Sure, it's possible to generate truly passive income, without any ongoing work to sustain it, but such projects are so rare that it's impractical to pursue them. It's like saying you're going to create the next unicorn...good luck with that.
99.9% of endeavors worth doing pursuing require some level of constant work to continue capturing the value they generate.
I say this as someone who made his first few 'passive' dollars LAST NIGHT WHILE I WAS SLEEPING. But I put 'passive' in quotes because this was after 5 months of working for nothing, and the grueling work required to keep my offering attractive continues.
100k in the market should net you 4-12k per year.
What is that about?? Usually the market prices the dividend removal, but that only lasts so long. At any point during the year the market prices it back, in anticipation of the next dividend.
> if some way to generate capital is too easy it will become hard quite fast due to competition.
For the general population, saving money to invest is not easy.
Amazingly enough, that only payed me 1128€ (after tax [I just checked my income tax form]) in dividends last year. I guess I suck at picking high-return stocks.
I used to when I started, but I don't anymore. Now I just buy stocks of companies I like. Lately for instance, I bought some NVDIA shares because I like what they do. Also last year I realized I didn't own any AMZN share and I thought that was not right, without even considering the fact that they don't pay any dividend at all. Same for Netflix or Cray or Tesla.
In truth, my mindset is more of a collector than an investor :P
Also, at least if I don't earn much I only have myself to blame.
Not saying you're wrong, but it's something to keep in mind based on your goals.
Like people who follow the stories of all the lotto winners. One day that's gonna be me!
Back in reality, I rent a property into which I sunk a month of labor and lots of money for renovation. There's also ongoing repairs, which I mostly do myself. But sure, it's "passive" most of the time.
Ideally the product is something you enjoy working on though, so the end result would be that
1. you have an income
2. you enjoy the work that you do have to do
3. you have a lot more spare time
Pretty sure passive really means "no work". Granted, it's a theoretical concept that in practice can only be approached, but "less-than-full-time" does not sound like a fair approximation. Some passive income can require less than an hour a month of "work" (basically doing some paperwork for your broker, filling your tax form or stuff like that).
I also made a poorly targeted and marketed practical system administration Udemy course last year, which does about $500/month.
These projects, along with a few other small things, are on track to make around $15k this year. That's after about 3 years of putting lots of time, effort, and love into creating content on YouTube.
Unfortunately that 'passive' income just barely approaches 10% of what I make at my full-time job (Sysadmin/Ops/Automation/DevOps? stuff), so the idea of working on my 'passive/hobby' projects full-time is not an attractive proposition yet.
I like building, running, and automating large distributed systems, so I'm not really itching to quit my full-time work and "just" be a teacher. The ideal situation would be 'regular' IT work 3 days a week, and working on YouTube, my own web apps, and additional tech courses the rest of the time.
20 minutes of me talking into the camera takes 2-4 hours to plan, outline, film, and edit.
30 minutes of screencast takes about 8 hours to script and film, and edit. The planning/research phase before that takes really long, because I try REALLY hard to avoid dependencies on jargon and specialized knowledge, to make the material accessible.
I'm actually about to experiment with a series targeted at more experienced sysadmins, where I can just improvise and work on a practical project without much planning or gradual explanation of the fundamentals. I'm hoping those videos will be much faster to create.
I spend a LOT of time thinking up and planning material, though -- not really sure how to count that.
It only makes me ~$100/mo, which is enough to cover my PC gaming addiction. Super fun experience, amazing how much you learn from building such a small piece of software.
> # What's New in Version 1.0.3
> "Hey Jordan, this app looks great but unfortunately crashes when I mouse over to my second monitor while selecting a color"
> "That's impossible, I fixed that! Are you sure you're using the latest version?"
> "Yes I'm positive. Just put your primary display on the right and mouse over to the left screen"
> "Hmm... works on my machine."
> "Your other right"
> · This version fixes a bug with the color picker when your primary display is to the right of another display.
Andy once worked on a large graphics application. Nearing release, the testers reported that the application crashed
every time they painted a stroke with a particular brush. The programmer responsible argued that there was nothing
wrong with it; he had tried painting with it, and it worked just fine. This dialog went back and forth for several days,
with tempers rapidly rising.
Finally, we got them together in the same room. The tester selected the brush tool and painted a stroke from the
upper right corner to the lower left corner. The application exploded. "Oh," said the programmer, in a small voice,
who then sheepishly admitted that he had made test strokes only from the lower left to the upper right, which did not
expose the bug.
Other than that just word of mouth from social media. I've also linked to it from my other Medium articles which get a couple thousand reads per week, but haven't converted many of those to sales.
Does that count as passive income? At least I am not doing anything to get it.
My annual pre-tax income from work is about $2,500,000.
My annual passive pre-tax income is about $1,200,000. This is 100% derived from investment returns from an exit I had a few years ago from a startup I was with.
I spend about $400,000/year (after tax) of that.
Here's the kicker: Nothing makes you feel more poor than being worth about $40m in cash while you hang out with billionaires and live in NYC or SF.
Finally: you need to hang out with different folks and get your perspective changed :)
You'll get there, and it'll feel so good when you do.
What was your role in the company? How long were you with the company for and how long after its founding did you join? Was the company ever funded or 100% bootstrapped?
After you had your exit, how did you begin investing your money and why did you decide on that mode of investment?
Do you currently work a corporate job or do you work for yourself?
Any other tips or advice?
I would guess:
4000 people make > $500,000 / year
1000 people make > $1,000,000 / year
250 people make > $2,000,000 / year
50 people make > $4,000,000 / year
~7 people make > $8,000,000 / year (the executive team)
Cronote made next to no money for 5 years, but slowly migrated its way to the top of Google for search of "text message reminders" and "sms reminders." I did a ton of work, made an iPhone app, changed the billing system four times and rebuilt the interface three times.
I now have ~60 paying customers, but it only makes $300 per month after all expenses. I don't think I've recouped the man-hours spent, but I've certainly learned a lot along the way. I learned Python/Django (website back-end), Objective-C and Swift (iOS app), and lots of fun stuff about timezones and calendaring APIs.
 https://marketplace.secondlife.com (1 USD = around L$250)
I sold a _very_ small IT company in 1998 for $50K when I got a "real job"; the truth is, I didn't earn much on my own company, and it was doomed to fail anyway. I was only 22 years old, and my financially over-protective dad (thanks, though, and RIP) insisted on putting all the money into pretty secure stock funds.
I've never needed the money, and after my dad passed away in 2012, my brother's lawyer and accounting company keeps it under control. Based on a fairly conservative avg. interest of 7% since then, I should be good for $190K now, increasing approx. $1K+/month at the moment. If my rather poor math skills serve me right.
The reason I don't bother about this investment is that I'm currently OK with the "normal pay", but it's also because I'm afraid of being disappointed if I look into it, or (worse) get so excited I spend it all on crap. :/ Also, if I never bother about those money, I guess I'll never miss them when the stock market _really_ crashes. :)
As of today for 2017: 14.24%
Dec. 31, 2016 11.96%
Dec. 31, 2015 1.38%
Dec. 31, 2014 13.69%
Dec. 31, 2013 32.39%
Dec. 31, 2012 16.00%
If you spend 100 hours setting up a website, and over the next 5 years you never touch it and you make some money, some would consider that "passive". But really, you put in 100 hours, and made $x from it.
I think people are really looking for high ratio of money to time spent, not something that is truly "passive".
My current side project is more ambitious and has a lot of potential but it’s probably not going to work as passive income...
Although it's been priceless in terms of the things its taught me about shipping a product, and market demand.
Edit: I checked out https://www.oppslist.com which works, and had to come back and say that's a nifty site, well done!
Step 2: Invest in very conservative investments that throw off free cash (I personally like fixed income like US treasuries and municipal bonds). The operative word is "conservative" so that the passive income is reliable and can be treated as a permanent offset to lifestyle costs.
Step 3: ...
Step 4: $$$ -- As the income in Step #2 grows, it increases the savings ratio in Step #1 (a geometric series!).
This is a doable formula anywhere (I currently am working and raising a family in Silicon Valley) and I've achieved financial independence in about ~10 years. I still keep working to stay engaged.
It was really fun self-publishing something and as an added bonus it's in the permanent collection of the MoMA Library.
I was driving around the US for five months and writing, but now I'll have to put that on pause as I just moved in with a friend and need to find a real job again.
A near-zero-maintenance project is DNS Spy , which brings in roughly ~600$/month.
In the colloquial sense, I made about 18k last year off of money I dumped into Betterment a while before. I don't do anything but periodically check on how much money I've made. I wish I'd started passively investing about a decade earlier. If you have anything beyond an emergency buffer just sitting in your checking account, just do it.
Would organic traffic after doing SEO for 2-3 weeks be passive? Theres a lot of things which take 1 hour/week after being setup right.
However, if I choose to work 60 hours a week for the next 6 months, it won't be affected either.
On my blog I have affiliate links to Amazon products which I explain how to use. I've made $428 over the past year. Those regularly net 30$ per month on average. It covers the web hosting and leaves enough to help me buy random Amazon stuff.
Was inspired by a previous "passive income" posts in HN too, original goal was to cover Apple developer annual fees.
I put every penny of it to good use.
I also make about $100 a year on Amazon affiliate links on my blog.
It's pretty easy to set up - just contact your bank and get an automatic monthly transfer going. I did it online, and haven't had to worry since!