
Ask HN: Your best passive income sources? - buf
Previous post 1 year ago: https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=4639271
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dangrossman
Depending on what you consider passive...

My "best" passive income source would be subscription revenue from SaaS
businesses. I run several, with no employees, with growth from existing
marketing and word-of-mouth outpacing churn, and no active management needed
other than answering customer e-mails. Everything that can be automated is
automated, from backups, to monitoring, to lifecycle and dunning e-mails.
Improvely ([https://www.improvely.com](https://www.improvely.com)) is the
newest, just over a year old now, and passed $10k/mo RR not too long ago.

If that's still too much to qualify as passive, the stock market contributes
the next largest chunk of revenue. Of the money I put in equities, 2/3rds are
in index funds (primarily total market stock and bond indexes), and 1/3rd in
hand-picked tech companies. The market's been good since the recession crash;
better than a 25% annual return.

My most passive income is from revenue sharing affiliate/referral agreements.
I work with a lot of small businesses with websites, and refer them to vendors
for merchant accounts and advertising services as both publishers and
advertisers. For all three, I found good companies to work with that pay a
percentage of referrals' spending for the life of their accounts. There are
businesses I referred for credit card processing almost 8 years ago I'm still
getting a monthly commission check of several hundred dollars a month for,
each.

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DougWebb
I just skimmed through the Improvely website; it looks great. I'd never guess
that there was a single passive developer behind it. Can I ask what your
investment was in building it?

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spiredigital
Drop shipping eCommerces sites. I've been doing this for 5+ years full-time.
Starting out - like anything - you need to do a lot of the legwork yourself
but now I only spend a few hours a week managing my team and it provides a
healthy full time income. And with drop shipping, all the fulfillment,
purchasing and warehousing is handled by someone else.

I know drop shipping can get a bad reputation, but when done correctly it can
be an effective way to create a passive income streams. If you can program
well, I'm not sure if I'd recommend it over a SAAS based approach. You'll
likely be able to make more money with SAAS as you're creating your own
products vs. selling an existing one. But the long-term upkeep is generally
less for eCommerce vs. SAAS (guessing here, as I've never run a SAAS
business).

Margins are a bit lower with DS, so it does take a while to build some organic
traffic and marketing buzz. But once that starts to gain some traction, it's
not too much work to get a team in place and automate things. And if you're
willing to put in the time to make a high-quality site that addresses customer
questions and buying hesitations up-front before the sale, it's even easier to
automate on the back end for support.

But you do have to be careful about niche selection. Because drop shipping
markets are fairly competitive (low barriers to entry), you have to be really
selective about what nniches you get into. Specifically, I like to see really
confusing niches where I can add lots of informational value, plus lots of
accessories I can sell to increase overall margins). For anyone who is
interested, I wrote a blog post on the three crucial things I look for when
picking a niche for eCommerce and drop shipping:

[http://www.ecommercefuel.com/anatomy-of-profitable-
niche/](http://www.ecommercefuel.com/anatomy-of-profitable-niche/)

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gmays
Residential real estate investments, mostly in San Diego, CA. I bought during
the dip '08 to '12 and rent them out. Property managers take care of all of
them for me. Most are condos, which are significantly better for cash flow
than single family homes.

I got pretty lucky with them. One one I distinctly remember I bought for less
than half of what the people losing it (short sale) still owed. They were all
in pretty good condition, I just replaced the carpet, painted, made minor
repairs, and replaced appliances.

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contergan
Social welfare sponsored by the tax payer.

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throwaway889955
I enjoy having side projects and currently have 4 active ones that could
realistically make at least a some money. But as a foreigner in the US (came
as student, now on H1B visa) it's the unfortunate reality that it is illegal
for me to pursue money-generating side projects. I am curious to hear if other
foreigners have found ways to legally pursue their side projects while living
in the US.

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iamben
I have absolutely no idea how this works, but can't you just put it through a
bank account/company you set up in your home country and pay tax on it there?

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gfodor
fixed income. muni CEFs are trading at a 10% discount to NAV. overall fixed
income is under pressure due to fear of rising interest rates and fed
tapering, so future interest rate hikes are partially priced in both in NAV
terms and in discount. if you don't have any plans on selling your bonds (and
hence, don't really care about the day-to-day price fluctuations of bond
funds) and just want an income stream you could do worse than loading up on
discounted, diversified CEFs that pass the smell test of being able to sustain
their distribution.

the main risk here is inflation risk. if inflation in the country takes off
your 5% yielding (likely 30% leveraged) bond fund is going to start to see its
real return get eaten away quickly.

the alternatives are equities though. and right now the stock market is pretty
scary to me.

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mjn
I'm no bond expert, but aren't munis discounted in part due to default
worries? There's a fear that a second wave of municipalities that survived the
first wave of post-crisis bankruptcies may still succumb, since many avoided
default by doing miscellaneous stop-gap and accounting tricks that may not be
repeatable. Hence a risk premium.

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gfodor
Yes this is likely part of the reason but in general the discount arose due to
the fed tapering issue since the discounts on all fixed income have widened
together since. Regardless, a particular muni fund will be exposed to
thousands of municipalities, so default risk is essentially diversified away,
particularly if you invest in a managed fund where the fund managers have a
track record of understanding the municipalities they invest in. Unless you
are a devout believer in the efficient market, one could argue that the
discount could in part be due to irrational investors selling their munis to
buy equities in a media environment where scary headlines about Detroit going
bankrupt are on CNN and Facebook stock doubles since it's IPO.

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zachlatta
I sell bitcoin on localbitcoins.com with a 5% profit margin. I wrote a set of
scripts that automates the entire process for me, making it completely hands
off. I've only been doing this for a month or two, but I've made a decent
amount.

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ElbertF
Not completely passive but I run
[http://wappalyzer.com](http://wappalyzer.com) which is very low maintenance
and a decent secondary source of income.

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brk
Server hosting. $50/u. Bring your own 1u box. The datacenter I'm affiliated
with handles any hot-hands stuff. It's 99% passive for me.

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gesman
Affiliate commission checks from services who pay recurring commissions for
referrals. These are truly passive - about $100/mo

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wmaiouiru
What is your website? Who did you get started?

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BennyH26
After making nearly $0 per month for the first year (yes, you read that
correctly), [http://www.pingmate.com](http://www.pingmate.com) now generates
excellent RR, though the first year was far from passive.

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sourabh86
Two Android apps I made on weekends. $50/mo ad revenue with just admob.

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cko
Single family rentals (SFRs) which cash flow. I put 20%+ down on properties in
solid locations (strong population/job growth, safe neighborhood, etc.). I
save about 80%+ of my after-tax income.

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iamchmod
I second the Single family rentals (SFRs). Follow the 12% rule which is that
the house HAS to rent on an annual basis for at least 12% of purchase price.
For example a $100K house has to rent for at least $12K per year
($1000/month). So put 20% down ($20K), get a 30 year fixed for $80K. Your
expenses on monthly basis are mortgage + prop tax + prop manager + prop
insurance = $500-$600. Rental income = $1000 per month. So you clear $400-$500
per month ($4800-6000/year) per rental property. With 20% down ($20K), that's
a ROI of right around 20% before any property appreciation. Note: I didn't
include closing costs which fluctuate a fair bit depending on lender and where
the property is.

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lukio
Games. I release one browser game (kinda like Travian or eRepublik, but
simpler) pretty much every other month and they are actually a very good
source of income. They pay all of my bills.

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vocatus
Bitcoin mining.

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Artemis2
Is that still working? With with hardware?

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vocatus
Ten friends bought in with me on a bunch of BFL hardware way back in the day,
so we were fortunate enough to be ahead of the curve. It is quickly becoming
less profitable though.

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Artemis2
CodeCanyon. Not very much, but that's cool to get 100$ each 2-3 months.

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Ryel
AirBnb ebooks hosting reseller (singlehop)

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Kranar
Buy shares of SPY and collect dividends.

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latch
dividends

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davidsmith8900
\- Freelancing

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rbchv
This isn't passive.

