
Ask HN: Passive Income Suggestions 2016 - drumttocs8
Similar questions have been asked in the past, but things change quickly. What are some passive income strategies that have worked for you in 2016?
======
mmastrac
Perhaps a negative example might be interesting? I started working on game-
development tools in 2015 and have sold a grand total of $0. Granted I have
been contracting for the last year and haven't done development or marketing
for a few months, but I would say it's a clear non-success.

If you're curious what it was, it's here:
[https://codano.com/typeforge/](https://codano.com/typeforge/).

The reasons I've probably done poorly:

1) I haven't spent time networking with the people who are the market of the
product. I worked with a few people on /r/gamedev on it last year, but never
followed up.

2) There's a lot of other tools in this space, some free, some not-free (but
platform-limited) and I haven't distinguished myself from any of those.

3) There's not a lot of supplemental material to suggest how people might use
the product and why people might want to use this product over any others.

EDIT: and if you want a free license for kicks, just email me (see my
profile).

~~~
kinnth
Game Industry Vet here. Unfortunately middleware or tools for gaming have gone
to the 0 margin, free area. Mainly because 99% of game generally don't make
much money so people dont invest heavily. Those 1% that do make a lot of money
tend to invest in the their own tool development or want to retain control of
their middleware hence less money in the pot.

Another interesting point, IMO, is that game development attracts very capable
developers. Thus they tend to be very adept at finding things for OS instead
of forcing the company directors to buy large licences for convoluted software
they don't need :)

~~~
shazow
I'm finding that people spend way more money in the rough prototyping phase
than during the "ok let's build the real thing" phase. Especially in things
like asset stores.

Myself and a bunch of friends working on VR stuff easily spend $10-50 on a
random helper to get a prototype done in a few hours rather than a few days.

~~~
eatonphil
That is really interesting. I think definitely find myself doing this as well.
It's easy to justify both personally and professionally. Thanks for bringing
that up.

------
callmeed
EXISTING:

1\. Rental properties. Have 3 rentals that we purchased last year as part of a
1031 exchange (after selling the family ranch). I manage them and its been
fairly low maintenance so far (knock on wood). FWIW student rentals in a
university town aren't as bad as you might think. Most have a steady source of
rent (parents or financial aid) and if you choose students in hard majors,
they're less likely to party and trash the place (my theory).

2\. Niche websites. I'm silent partner in a company that does website design
and hosting for a niche industry. Obviously, we have people running operations
and support so its only _passive for me_ , but it makes a lot of money. I know
Wix and Squarespace and Weebly are the big players here but _tons of small
businesses still need help with their website_. Don't overlook something you
think is a solved problem.

IN THE WORKS:

3\. Jekyll-based landing pages. I think Unbounce and similar services are
overpriced if you're just experimenting. So I've built a few landing pages
specifically for Jekyll. I've ran a few tests with an attorney and another
small business. Going well so far. Plan is to sell them as a one-time purchase
for $29 or so. Just need to find a front-end/design partner to help crank out
a few more layouts.

4\. An API for lists. This might sound weird but I always needs lists of
things in projects I make. Think "all the currency codes" or "all the
universities in the US". So I've built some scrapers for a bunch of lists and
plan to provide them as a simple API or YAML/PList downloads (for iOS apps).

5\. Apple TV stuff. Got some Apple TV stuff in the works. Just not sure how
that platform is gonna play out.

~~~
AznHisoka
On lists I'd want: \- a list of all possible domain name tlds (org, edu, info,
etc)

~~~
alexbilbie
[https://publicsuffix.org](https://publicsuffix.org)

------
mancerayder
Bought a multi-family house in a hot housing market using an FHA loan. Yeah,
you do have to intend to live in it. But FHA will make it possible to purchase
a 2,3 or 4 family rental property with little down (as low as 3.5% but really
depending on loan limits, which vary by county, here it's about 800k,1m,1.2m
respectively).

Once I acquired the property (no easy feat since sellers favor cash buyers
here in NYC), I waited a few months and refinanced out of the FHA into a
traditional loan, since my property went up in value. The 15% I put into it,
plus the equity, gave me the 20% figure I needed to refinance. That shaved 25%
off my total monthly cost, saving me $900 a month.

I have a tenant in one unit, and now I pay less for a duplex with a backyard
and land in the second most expensive city in America, than my neighbors pay
for a 1 bedroom apartment. Soon I plan to fix up one floor of the duplex and
AirBNB it, so I will have literally 0 monthly housing expenses.

Passive? Mostly! But I also have a tax shelter (mortgage interest for one
part, and repairs for another part), build equity and go long on a hard asset.
And I pay less for a whole house including taxes than my buddies who bought
condos do for single apartments.

The passive income will scale with inflation since it's rent, while the
mortgage will stay flat for 30 years.

~~~
thebiglebrewski
What neighborhood? I've been looking but NYC real estate just seems hella
expensive and bubbly. So you're living there too?

~~~
mancerayder
Bed Stuy. I'd look there, Bushwick, eastern Crown Heights, Ridgewood, and
similar neighborhoods with quick travel to Manhattan and near trendy areas.
Bubbly? Maybe, but if your rental income covers or can cover the mortgage then
it doesn't matter, is my rule of thumb, it's a great deal. The city has 500k
more inhabitants in between 2000 and 2010, rent has only one direction to go
given scarcity of housing - - while mortgage costs are fixed! I figured land
had to be a good idea to own given that. Crime is more of a concern at the
moment, I think the investment is solid.

~~~
thebiglebrewski
Hey, that's really awesome. I'd really love to hear more about this from you
personally! I live in Crown Heights right now. Would you be willing to maybe
grab a coffee sometime? If so shoot me a message at zachfeldman at gmail!

------
baccredited
My approach is simple: invest the vast majority of all money after expenses
into VOO (S&P 500 index fund). First max out tax advantage accounts like 401k
and IRAs, then regular accounts.

I have $1,100,000 in VOO. Trailing inflation adjusted returns are 7% ish. Call
it $25,666 for the first 4 months of 2016. I KNOW market returns aren't smooth
like this but it is a simple approach that works for me (I'm not selling this
stock any time soon so ACTUAL returns thus far in 2016 don't matter to me at
all).

The math to get to that number is (($1,100,000 x .07) / 12) * 4 months

~~~
kdamken
This is awesome - congrats on your success and saving. This is pretty what my
financial strategy is. In another comment you said you first bought stocks in
1993 - were those the VOO or did you play around with buying individual ones
for a while?

Any idea what the average amount you put in each year was? Just trying to get
a feel for how long it will take me to hit that kind of number.

~~~
baccredited
Save 2k a month and you can do it in 21 years. I'm saving more like 5.5K/mo
now.

This is a great read: [http://www.mrmoneymustache.com/2012/01/13/the-
shockingly-sim...](http://www.mrmoneymustache.com/2012/01/13/the-shockingly-
simple-math-behind-early-retirement/)

~~~
wallzz
2K is my salary!, I can't save more than 500euro

------
louisswiss
I have found the best side projects to be monetized versions of stuff which I
built for my startup to save me time.

A recent example is a script which I originally hacked together to check for
possible IP changes/submissions (copyrights, patents, trademarks etc) which
might affect my startup's own IP.

It didn't cost very much to SaaS-ify the original script (outsourced using
upwork.com) and after sending out a few emails and shoutouts in newsletters,
events etc I have a pretty decent side-income from private clients and law
firms (pays the rent & yearly holiday hopefully).

The hard part is making sure you don't let it distract you from your main
project/job - I am at 3-4h/month and don't let myself go above that!

~~~
shanecleveland
I've done some of this. Made some internal tech tools for non-tech business.
Figured our problem may be one others also have, so made generic versions
hosted online. A couple have become popular, but we're only talking hundreds
of $$ each month.

------
tylercubell
I built a themes website ([https://jekyllthemes.io](https://jekyllthemes.io))
in a weekend that's monetized using affiliate links and Adsense. After the
initial work was done, it's virtually 100% autopilot and brings in around
$80/mo.

~~~
shanecleveland
What sort of traffic numbers do you get, and how do they discover you? This is
the sort of thing that I believe can be easily duplicated. Not copied, but
translated to different ideas.

Generating traffic can be difficult, so the subject, plus actually useful
content, is important.

~~~
tylercubell
In the last 30 days the site received 27,000 page views and 7,000 sessions.
Organic search made up 80% of traffic. The concept of a curated list for XYZ
can be translated for other ideas, sure. Getting traffic was part luck for me.
At the time it was a low competition keyword but now there are a lot of
similar sites up.

~~~
shanecleveland
Good info. Thanks. I've had similar experiences where, with some luck, I've
hit upon a keyword/subject ripe for the picking or perhaps just too small or
specific to have generated much competition up to that point. It's fun when
you find something like that! The hard part is know when you've found it (or
not).

------
shazow
I've been running [https://briefmetrics.com/](https://briefmetrics.com/) for
almost 3 years now (email reports of your Google Analytics).

It has been going back and forth between 100% running itself and investing a
couple months of effort into it. I discovered I really don't enjoy
marketing/promotion, so it has languished for sure. It's up to a bit over
$1,000/mo right now which I'm fairly happy about but I feel it could easily be
x2-x5 of that with some sales effort commitment.

I'll write down some lessons I learned in hopes that I'll take my own advice
in the future:

1) Avoid big-effort partnerships.

Briefmetrics was a partner in an app store launch for one of the biggest
domain registrars. This required integrating with their single-signon and
payment system and coordinating with their team in India and altogether what
looked like a week of work turned into ~3 months of hell. A year later, all
this effort yielded approximately 0 customers. The target audience fit was not
very good (new domains is the worst time to get analytics reports) and the
sunk cost of effort kept me going far longer than it should have.

I finally pulled the plug last month and I sleep much better. (Even pulling
the plug took weeks longer than it should have, ugh. Never again.)

2) Commit effort to marketing/sales.

This is definitely advice I need to take for myself. I launched a bunch of new
features to upsell existing customers (mobile reports, ecommerce, etc) but
none of this is advertised anywhere for new customers. In fact, I've had a
professionally-done redesign mockup sitting in my Dropbox for over a year now
that I'm yet to implement. I have a half-dozen related blog post ideas I need
to write about, audiences to target.

I'm seeing a lot of similar issues with other people here, "I built this but
they didn't come." I feel you.

3) Seriously, do marketing/sales.

I built Briefmetrics because it's something I needed and my friends needed. I
instantly had a set of initial paying customers, but organic growth from a
small seed of users is slooooooow.

Meanwhile I see great salespeople grow to tons of customers on what amounts to
a product cobbled together in a few hours. This totally makes sense to me, and
we all need to respect it more.

I'm allocating a couple of weeks on the calendar to just focus on this. If you
built something you're proud of, you owe it to the world to do a better job
promoting it.

~~~
taphangum
Dude, you should definitely raise your prices. I would pay at least $19 a
month for this. Had to double take when I saw $8 a month.

~~~
shazow
Let's talk after you start paying. I'd love to hear how you're using it and
how it's providing value for you—and even get a testimonial for the frontpage!
:)

FWIW there are multiple tiers: $8/mo, $35/mo, $85/mo, $275/mo and I have one
custom-priced "enterprise" client.

That's another lesson I learned: The kinds of feedback I get from paying
customers vs drive-by trials is completely different and often opposite.

~~~
taphangum
Ah, didn't realise there were multiple tiers. I thought you charging one flat
price for everything. My bad! :)

I'd actually like to create a similar sort of service for a different niche,
so find this very interesting. I'll definitely sign up and test it out. I'd
also love to email back and forth to ask one or two questions about how you
came to choosing certain data points over others. Will shoot you one after I
sign up.

~~~
shazow
Looking forward to it! andrey at briefmetrics.com (or support or whatever at
that domain) will do the trick. :)

------
vital101
I build a developer tool for premium plugin / theme authors in the Wordpress
ecosystem. If you can build something that scratches an itch in a programming
ecosystem, people are likely to pay for it.

Although with the amount of work I do on it, I'm not sure I'd call it passive
;)

~~~
coreymaass
I'm right there with you. I have a free core plugin with add-ons, and while
it's made more money than any of my previous ventures (plugins, SaaS apps),
I'm no where near recouping my hours, and I'm currently in the middle of
rewriting the whole thing...

------
bwb
Small pitch, I am the owner of Pressed
([https://www.pressed.net](https://www.pressed.net)), and we do white label
managed WordPress hosting. So anyone can sign up to create their own Managed
WordPress hosting brand, and refer clients to their brand and build recurring
revenue. Our team handles all the running, support, etc for the brand so you
can just sit back and feed customers into it.

Pretty passive :)

~~~
codegeek
Genuine question. How can a managed hosting service be passive ? Specially
since you handle the running and support.

~~~
ceejayoz
Passive to the resellers, I'd imagine.

------
mertevinski
Peer to peer lending is the best thing I have found this year. You can get
around 5 to 7 percent interest and you don't need a large amount of capital.
With all the other financial markets so volatile right now this is a pretty
solid rate of return. There are always risks of default that you will need to
consider, but most platforms allow you to mitigate that with automated
diversified portfolios.

~~~
jonknee
Careful though, you can quickly be picking up pennies in front of a
steamroller. It's a low amount of interest for unsecured debt and when you
don't get the principal back that 5-7% suddenly seems not so high.

And "automated diversified portfolios" is exactly what mortgage backed
securities were a decade ago. Look how that turned out.

~~~
ngould
Mortgage backed securities were not risky because they were diversified. They
were risky because nobody fully understood how undiversified they were,
especially at the lower grade tranches.

Meanwhile, LC was alive in '08, and you can look at how their notes performed.
Investors lost single digit percentages. In other words, they beat S&P by a
lot.

~~~
akg_67
> Meanwhile, LC was alive in '08, and you can look at how their notes
> performed. Investors lost single digit percentages. In other words, they
> beat S&P by a lot.

Comparing performance of 2008 vintage loans with 2008 S&P may not be
appropriate.

First the 2008 loans didn't completely pay off until 2011. Second, the loans
issued during recession (2008) will perform better during recovery phase (2008
onward). Such borrowers are likely to be with stable credit worthiness due to
tighter credit criteria by lenders during recession. Also, as borrowers'
economic condition improve with recovery, they are more likely to continue
making payments instead of defaulting.

The worst performance for unsecured loans is generally for loans that were
issued to borrowers during boom time and as economy is headed toward recession
(2005-2008). Any event that impacts borrowers capability to make payment will
impact first unsecured loans, credit cards, etc.

Federal Reserve (FRED) has quite a bit of data on different type of debts and
how they have performed over the years if you are interested in exploring this
segment further. I find the debt/lending/fixed-income/bond market segment very
fascinating. It is generally not explored in-depth by most people and very
quant/maths heavy.

------
mstipetic
I just created [http://namestormy.com](http://namestormy.com) to solve a
problem I had, which is finding relevant free domain names.

I've hacked it together one morning and in a few days it got featured on
product hunt.

I have some features (like automatically filtering domain names without the
paid api) rolling out soon and I hope that could make a nice passive income.

------
sparkling
I recorded some tutorial/lesson videos on niche tech topics and put them on
YouTube. Spent about 40 hours creating and editing the videos. They have been
online now for nearly 10 months and i have a total of ~250k views. That made
me nearly $300.

Not a ton of money but considering it is truly passive and will probably be
making another $500 in the next 10-15 months its acceptable.

~~~
placeybordeaux
Did you already have some experience creating/editing videos?

~~~
sparkling
Yes, some experience. I should also mention that i purchased a entry level $50
podcasting microphone.

------
leeu1911
Another fail example from me:

1\. My friends and I were building an app named OrderIt. It's basically
targeted to be used by waiters / waitresses to order food and beverage for a
restaurant or coffeeshop instead of using paper and pen. The idea is not new
but we aim to make it even easier for businesses by providing cross-platform
apps and useful features. We have the app prototype ready but failed to do
marketing/sales stuffs in the last three-month which means no customer at all.
All of us coming from tech background who have no idea about marketing and
sale stuffs. We also open-source source code for Android app on github for
anyone interested in
([https://github.com/leeu1911/orderit](https://github.com/leeu1911/orderit)).
We have no idea about business model and how to make money out of it
currently.

2\. I've built a website to use with Pomodoro technique (a time management
technique). [http://web-pomodoro.herokuapp.com/](http://web-
pomodoro.herokuapp.com/). So far, there's only me using it although it has
around twenty views or so when I share the link on facebook. I need more
seriousness I guess.

------
eibrahim
I am working on a newsletter for frontend developers and plan to monetize it
with sponsorships and job listings. I can't keep up with all the news out
there related to frontend development and thought others might be interested.

It will not be 100% passive but since I am already reading those articles
anyway, adding them to a weekly newsletter should be relatively passive. If
things workout as planed then best case scenario, it should generate me
$2000/month.

The first issue comes out June 1st at
[http://frontend.curated.co](http://frontend.curated.co)

PS: If you have tips on promoting this and getting the word out let me know. I
am running some targetted twitter ads for now and got a good amount of
subscribers. My goal is to get it to 5000 subscribers very quickly.

------
rm_-rf_slash
One technique I have seen work fairly well is web development with a retainer
for X hours a month done free of charge, with an hourly rate following.
Customers tend to like having someone on call that doesn't tend to cost any
extra.

Unfortunately, the market is never that big, since WordPress (and bigcommerce
etc) covers most small business needs and any business of a decent size have
dedicated developers or a contract with a dev shop.

------
quicksilver03
I wrote a book to help boostrapped startups choose the best hosting solution:

[https://www.hostingforappdevelopers.com/](https://www.hostingforappdevelopers.com/)

It hasn't sold much yet, but I haven't been able to dedicate as much time as I
would have liked to marketing it.

------
saosebastiao
If someone wants to beat Stripe Atlas to the LLC formation game, I'll be their
first customer.

~~~
callmeed
I'm confused. There are plenty of services (LegalZoom) that allow you to form
a Delaware corp/llc now. What exactly does Atlas offer that's new? Is it just
a focus on non-US citizens?

~~~
saosebastiao
It's the packaging of all of the other deals. Setting up bank accounts,
preliminary basic legal advisory, accounting, etc., not to mention all the
other benefits like AWS credits and introductory promo offers on B2B Saas
vendors. The Atlas offering is quite compelling as a package, with the
exception of needing it to be for a C Corp.

------
kabalweg
I built [http://www.randomnamepicker.net/](http://www.randomnamepicker.net/)
last year and now get's $30+ per month from Adsense. Complete passive except
for few updates here and there.

~~~
kleer001
slight correction:

"click the 'Spin' button."

Nope, button clearly says 'Play'. Might wanna fix that.

Also looks totally sweet :)

~~~
kabalweg
Thanks for the feedback. I'll fix this in the next update. :)

------
panorama
Last year, I wrote a guide to help junior devs get their first jobs, targeted
mostly at developer bootcamp grads: [https://kokev.in/hired-
fast](https://kokev.in/hired-fast)

It sold decently in 2015, and later that year I shifted sales focus to
bootcamps and schools as opposed to individual students. The response has been
great and earlier this year I've set up a few recurring deals for batch
purchases. It's not life-changing money by any means, but it's great to see my
content helping people at "scale" ;).

------
benologist
Make something that makes money. It can't be passive income without income.
Figure out all the stuff you do to keep the money earning. Simplify that
upkeep until it's a well documented set of steps or a nice web interface or
something anyone can do. I'm finishing this part at the moment, having spent
months converting my entire app business into an online dashboard.

Then you just need to find/pay someone to handle it for you. Lots of people
online and in the real world are very well suited to well defined tasks they
can 'just do'.

------
hgears
It really depends on your skillset... if you code or do creative work,
building a theme, shooting stock photography, or creating music with low
licensing fees are all good things.

I found this Inc article from January of this year pretty on point as well:
[http://www.inc.com/sujan-patel/you-don-t-need-to-be-a-
millio...](http://www.inc.com/sujan-patel/you-don-t-need-to-be-a-millionaire-
to-use-these-10-passive-income-strategies.html)

~~~
derwiki
Highly recommend against stock photography. Especially with sites like
Pixabay, it's a race to the bottom. And when I sold stock photos ten years
ago, it wasn't that profitable anyway.

------
sharemywin
I'm working on a for people looking to build equity in products. I'm just
starting to work on this so no revenue yet, but thought this might be an
appropriate thread to mention this.

So, if full-time isn't an option and your looking to work with a team because
you don't have marketing, programming, design, administrative, customer
service skills. email me.

