
Ask HN: Do you have a daily cash stream? - wprapido
I&#x27;m a web and software developer. Contracting and been running on and off various online businesses, with varying degrees of success. Just like everyone else, I had periods of feast and periods of famine.<p>A few days ago I was talking with a friend of mine who among other businesses in Ireland and Croatia runs a bar in Zagreb, Croatia. His reasoning behind running a bar is that the bar serves as a daily cash stream. Something definitely we all need and something that helps a great deal.<p>Anyway, do you have a side hustle like that, and what is it?
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rsynnott
> His reasoning behind running a bar is that the bar serves as a daily cash
> stream

Of course the downside is that if things go wrong it acts as a daily cash
sink, instead. Most businesses, especially retail/catering businesses, fail.
Don't get into that unless you know what you're doing.

I have a daily cash stream; it's called a job.

~~~
pikklemonster
With some few exceptions, in my experience, bars are awful investments. Did a
tech company which sold tech solutions to this space and got to see the books
and behind the scenes at many dozen bars (and restaurants / coffee shops /
frozen yogurt stores / etc).

Even before pandemic few of them netted any real significant profit after all
expenses, and those that did managed to pull it off largely because if highly,
highly engaged owners constantly on-site day in and out.

There is a huge number of people who think they can invest $20K (or $200K) in
one of these businesses and hire a GM and sit back and take profits. I can
think of maybe one example of that I encountered in 5 years.

Is it technically possible? Sure. Is it even remotely likely? No way.
Especially if you didn't cut your teeth "In The Industry" and know all the
things you need to know about shrinkage, vendor fraud, the politics of liquor
licenses, et al. Nightmare fuel.

~~~
mod
I'm a bar owner.

I see some truths and some falsehoods both in your statement, for sure.

My business partners at the time and I started our bar for under 30k. It was
an existing bar, but a terrible one--day drunks, no regular customers had a
job, and the two taps were Busch and Busch. But it had a big unused area we
wanted to get up and running, which we did quickly. But to be clear, we were
rank novices. I was 26 and had never had a sip of alcohol. My family had zero
entrepreneurs. I did not have a runway, I was all-in.

We worked our asses off, working behind our own bar for 100% of the shifts.
Not only did we not have a GM, we didn't even have bartenders! Kept our own
books, did our own taxes. Ran our own pool tournaments. Everything. For over a
year, I think, before we finally hired one bartender a couple of nights per
week.

I've since bought out my partners, and I make a good living at the bar, but
still no GM. I have a "manager" I trust who mostly deals with scheduling the
staff and ordering product. She's a bartender who spends about 8 hours per
week on managerial duties. I still do the books & taxes, and make all the
higher-level decisions. On a given night, if I'm not there, the bartender is
the boss. Cooks and security guys answer to them.

Our state issues liquor licenses to basically everyone, very cheap. There's
not a limited supply like other places. We think we made it through
perseverance. The first few years were not good money. We're 10.5 years in
now, and I've had other positions in that time, including being a remote web
developer for five years.

I don't think I'd recommend it for most people, but I do think you can will
your way through the rough times into a profitable business. Staying power is
worth something in this industry.

Also, if anyone ever reads this, here's my best lessons distilled down. At
least it's what makes my place work well.

1) Hire honest people. It's very easy to steal at a bar, so an honest person
who can't make a drink is a much better hire than a dishonest bottle-flipping
whiz kid. You can train (almost) anyone. 1a) Don't be afraid to let go of
someone you need to. There's always a fear you'll piss off your regulars; it's
highly unlikely and worth it regardless.

2) Stay open as late as possible, and never close early. People have to know,
beyond a doubt, that you will be open if they drive to wherever you are.

3) Have a flat top and a fryer, and base a whole menu on that. Make good food,
it's not difficult.

4) Own your own machines. Pool tables, juke boxes, etc. They pay for
themselves very quickly. If you can have cherry machines and pay cash
(probably a gray area at best), definitely do that. We can't, but maybe you
can.

5) We went cash only about a year ago. Our sales continued increasing until
covid, and by placing an ATM with no fee, nobody is disgruntled. Saves me
countless thousands per year in credit card percentage fees, although I have
to manage keeping the ATM stocked.

6) Ban people who are a problem, and ban them permanently. A guy who starts a
fight once will always start a fight again. Cultivate a respectful environment
where nobody (including single women) feels harassed or awkward or whatever.

I personally think that's a decent recipe for a can't-lose bar, as long as
your lease payment is small enough. For reference, ours is $1610/mo for a
6,000 sqft building. Business can't lose, but your personal life and finances
could if you aren't making any tips behind your own bar. Definitely worth
thinking about.

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dmje
Web guy here (more PM than developer). The two things I've done to keep the
(unavoidable) feast/famine cycle at bay are:

1) keep two work bank accounts, one for daily use, one savings, and syphon off
more than needed from daily > savings when invoices are paid. Example: client
pays us £5k. We know we need to put aside corporation tax (we're UK based) of
20% on profit, but instead we put aside 25%. After a while of doing this you
end up with a nice chunk of cash in the savings pot for any really famine-y
times.

2) Retainers and ongoing "low effort" rolling work. We've got a bunch of
clients on board who pay us for hosting, maintenance, the odd fix - they pay
annually so it's a good "known" source of income without varience. I mean,
obviously sometimes they churn and decide they don't need us any more, but for
the most part it's solid. This second source is also good because we offer it
whenever we do new work - so typically a project will pay for the project but
then also for the ongoing retainer as well.

The second thing is important to note for developer type people I think -
namely, people pay for things that you (as developer) wouldn't necessarily pay
for. I'm surprised at the high percentage of clients who sign up to
maintenance agreements (it's north of 95%), purely because they want someone
onboard who will hold their hand / look after stuff that they don't
understand.

So I guess I'm saying - do a side hustle, totally - but maybe start by looking
closer to home. Existing clients are really, really easy to sell to, easier
than a new project and probably easier than working in a bar, too :-)

~~~
wprapido
Nicely put. Retainers are indeed a great revenue stream. Yet, I was thinking
more in terms of daily cash stream generated by regular quick cash
transactions. That's why I mentioned by buddy running a bar as his side
hustle.

~~~
rsynnott
Do you mean _literal_ cash? Why do you want that? It's extra work and cost to
deal with, generally.

Though increasingly bars are shifting towards contactless electronic payment,
anyway.

~~~
ethbro
I hear car washes are a good option. If I understand what we're really talking
about here...

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emit_time
I have a daily cash stream. I call it a job.

Also I keep a large emergency fund and save/invest the majority of my
earnings.

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voisin
A more reliable side hustle than a bar would be to own some residential real
estate and rent it out to respectful people. There’s a lot less work involved
than running an operating business, and if the property cash flows (rent
exceeds costs), you have a little bit of cash every month. There are also tax
advantages via mortgage interest and other expense deductibility, and some
“forced savings” as the mortgage pays down. The flip side is that real estate
has been absurdly overpriced in most markets for the last decade (thanks Fed!)
but the still-unfolding economic consequences of Covid19 may lead to an
excellent entry point.

~~~
notJim
> the still-unfolding economic consequences of Covid19 may lead to an
> excellent entry point

This kind of thing is what puts me off real estate investing. The idea that I
would be a beneficiary of an enormous crisis leaves a bad taste in my mouth.
I'm not stupid, I know that someone is going to make that profit, but it
doesn't have to be me. Similarly, the idea of putting myself in the position
of one day needing to deprive someone of their housing if they're unable to
pay is something I'd strongly prefer to avoid.

~~~
voisin
There’s other ways to look at it. If someone is forced to sell, they likely
took on too much leverage in the first place or didn’t save enough for a rainy
day. Those decisions aren’t your fault, and by buying when prices are low, you
are in effect giving them the liquidity they need which is a good thing.

Also, you never have to deprive someone of their housing if they are unable to
pay. You can work out payment plans and all sorts of compromises to get
through tough times and tenants will generally appreciate that flexibility.

The point remains - real estate is more stable for side income than a bar!

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chillacy
Around 10 years ago I wrote a mac app and put it on the mac app store, no
amount of marketing spend seemed to drive sales up significantly to be break-
even, but conversely even with no marketing, it makes on average $10 a day
(less the apple cut and taxes).

That doesn't seem like much but if I had 10 niche apps which did the same then
I'd have a pretty nice income floor.

~~~
Topgamer7
~$3000 a year doesn't seem like nothing. Especially if you don't put much work
into it on an ongoing basis.

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Topgamer7
I run a game server hosting company that loses me about $300 a month.

~~~
vidar
Do you have a plan to fix that?

~~~
Topgamer7
I can pair down a machine if I migrate some users, however its a competitive
market, and hard to sign up (and more so to maintain paying users)

~~~
madhadron
That sounds like a good business not to have, then.

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graeme
Daily is not really the frequency at which you should need cash. I have an
online business which generates a lot of passive revenue. But I have no idea
if it makes cash _every_ day. Pretty sure there are many days with zero sales.

But it reliably generates revenue. That’s the important bit. Needing daily
cash is actually likely a sign of poor personal cashflow management. You ought
to aim to have a buffer such that you could survive with zero cash for a
while.

Now, a recurring revenue stream: it’s great! Highly recommended. But daily is
not a good requirement.

And something like a bar has downsides:

* takes personal labour to make money

* High operating costs

* requires presence in a location

* currently, subject to pandemic restrictions

Now bars can be a great business! But for a software developer looking to
develop a revenue stream, your best bet is....software. Basically zero cost to
start. A bar would be a thing to do if you enjoyed it.

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notJim
The way your friend describes it is almost like money laundering or something.
I hardly use cash at all, why is a daily cash stream "something we all need
and something that helps a great deal"? I find that phrase kind of bizarrely
vague.

Like I think most people, I have a job which pays me every 2 weeks. What this
enables me to do is take some small amount of that money each day to cover my
expenses. I suppose if you wanted to conceptualize it as a daily cash stream,
you could simply divide the lump payment by (roughly) 14, but I'm not sure why
you would do that. Some days I spend a lot of money (when making a major
purchase, for example), and some days I spend none at all.

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tunesmith
This is also something you can kind of simulate through software, right? I
haven't used it myself, but it seems along the lines of what software like
YNAB is - setting future targets for budget categories, and then funding them
as chunks of money come in, such that for any particular day per time period,
you can see if you are ahead of or behind schedule.

Zooming out, there's a lot of tech theory on buffers and streams that apply. A
"JIT" stream is something that doesn't need a buffer if it's perfect and
reliable and consistent enough. The YNAB approach is more about using that
buffer.

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Havoc
Whether it's daily or monthly ultimately doesn't matter for anyone that has a
shred of budgeting ability.

Looking to build a blog, but not optimistic that it'll generate any real money

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madhadron
> Just like everyone else, I had periods of feast and periods of famine.

The answer is to have a buffer. Think of it like a queue. You are pulling
things off the queue at some rate with some variation, and stuff is arriving
at the far end of the queue with hopefully a slightly higher rate but with
much higher variation. In order to always have queue you can pull from, you
need a buffer in the queue big enough to handle the input variations.

Which is a way of saying, having however many months of living expenses in the
bank (six to twelve months, usually). Spend money you have already earned at
or below the rate that you are currently earning it.

Is having another income stream that makes regular money worth it? It depends.
We can assume that it makes less money than your irregular income or otherwise
deprives you of some benefit or need, otherwise you would ditch your irregular
income and do just that. In that case it's purely about how much reducing the
volatility of your income stream is worth.

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Kosirich
Not to steer the conversation, but perhaps what you are interested in,
considering the friend story, is if people have wealth (invested or created)
that provides them with some steady cash flow on a daily or monthly period
while not requiring full time (or near full time) commitment. (in my case is
an apartment that I don't get much rent out of, but is a very safe way to keep
wealth)

~~~
cvhashim
Passive income

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boldlybold
If you enjoy investing and can spend some time learning about trading options,
it can provide a nice income stream in a taxable account. Somewhere around
0.5-1.0% income a month is possible and reasonable without taking on extreme
risk.

Income from options on indices or futures is subject to 60/40 long/short term
capital gains tax and really helps keep the tax costs down.

~~~
atomicnumber3
This is irresponsible advice.

Options are potentially the most complicated common financial instrument and
modeling their risks is extremely difficult. Moreover, unlike equities, nearly
every single options trader is an institution (versus just ~most equities
trades being institutions). You are a tuna in a shark tank.

There are so many ways to blow up your account with options even if you think
you’re not doing anything too risky. Volatility crush, long tail risk,
complicated positions (butterflies and condors etc) that can be complicated to
enter and unwind. Etc etc the list is so long. Brokerages can try to paper
over some of these issues but the playing field here is inherently a highly
leveraged minefield. ~80% of all options expire worthless.

Retail investors should not trade options, it is not something to do lightly,
and is is certainly not something to do for pocket money.

~~~
boldlybold
I disagree. Not with the facts stated, but your interpretation of them. With
defined risk positions, the risks are easy to understand. Of course you can't
compete with the institutions, but should that be a reason not to invest at
all?

Again, with defined risk positions there is no way you can blow up an account.
Options expiring worthless works for you if you're a net seller. Others have
written extensively about strategies:
[https://earlyretirementnow.com/2019/03/27/passive-income-
thr...](https://earlyretirementnow.com/2019/03/27/passive-income-through-
option-writing-part-3/)

This is not something someone should do without the prior research. It's not
for everyone. But compared to something like opening a small business (which I
haven't done, but would consider very risky) at least in this "business" your
risk can be defined.

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quickthrower2
If it were me I’d focus on how to charge more money and how to get it sooner.
Negotiation, marketing, contracts etc.

And as others have mentioned: budgeting.

You shouldn’t need a side hustle to buy your milk and pasta. A side hustle is
more like a bet or lottery ticket.

Good luck!

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nawgz
What is the purpose of a "daily cash stream" to you?

To me, it just sounds like a savings account. I have money in the bank because
I have good financial management.

Why would I need to augment that with a risky side hustle?

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quangv
I recommend “The Money Book for freelancers”

