have found the same niché/keyword etc.).. It _can_ definitiely be pretty passive.

throwawayfraud 13y ago

Ex-affiliate fraud manager here. Here's the kicker about affiliate marketing: the unethical practices exist because the system is set up in a way that there is no real incentive for mitigating fraud. The merchant who pays the bottom line might have no idea that fraud is happening - they only see the traffic numbers going up without realizing that this was already coming in through other means (bought or organic). The fact that the affiliate management or program might get their salary or bonus based on the size of the program (ie. traffic) does not help the situation at all. The largest affiliate in the program could be a sophisticated thief without anyone knowing any better! There's also the issue of technical illiteracy from the operating parties - they all claim that they fight fraudulent practices, when in fact they might not even know what is affecting them specifically. This is obviously to lure in more affiliates, clueless-hopeless people who bought in (often literally in the form of SEO and other infoproducts) on the dream of passive income. They've read two-three books on white hat practices and are trying to compete with, say a mob of savvy blackhatters buying Pay Per View (read: adware) traffic and stealing the commission. And don't get me started on the numbers. And then you realize that to the merchant itself, it doesn't really matter, because the profit at the end is so high that throwing millions out the window still doesn't even put a dent in the side of the business.

cgman 13y ago
Amen. I knew of affiliate managers and their employers (CEOs of companies) who knowingly allowed certain types of activities for high-rollers and openly condemned it for the rest. Affiliate marketing is a shady industry where the only person who benefits is the scumbag who started his own program and succeeded at attracting a few large blackhatters to promote some offers. I've been on both sides of that fence as a publisher and an advertiser. ( I guess I should mention that advertising pays quite well and takes far less work once everything is set up ie. coreg)
kposehn 13y ago
Thanks for bringing that side of the table to this discussion. I saw the same. I ended up only working with 2-3 affiliate networks, and even then only with those where I had a long trustworthy relationship with the affiliate manager. Fraud is so rampant, sometimes all you can do to escape it is own the whole chain from top to bottom.

ambiate 13y ago

My biggest potential profit was during the American Idol reign of terror. At the time, the keyword in Adwords was 1/cent a click. You read that right. Literally, 200,000 impressions/minute with a click-through rate of 1.3%. Nearly 150,000 clicks in one hour. Given a dance related affiliate product, I could have turned $6,000 into $250,000 in less than a day. Sigh. Oh yeah, another day, long ago, "Face" was not costing very much. The Face keyword shows up for 'face' and 'facebook'.

bemmu 13y ago
And why didn't this pan out?

SCAQTony 13y ago

This paragraph sickened me on so many levels: "...An acquaintance in the biz once bribed a Facebook employee whose job it was to approve or deny ads on the platform. His inside man set his account to auto approve any ad he wanted. ..." Just wait till some NSA employee starts selling gossip to TMZ or HR departments.

Uhhrrr 13y ago
Or to Goldman Sachs.
- SCAQTony 13y ago
  Oh GOD, you're right. Maybe it is all readying happening?
  - coopdog 13y ago
    It must be, especially considering the data is cached in many different countries with varying degrees of oversight.

temporary201308 13y ago

A couple of years ago, I was extremely ill and couldn't work. In my periods of relative lucidity, I was able to hack together websites and make approximately $4K/month, which was enough to live on if you ignored the $8K/month in medical bills. My experience with them suggested that you needed to go through and do an entire new thing every three months, because that's about the time it would take any efficient scheme to be overwhelmed by other people discovering the efficiency of that scheme.

deedubaya 13y ago

You can't expect a source of passive income to last forever without regular maintenance. Just like you can't plan on staying on the road forever after you let go of the driver's wheel or stop putting gas in the tank.

alxndresp 13y ago

Hearing the term "passive income" just reminds me of the Warrior Forum. What an ugly place. Especially when affiliate marketing is mentioned. I understand someone can create an actual business, a SaaS or product (not some get rich quick e-book) and make passive income like that, but when I hear of affiliate marketing it just leaves a sour taste in my mouth. It just reminds me of people ripping off others or selling them sham, snake oil e-books for their own gain.

johnward 13y ago
There are a bunch of legitimate affiliates out there who aren't spamming "get rich quick books". There are also infoproducts that do create value for the people that buy them. It's a shame that "affiliate marketing" has this negative connotation associated with it because of things like WaFo.
- alxndresp 13y ago
  Oh, I don't doubt there are. The reputation of affiliate marketing has definitely been sullied by those crooks, though.
Anonymous238 13y ago
This isn't true, there's lots of legitimate ways to bring in passive income if you know the right niches to explore. Look at this screenshot of my Adsense earnings for last month, where I brought in over $13,500! "Learn the tricks to uncovering the top undiscovered niches for making a fortune! Click here to buy the e-book. Special offer for warriors!"
Axsuul 13y ago
Most of the WSOs on Warrior Forum are scams, hah.

lectrick 13y ago

1) In a capitalist economy, the low-hanging fruit tend to disappear fast. This is by design. Unfortunately, the design is such that you can't have 1 great idea and then just rest on your laurels forever. On the bright side, this compels you to give more to the world, even as it challenges you to maintain balance. 2) In a career with a large creative (read: risky) component, it seems that booms and busts are the norm. I've seen this in web dev a lot- one year I'm unemployed for almost the whole year (but hey, I was the first death knight to level 80 on the server, sigh), another year you're making six figures at a hot-shot startup. I think that the pros outweigh the cons, but you MUST be pragmatic about money and save for the downturns. I'm psyched that you enjoyed your boom times, but I think your lesson was well-learned.

1337biz 13y ago

Maybe it is just me, but this threat feels like I just walked into a socket puppet theater.

m1ndeater 13y ago

One thing I find frustrating is when people associate passive income with non-value producing shortcuts, scams, and poor ethics. Passive versus active income and scams versus providing real value are independent characteristics of a business; it's perfectly reasonable to create a "good" business that creates real value and earns passive income. Passive income is one of my primary goals, so maybe that's why I feel like defending the term. Maybe the phrase just has bad connotations these days, but I don't think the idea of making money without having to actively work should come with immediate thoughts of shady affiliate programs and scummy endeavors.

OldSchool 13y ago
Precisely. Bonds, dividends, and investment or collected loan interest are all passive income. Rents and royalties are characterized as such. Done correctly, these are the traditional low-risk rewards of accumulating capital. Ironically here in the beacon-of-capitalism USA, these were the first areas squeezed as an extremely nasty side effect of "stimulus." I've only ever seen "passive income" get a bad connotation in the past few weeks here on HN. People should keep in mind too that these stories are entirely survivorship-biased, so perhaps the average affiliate effort loses money, I don't know, but it's certainly more complicated than "it goes away."
- comrade_ogilvy 13y ago
  "Passive income" was once the province of people who accumulated wealth and now were reaping the benefits of good long-term strategies. That is honest enough. Being a marketing middleman can be an honest enough niche, too. That these particular marketing middlemen, with an intrinsically ephemeral revenue stream, would try to steal the term "passive income" to glamorize their take tells us a lot about the nature of the business, right? Fraud. Lots of fraud.
lmm 13y ago
Those associations are there for a reason. Passive income means either you had enough initial capital to live off the risk-free rate on that long-term, or you're doing what amounts to arbitrage. And while arbitrageurs fulfil a valuable market function, they've been publicly hated since time immemorial.

andrethegiant 13y ago

"After a couple years of work, I was bringing in 20k a month... It lasted for 7 years before it hit the bottom... At that point I was burnt out and was running low on savings." $20,000 * 12 * 7 = $1,680,000 I wonder what he was buying that made him run out of cash so quick!

soneca 13y ago
20k is likely the peak. "a couple years", I would say is equal 1 year with a income of hundreds and 1 year with a income of ~5k. Then, it goes for 2 years at the peak, and then 3 years of slow death, probably a whole last year with close to zero income. so, 12500 + 125,000 + 2420,000 + 1210,000 + 125,000 + 12500 = $760,000 in 7 years =~ $110,000/year. Not a millionaire.
bzbarsky 13y ago
1) Federal income tax on $240k income as an unmarried taxpayer would be about $63k today. A good bit higher back then because the tax bracket boundaries were higher. 2) CA income tax (note that he was in CA) on $240k income as an unmarried taxpayer is about $20k. I suspect it wasn't much lower back then, if lower at all. I'm assuming "unmarried" given the "girls" in the description of the lifestyle. So as a start the after-tax number is closer to $157k * 7 = $1,099,000. Then you have housing: a "beautiful apartment" in Santa Monica. http://www.trulia.com/for_rent/Santa_Monica,CA/1-2_beds/APARTMENT_type/ http://www.trulia.com/for_rent/Santa_Monica,CA/1-2_beds/APAR... suggests that will probabably run you $3k/month at the low end of the scale for a nice place, and as high as $16k/month if you go for luxury. Figure $252k if it was a cheap nice apartment. The "nice car" mentioned was presumably at least 2, over the course of 7 years, and presumably cost $50k or more each. Assuming he didn't do much cooking and just ate out all the time, and didn't worry too much about the cost but also didn't go looking for expensive, figure another $20k/year or so ($50 per day is a pretty typical per diem for a highish-cost-of-living area like that). So that's another $140k. That still leaves about $600k to spend on various other things, of course. But notice that I low-balled both the taxes (e.g he had another $100-120k of FICA over 7 years, given that he was self-employed) and the rent, and I suspect the cars, and that it's pretty easy to spend a lot of money on some of the other things on his list. Oh, and he might have bought health insurance too; that would run him somewhere between $20k and $100k over 7 years, depending on what he bought... Once you get serious about not watching how you spend money, it's pretty easy to spend a lot of it quickly. :(

soneca 13y ago

I wonder, a successfull writer would be considered a "passive income" example here in HN? It seems to me that the illusion of working hard for some months, writing a master piece, be ackonwledged a great writer, then, every 5 years writing a new hit and be wealthy forever while working on a bucolic house very similar to the passive income dream.

snoonan 13y ago
There are certainly accidental hits in every field. There are also pragmatic writers that write a book to a market instead of magically land a market for a book. I would still call a few months a year of writing base hits a really great outcome.
- zrail 13y ago
  > a few months a year of writing base hits This is going to be my plan for the next few years, assuming my first book[1] does well. It drops in 13 days! [1]: https://www.petekeen.net/mastering-modern-payments https://www.petekeen.net/mastering-modern-payments

deleted 13y ago

[deleted]

welder 13y ago

The title should be "Two Stories of Affiliate Marketing Excess". Seeing "Passive Income" I don't automatically assume affiliate marketing as the income source.

mkrecny 13y ago
The second story is not about affiliate marketing - it's about a SaaS CRM.
- ZiadHilal 13y ago
  Was a downloadable CMS.

livestyle 13y ago

I do love how there is at least room for discussion regarding these important topic.

mimetic2 13y ago

A couple things about this. #1 -- This is about affiliate marketing excess. I would argue that affiliate marketing is not passive income at all. A lot of affiliate marketers I know are very sharp and work really hard. Certainly the 'super' affiliates do. Ethics aside, all very smart people. Working from home or for yourself does not put you into the passive income category #2 -- There are far more ways than affiliate marketing to make 'passive income' and to even make 'passive' income its very difficult and takes a lot of work. The highs are high and the lows are low and it takes a while. Unless you actually bring value quickly in which case you can get to things sooner. #3 -- Not all stories end this way. A lot of people are smart with their money and know what they're doing and have created real value for their customers. I speak from experience. TL;DR -- this is not about passive income rather affiliate marketers.

iblaine 13y ago

Ah, I was that guy. Doing affiliate marketing, cashing $20k checks per month in my 20s, not saving a penny & partying endlessly. I was in the online meds industry. When someone's site went down you didn't know if it was a network issue or a raid by the DEA. In one example I had a series of spam sites that represented 0.5% of all pages index by Google. Google announced they indexed 1B pages & 50M of those were mine. You could throw a dart & hit those crappy affiliate links. Pretty funny looking back on it. Those were some sleazy fun times.

dualogy 13y ago
Cool, thanks for polluting public airwaves back in the day! Up to anything... useful lately? ;D
bybjorn 13y ago
Ah, the good ol' doorway pages. Back in the 90s my whole neighbourhood was full of kids generating them and having them indexed.

jingo 13y ago

Imagine if the navigational system of the web could be improved to the point where most users could easily find what they were looking for... so much so, that there was little room for middlemen ("affiliates"). Imagine further that the "calf-cow" model of the web could be replaced with something more decentralized, e.g. a "content-centric" network instead of a "source-centric" one... such that there would be little room for "selling" traffic.

gohrt 13y ago
The web is improved to that point. But there is also a seedy underbelly of selling scams to idiots. What needs to be improved is detection and prosecution of the affiliate scammers.
- dualogy 13y ago
  ... or people could stop being idiots ;)
- jingo 13y ago
  "The web is improved to that point." I respectfully, but strongly, disagree. While you or I might be able to find what we are looking for, we cannot extrapolate this to mean that "users" (in the general sense) can do the same. Moreover, I'm not satisfied with the status quo of locating stuff on the internet. It's better than it used to be, but I believe we can do better - much better.
205guy 13y ago
Much as I would love to take all Internet advertising and its affiliate marketing extremes to some distant planet and nuke it from orbit, I'm afraid the Internet as we know it would go with it. Navigational system == search == google == advertising supported == deception and affiliate marketing fringes. What's the alternative? Search as a public service run by the NSA (oh wait...)?
- jingo 13y ago
  Just because you cannot see an alternative does not mean one does not exist. Furthermore, it does not imply that we should not contemplate alteratives. But since you mentioned it, it's not unfathomable to think that NSA could help the situation. The search technology they develop, e.g. Binney's work with B+ trees, is funded with tax dollars. Maybe the public should be allowed to use it (not the data, necessarily, but the software). I wonder who would argue search technology is some sort of weapons-grade "munitions" like was claimed about cryptography. The benefit might be a dramatic reduction in internet crime without the cost of (over) regulating the internet.

radley 13y ago

Anyone else feel like this post is simply a marketing scheme to sell a "make money in your sleep as a hacker" book?

jacques_chester 13y ago
Yep. It's blogspam, in my opinion. Edit: however he has gotten permission to republish, so I guess it's OK.

shams93 13y ago

I don't have a goal of passive income, rather trying to turn my personal obsessions into an actual business. The nice thing about the OCD approach is you're going to do that hobby anyways. Job gets demanding I just take a break from the project but still I get 100 new users a month, which isn't tough for a free product but using the google play store I have no hosting costs for my app. Plus 100 users a month builds out a base for me to market my much more complex commercial app to once I've competed it.

shams93 13y ago

In other words tackle a really difficult problem that is aligned to your personal obsessions, such as in case A instead of doing marketing to fund movies, learn to develop cloud based video editing software to fund making movies instead because you have to make movies to test your edits anyways and that niche is extremely tough to code for so the competition while its there is very low.

clarky07 13y ago

Moral of the story doesn't have anything to do with passive income. The moral is to save some freaking money instead of spending every dime you have, and this is true whether you are making tons of money or just a little. (passively or not) Also, why has "Passive Income" become such an evil thing around here? It doesn't have to be a scam or BS or something. It could just be someone did a ton of work on the front end and then gets paid for it over time "passively". I make money off of software that I spent lots of time on that creates value for people. The fact that people keep buying it now that it's done makes the income somewhat "passive" (still have to update things over time, but minimal relative to initial investment of time). There is nothing wrong with passive income. There is something wrong with doing scammy fraudulent things with affiliate marketing. These 2 things don't overlap entirely so stop acting like they do. Frankly, both of these stories sound like they mostly didn't do anything scammy. They just made a lot of money and then spent a lot of money. Lots of people do that all the time with non-passive 9-5 jobs, but they don't get on the front page of HN.

wslh 13y ago
> why has "Passive Income" become such an evil thing around here? In general the lifestyle business is criticized here, but ironically at the same time people who build startups are acquired by their skills/talent more than from the startup itself. At the end both are lifestyle businesses except if you are the next Google/Facebook/Microsoft/Apple/IBM or if you are Dropbox and refuse to be acquired by Apple!

holdenweb 13y ago

"I've learned that luck and timing are definitely part of the equation." A lesson for us all there, if we choose to listen to it.

jlees 13y ago

Meta-comment on the article itself: Story 2 seemed unrelated to passive income until I clicked through to the original HN comment and realised the blog post author hadn't quoted the line about Ziad being a passive income hacker. I find these stories reinforce my (already negative) impressions of the "passive" income/affiliate business; if the purpose of this post/blog is to promote the "hacker's guide to passive income" book-in-progress, it certainly failed.

ChrisNorstrom 13y ago

Suddenly that advice from Paul Graham about "do things that don't scale" make even more sense. If you want a space and its profits all to yourself, pick something that has a high barrier to entry, and isn't easily scalable. The more something takes time, effort, money, skill, talent, and endurance the less competitors you'll have.

mkartic 13y ago

I have a few questions. I am hoping to implement/try out making some passive income here, as I have enough free time to invest. 1. While I know its hard to replicate the $5000 day, how hard is it to profit $5/day consistently? How much effort would that require? 2. As a student working my way through college, any income that doesn't require an all day desk presence sounds very lucrative! Can anyone point me to where I can get started? 3. Searching the web for affiliate marketing seems to take me to the scary underbelly of the Internet which I'm afraid to scratch. Any definitive resources? Where does one find websites that offer money for clicks? Is there a standard platform or does it work company by company?

schappim 13y ago

It seems the OP himself is generating passive income by creating an ebook on generating passive income. See: https://leanpub.com/passiveincome https://leanpub.com/passiveincome

mkrecny 13y ago
Actually I run http://followgen.com http://followgen.com ... eBooks aren't an interesting form of passive income to me as there's no real potential for recurring revenue. SaaS all the way, please.

SpookSEO 13y ago

I've met a lot of affiliate marketers as well that can't handle the money. They're like athletes who are paid millions of dollars but still end-up broke in the end because they do not know the value of saving and preparing for the rainy days.