
Ask HN: Best Passive Income Method? - NinjaX
I am learning Python. I want to create some passive income streams while learning Python.
I have free time available around weekends.I am working on few ideas of my own, but those will not necessarily generate income.<p>Which method of the following would you recommend?<p>ebook in a niche technical topic SaaS product that solves a niche issue mobile or web based game
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ksahin
There is no "best" method for passive income. And I don't think "passive"
income really is that passive either.

But, my experience: I made a really niche eBook, about Web scraping with Java:
[https://www.javawebscrapinghandbook.com](https://www.javawebscrapinghandbook.com)

Writing the book was the easy part, I've been doing scraping for years. The
most challenging part was ... marketing of course!

I wrote 6/7 blog posts about this subject. In each blog post, there is a
paragraph that talks about the book. I shared those blog post to my mailing
list and on Reddit/HN (I didn't get any upvotes on HN...).

Now I have ~10 000 visits a month on the blog, 80% comes from search engines.
Out of these 10k visits, about 200 visit the book sales page, and I sell 10-15
copies a month for ~ $400-$500.

It is not that passive because I have to fight to stay on the first 3 links
for terms like "java web scraping" so this mean regularly upgrading my content
etc. If I don't do this, my rank will slowly decrease on SERP and the sales
too.

I was 24 when I wrote the book, I'm not even a native English speaker, you can
do it :)

If you go this way, test your idea by blogging around a subject, and you will
quickly see if people are interested by this subject or not.

Good luck!

------
cellis
I think there's only one way to earn passive income reliably at this point.
And it's not going to be easy ( otherwise, everyone on HN would already be
doing it! ). Here it is:

    
    
      1) Learn how to interview for top tier companies in your free time. 
      2) Interview at those companies. 
      3) Work at those companies really hard, make $300k/yr. 
      4) Work for 10 years, save 200k/yr. 
      5) Invest in ? 
      6) You've now achieved purely passive income on a $2million principle. 
    

I haven't done it, but I know people who have.

~~~
lhorie
If you work at a big bay area tech company, between a third to half of those
300k/yr are actually in equity (stocks), so step 5 is sort of already done for
you. There's also ESPP that lets one buy even more stock at a discount, which
is basically free money.

However, taxes and cost of living are also incredibly high, so realistically
you're probably not going to be saving 200k/yr (though you could probably
still save a cool 100k/yr without much trouble).

~~~
seansmccullough
You should sell your RSUs on rest and diversify. If you don't diversify and
something happens to your employer, your could lose your job, the value of
your home could go down, and your investment could lose a substantial amount
of value, all at the same time.

~~~
lhorie
Yeah, diversifying is generally considered a good idea. You can talk to
financial planners for help there. General rule of thumb, though, is get rid
of all your debt first and foremost if you have any, and do low/no commission
investments (e.g. ETFs). Of course, nothing really stops you from going all in
on FAANG if you're ok with high risk.

------
napsterbr
> web based game

I'll share my own experience here, which is: compared to SaaS products, games
are easily 100x more work for 100x less guarantees of income. Maybe it has the
potential of going viral and earning you 100x more income, but still does not
make up for the risk.

Of course this is just my personal experience on the topic. If income were my
main motivator, I'd focus on SaaS instead of games.

Good luck!

~~~
ineedasername
Sure, all else being equal this may be true. But as with most things, it
depends on quality & implementation of the idea. If the OP has a solid game
idea that they're even a little passionate about, that may count for a lot
more than grasping for a niche SaaS product that might have an audience.
Although if the SaaS projecy were itself to go viral, there's probably a much
larger upside than viral indie game.

~~~
lhorie
Advice along the lines of "Follow your passion" is dangerously misleading.

Plenty of people have what seem like solid game ideas and are passionate about
them, but don't get anywhere because making solo indie games requires a decent
level of proficiency at a ton of vastly different skills (coding, design,
growth hacking, etc). Plus, the gaming sector is extremely crowded and
competition often employs unethical tricks (psychology manipulation, etc)

It's much easier to focus on the wrong things when developing a game, because
there's so much to do, and there's always yaks to shave. And while one's
"following their passion" of coding, they might be neglecting other crucial
aspects of the project.

~~~
ineedasername
I agree with all of this, but think it applies equally to trying to start a
SaaS business. So, given little direction or ideas on a SaaS project vs. a
game idea they have some interest in, I'd still vote for the game idea.

------
nyxtom
The best way I've found to have some "passive income" is to manage my finances
better.

\- Use a savings account that is completely disconnected from your checking
account bank. Bonus if you find a high yield savings like Synchrony for
instance (2.25%)

\- Use a method for separating what you spend from what you pay monthly on
mostly predictable billing amounts (bills that end up being the same each
month). I have 2 checking accounts, one for spending and one for billing. I
use schwab banking. The main banks like WF and others all charge fees. Fees
that could be used for other things like gas or other small monthly expenses.

\- Automate everything (savings, bills, spending)

\- Apply financial minimalism where possible. Minimize unnecessary spending,
increase spending on things you actually like, set goals associated with this
and fearsetting for things that you know you probably shouldn't be spending
money on. (Perceived net quality of life should improve)

\- Take advantage of automated investment portfolio offerings (or do the
research yourself and invest).

------
derekp7
One route to success is to take some other domain that you have expertise in,
that most software devs aren't familiar with. Come up with an application that
solves a problem in that domain, then market to those people.

Here's a simple example (this probably won't make any money, but it is good
for illustrative purposes). If you look at an egg carton, there is a sell by
date on there, but it doesn't list the date that the eggs were laid. Well it
does, but not directly. There is a number on it which is the day number of the
year (1 - 365), that represents when the eggs were laid.

So come up with an app, called "fresheggs", that just converts this number to
a date, and will tell you how many days old these eggs are. Add location info
to the app, and put in ads at the bottom that are coupons for the store you
are in. You get paid when a user clicks on and uses that coupon.

~~~
newsoul2019
Here is a free business idea! I ran into a niche problem the other day.

If you have a family with X family members, and each person has a loyalty
number for Y airlines and Z hotels, that starts to become a lot to keep track
of. Wouldn't it be great to see all of your loyalty accounts on a single page?
Then you could have cool graphs, growth rates over time, etc. Also a tool to
make sure that all family members are getting credit for all of their
miles/stays.

------
AlchemistCamp
Almost no income is "passive". Like a farming plot, it has a certain momentum,
but over time it shrinks and becomes less productive if you don't continue
tending it.

Maybe you can build things that you yourself want to use but struggle to find.
At the very least they'll help you, but there's a good chance you'll build an
audience and maybe a base of customers if you build in public.

------
Jefro118
An ebook will likely be much closer to passive income than a SaaS product.
Neither are passive though - if you want to have a consistent stream of income
you will have to continue doing work. And you will certainly have to do a fair
amount of work to get it off the ground (this includes marketing and/or sales,
not just making).

For SaaS, having a product that you can put on third-party marketplace, e.g.
Shopify apps, GitHub apps, etc. might be your best shot at reducing ongoing
work since the marketplace itself will do some of the marketing for you. You
still have to do lots of work though.

Mobile or web based game will likely take a lot of work and return very
little.

Aggregating useful content and selling access to it is one relatively quick
way to go. E.g. there are bunch of people who have just aggregated contact
info of press or VCs and then sold access to it. This will take a fair bit of
work to aggregate all the info but it's still relatively quick (certainly
compared to SaaS) and probably won't require much ongoing customer support
given how simple the end product would be.

Ultimately if you are determined to find something which is "passive" you are
more likely then not going to fail. By all means think about how you can
compress the time and effort required and reduce the amount of ongoing labour
by you, but starting from "I want passive income" isn't going to work.

~~~
ghaff
I'm not sure I'd ever recommend an ebook as a good passive income method.
There are good reasons to write a book, including establishing credibility
that leads to more revenue for consulting etc. But you're probably not going
to make a lot of money from it.

~~~
Jefro118
I was referring more to relative passivity rather than income potential, but I
haven't written one myself and I'm not too sure whether it's worth pursuing at
all if your goal is money so I'll take your word for it.

------
ineedasername
Keep in mind that if there were an easy &/or universal solution to this
question, then everyone would be doing it. As such, many of the "this worked
for me" answers will probably represent some amount of survivor bias.

------
thorwasdfasdf
There are many thousands of indie developers and companies who have tried and
failed. Even the world class gaming companies have had an extremely hard time
producing games that make money, these days. Sure, there was a time when
making money in games was easy: that was before 2011. If you have a time
machine and can go back to that time, then you could make a lot of money.
Barring that, I would say it's nearly impossible.

Stick to SaaS, go into a field that's completely unsexy and solve a problem.
It's still insanely difficult, but your odds might be slightly better than
winning the lottery.

------
jawns
One way to think of passive income is investing your time up front to develop
a product for which you do not receive all of your compensation right away.

At my day job, I put in 40 hours of work and then get paid in full for those
40 hours shortly afterward.

In contrast, as an author of science-themed gift books, I invest a lot of time
up front to research and write the books and a moderate amount of time to
market them. And then the books have the potential to bring in recurring
income over some indeterminate time horizon.

In one sense, getting royalty checks every six months for a book I wrote years
ago feels passive.

On the other hand, if you have the choice between getting paid in full right
away or getting paid over the course of many years, wouldn't you rather get
paid quicker?

Ask lottery winners. Most choose the immediate lump-sum payment, even if the
30-year annuity is considerably larger.

So if you're looking for passive-income opportunities, please remember to take
into account opportunity cost. Could you be doing something that gets you paid
in full right away?

------
DVassallo
For me, the best form of passive income is income you get from an activity you
would do anyway (on your own terms) even if you didn’t have to work anymore. I
know, this does not exactly satisfy the passive definition, but it is probably
the most attainable form.

------
joeax
My 0.000002 BTC: I've tried several side projects over the years, a
productivity SaaS app, a dating site, monetizing an open source project. I
eventually gave up on those and wrote a sci-fi novel that generated a sizable
income stream for a while.

I will say that it's a crowded space and eventually your income will peter out
unless you spend big on advertising. But if you say, crank out one novel per
year, you could potentially achieve economies of scale and generate a sizable
(salary-replacing) income stream.

~~~
jammygit
I never thought I’d read a software developer recommending writing as the path
to riches.

Could you share more about getting your book published? I’ve written 1.5
novels but never tried to get anything published. What was the process like?

~~~
joeax
I self-published on Amazon. I got inspired by an author friend who had like 20
books on Amazon and quit his job to write full-time.

Steps I took:

\- research the science for my story

\- write an outline of my novel

\- read a book on how to write a compelling story, for me it was "Writing the
Breakout Novel" by Donald Maass

\- write the novel

\- edit the novel iteratively, hiring an editor if necessary (strongly
recommended for most people)

\- send out copies to friends and family for feedback

\- convert to Word doc to an epub file

\- hire a cover designer

\- publish on Amazon

\- run ads on BookBuB, Facebook, Amazon

------
joss82
As a moderately successful saas founder, I'd advise you to take a series of
increasingly better paid freelance gigs, then invest the surplus into dividend
stocks.

A successful saas is a lot of work and not passive at all.

Good luck! It's lots of fun either way :)

------
0xEFF
None of the options are passive income. Passive income are from things like
dividends, rents, and royalties. The closest item on the list is the ebook,
but even then you'd be more in the role of a publisher which is very active on
the marketing side.

------
bshoemaker
Save aggressively, invest in index funds. This is by far the most reliable,
simple, profitable strategy you can implement.

------
rpedela
Games, books, and other entertainment forms only provide passive income if
they are hits, and it is hard, if not impossible, to predict a hit. Tools are
a much better path because you don't need to guess if people will like it
since there is an obvious market. You just need to execute well and sell which
is also hard, but not as hard as coming up with a hit.

In other words, more like Stripe and less like Angry Birds.

------
deadmetheny
There's no such thing. You either do work up-front and hope it sells, or you
continually work on something to improve it and market it. Anyone telling you
otherwise is selling you something, doesn't have any experience in what
they're saying, or got extremely lucky (e.g. the bingo card guy)

------
thrower123
It's not exactly passive, but real-estate is where you want to go for a
reliable, substantial, secondary income stream. Obviously, if you are in an
insane market, it's difficult to get your foot in the door, but there are some
options. One can typically get an FHA loan for multi-family properties of four
units or less, if you are going to be occupying one of the units, which allows
you to get in the substantially lower down-payment. Renting the other units
will cover the bulk of the mortgage, and you also have a roof over your own
head, and you should have enough slack to make extra payments. PMI is kind of
a pain, but unless things do go over a cliff, within a couple of years you can
build enough equity, and valuations will go up enough that you can refinance
out of FHA.

------
jfk13
My guess (not having tried any of these three!) is that the best chance of
achieving some kind of income would be the SaaS product, assuming you really
can find a niche issue and provide (and market) a solution to it.

For an ebook on a technical topic: it may be pretty difficult to write
something so compelling that enough people will be willing to pay money for
it. You'll be competing against what people can find free with Google, on
stackexchange, etc.

And mobile or web games: there are so many of them out there, do you really
think you can stand out from the crowd? I bet the proportion that actually
make a worthwhile amount of money is pretty small.

------
thecolorblue
I would vote for the Saas product but I am bias because that is what I have
chosen for myself. Find a community first and then create something for them.
If they need an ebook, write an ebook; if they need a game, make a game.

------
lostmymind66
You won't get anyone to tell you exactly how to make money. Anyone suggesting
it probably hasn't actually done it and the ones that have don't want you
competing in their niche.

~~~
freedomben
The other category is people that have done it, succeeded, and now make
another (typically large) income from teaching others to make a passive income
(for a fee, typically large, of course).

------
b3b0p
Not sure if this counts, but I have a couple Vanguard funds, the monthly
interest and dividends is about $1000/month on average. I also don't own a
car, but do own a parking spot in downtown Minneapolis that I lease out for
$150-$175/month (it came with my condo).

Seems like it's about the closest to true passive income as you can get as I
don't do or even really think about either.

------
ryanmercer
>Best Passive Income Method?

VTSAX, reinvest the dividends.

------
gremlinsinc
Saas is the easiest fruit---assuming you can find a niche product with market
fit, or even a saturated market w/ a unique twist --as long as you get a
couple hundred users you're in MRR territory it won't be fully passive but you
can maintain or hire others to fix stuff and keep getting the MRR.

------
dang
[https://hn.algolia.com/?query=Passive%20Income%20points%3E30...](https://hn.algolia.com/?query=Passive%20Income%20points%3E30&sort=byDate&dateRange=all&type=story&storyText=false&prefix=false&page=0)

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klinskyc
SaaS. If you're learning Python, I'd imagine it'd be tough to write an in-
demand ebook, and games are more of a labor of love.

SaaS lets you leverage other skills and domain knowledge you already possess.

------
aakilfernandes
Affiliate marketing is the closest thing to truly passive incom outside
investing. That said, it's harder than it looks unless you can find a sticky
niche with little competition.

~~~
ineedasername
That requires a decent amount of content though doesn't it? Given an existing
body of content, blog posts, etc., then it might be "passive", but creating
that initial bolus may not be.

------
hsnewman
Get a job with a retirement. I did. I love the true passive income stream I
get each last day of the month.

------
bshoemaker
Save aggressively, invest in index funds, and watch your money grow passively.

------
kasperni
Rich and generous parents...

------
pastor_elm
SP 500 ETF

~~~
module0000
No: ETF decay is real and always has been. You're better off shorting an
inverse ETF than buying and holding SPX.

edit: and shorting an inverse ETF has it's own problems, mainly what happens
to your position if the market crashes - but that problem exists in any
strategy.

~~~
nickles
> ETF decay is real and always has been. You're better off shorting an inverse
> ETF than buying and holding SPX.

This is bad advice.

Entering a short position requires paying interest on the borrowed shares,
which may consume any decay you're collecting.

Short positions cap returns at 100% and have the potential for unbounded
losses. Long SPY (S&P 500 ETF) produced returns of 280% since Feb 2009. Short
SH (Inverse S&P 500 ETF) yielded 84% over the same period. In order to
generate similar returns, you'd have to increase your position size
periodically.

The long position also has the advantage of providing collateral, whereas the
short position consumes margin.

------
nprateem
SaaS

------
estebandalelr
Invest in startups as a technical advisor. This has 2 effects: you will grow
your network, and you will help the ecosystem. Those two, only my opinion,
compound better than whatever financial instruments you can think of.

~~~
blocked_again
How on earth can a person who is learning Python became the technical advisor
for a startup? Genuinely interested.

~~~
1337biz
You have to do an MBA first so you can match their business bs with tech bs...

