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Ask HN: What is your yearly passive income?
108 points by Kevin_S on Oct 16, 2017 | hide | past | web | favorite | 103 comments



The more I explore this concept of 'passive income' the more it seems like a unicorn not unlike the Facebooks and Instagrams of the world.

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.


It's very easy to get passive income. Just buy high dividend mutual funds.

100k in the market should net you 4-12k per year.


ah yeah, the good ol' 100k i have lying around should finally have some use for me!



Step 1 to become rich: already be rich! :)


You don't need 100k to open one.


Compound interest is a powerful thing, especially if you sock away at least 10% of your income into index funds with every pay check.


but if you're not reinvesting your passive will shrink over time due to inflation(I'm not sure about US but here in Brazil the dividends are subtracted from the stock valuation), so even then it requires some kind of maintenance. Capitalism is inherently competitive, if some way to generate capital is too easy it will become hard quite fast due to competition. If you can still make some money out of investing is because most people don't have the money or education to invest.


> (I'm not sure about US but here in Brazil the dividends are subtracted from the stock valuation)

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.


in Brazil it's actually subtracted, if your stock is worth a dollar and you receive a cent of dividend the stock will be priced at 99 cents. Like, it's as if the dividend money you receive is actually a part of the stock you own.


I'm also very curious about this. Did some research, and got no answers...


My 401(k) automatically reinvents my dividends.

> 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.


I have about 50k€ on European and US stock markets.

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.


Are you intentionally picking dividend-focused stocks though? That is a key aspect of it if you want dividends. Most stocks are not focused as much on dividends (presumably, people buy them for the potential increased value of the stock over time instead of potential dividend payments).


> Are you intentionally picking dividend-focused stocks though?

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


Have you look to professionally managed portfolios?


Well, I don't trust professionally managed products (I'm in France as well btw) for various reasons. Basically I think in the long run it's better to manage your portfolio yourself. I'm sure I could get a better return if I was putting more effort into it, but I'm lazy so I don't mind.

Also, at least if I don't earn much I only have myself to blame.


Along with that kind of passive income comes passive risk (i.e., risk you have zero control over).

Not saying you're wrong, but it's something to keep in mind based on your goals.


Pretty sure if I had 100k it would already be invested, not just growing mold in my mattress.


It mostly seems like one of those fairy tales people eat up because they want it to be real. Who doesn't love the idea of perpetually making money for nothing?

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.


Passive implies less-than-full-time work, not "no work". It also usually requires a ton of unpaid work invested up-front (hence why most people never try it), and after it's established it should mostly just run on autopilot. There's obviously an ongoing maintenance requirement, as any system has. Often people outsource parts like customer support to further automate things.

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


> Passive implies less-than-full-time work, not "no work".

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).


Interesting. However, I would consider some income stream as passive if it there is a net positive gain without as much effort as my main job (maybe upto 10%, ~4 hrs per week). By that measure, even the income from investments can be counted as passive and hence it is not impractical to reach a point where I am earning half as much as I make in total from passive sources. (Not that I do, just a hypothetical situation).


I have a Linux/Programming/Tech Career YouTube channel ( https://youtube.com/c/tutorialinux ) that just hit 50k subscribers (yay!), and it makes around $450/month in ad revenue.

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.


How much time do you put into the YouTube channel per week / month? I'm seeing on average three 20 minute videos produced per week - so it's at least one hour, but I'd imagine each video takes longer to edit etc?


As I've started trying to be more professional about it, the time it takes to produce content has grown quite a bit.

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.


Congrats on your channel. I will subscribe!


Aw thanks, I hope you get something useful out of it! Feel free to message me with feedback; I read all of it.


Inspired by previous "passive income" posts, I decided to ship something small [0] after quitting my job earlier this year.

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.

[0]: http://shade.cool


That's remarkably useful actually, cool project! Funny release notes too:

> # 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"

> "...Oh."

> · This version fixes a bug with the color picker when your primary display is to the right of another display.


Reminds me of an anecdote from The Pragmatic Programmer:

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.


Loosely based on a real story in which my roommate discovered the bug because his work monitor was on the other side of mine :) Glad you enjoyed though.


Do/did you do any marketing for it, or that $100/mo is just from being in the app store?


Some marketing in the form of a blog post [0] talking about the first week of sales.

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.

[0]: https://hackernoon.com/20-hours-of-work-258-in-sales-the-fir...


How much of your sales are "walk-in" from the app store versus buzz/referrals from your (not small) network?


wow that's a cool and simple idea. I work on a cocoa app so I will find that valueable for meeting accessibility standards. Do you have a windows version?


Not yet, but there does seem to be enough interest for me to sit down and build one!


7.49EUR interest payments from my Bank account (pre tax).

Does that count as passive income? At least I am not doing anything to get it.


If you are counting that, then building up a dividend portfolio is a good source of passive income. About $400 a year from a 1x,xxx portfolio.


I'm not a buyer in this market. Is there anyone else who prescribes to this? It must be a very long term play.


I think so, anything that you invest zero time to obtain.

Good catch


Making a throwaway for this.

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.


So now that you've got a throwaway, and have purged the most sensitive of data, what market are you in and what's the product? You should really interview at indiehackers or something similar as there's an entire community trying to do similar.

Finally: you need to hang out with different folks and get your perspective changed :)


Well I can't relate to your kicker at all. I'm worth 200k and my income is 300k pre-tax. I live in NYC on that salary and feel fabulously rich.


Nope. Try being worth -32k. And yes, it is often my job to hang out with wealthy people (in NYC, not SF).


I do believe that I will never feel as rich as I did when I went from negative net worth to zero. That liberating feeling was amazing, as it's all upside after that.

You'll get there, and it'll feel so good when you do.


Nice, that sounds pretty sweet. I'm 22 and worth < $1m. Mind if I ask some questions so I can get to where you are?

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?

Thank you!


So are you getting a salary of $2.5m (from a company that you do not own), or are the CEO/owner? I'm guessing this is a CEO salary in any case?


Yes, I work at a very large public tech company now (40,000+ employees). I'm a senior executive in the company but two levels below CEO.

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)
This includes stock and cash and bonus. All in.


Spare some change?


I run a side project for sending business reminders: https://www.cronote.com

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.


Your side project reminds me of patio11's appointment reminder. I visited your website and found the enterprise pricing is jarringly low, I recommend reading some of patio11 HN post / his blog, perhaps you might be able to increase price and earn 10x more a year.


I think your server is serving on port 4431, which is odd, so your link is broken unless you use https://cronote.com:4431/. You should serve on port 80 and 443.


I make around $2,000/year from a store on the Second Life marketplace [0]. I rarely log into SL anymore, except to move money out of my account, but the products I made back when I was active continue to sell. I've never done any advertising for them, so it's all based on organic search traffic and word of mouth.

[0] https://marketplace.secondlife.com (1 USD = around L$250)


I wonder what kind of people use SL nowadays.


I honestly don't know, but I should problably check.

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. :)


you should probably check... there may be fees or other things that have happened.


Ah, yes. I forgot to mention that; the "fund controllers" take 1.25% of my portfolio. The last 5 years it seems to have increased 12,6% in average, though, so I'm not that worried. If I had controlled it myself, well, you get the idea... :)



And 12.6% is a pretty good return.


...but is it better? :)


Well here are the S&P 500 results for the last few years:

  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% 
Source: https://ycharts.com/indicators/sandp_500_total_return_annual


I think that "passive income" is a misnomer, or at least, not very useful. I find it more helpful to think in hourly rates, since you're always putting in time for something.

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".


I make -200 Euros (yes, minus) per year with https://champignouf.com (a website to identify mushrooms). I think it's the case for many people that their side project make them lose money, if you consider hosting costs.


I make about $250/mo off of Space Gremlin mac app and a few mobile games that probably amount to nothing now. With kids entering the picture it's been harder to focus on passive income projects.


I love space gremlin! Great app.


thanks!


I make a few hundred per year from my e-book, which took about half a year of on and off work to finish and is now partially out of date (tip: don’t write books about front end software development).

My current side project is more ambitious and has a lot of potential but it’s probably not going to work as passive income...


I make ~$60 a month off my side project -https://oppslist.com.

Although it's been priceless in terms of the things its taught me about shipping a product, and market demand.


Looks like your cert is invalid, it doesn't work if you drop the www subdomain.

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 1: Save diligently (>30% of pre-tax salary)

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.


Not including anything from the company I co-founded: $10-$20 a month from publishing Hypersphere (a book written by the 4chan /lit/ board) which sells a few copies a month spread between Lulu and Amazon.

http://www.lulu.com/shop/anonymous/hypersphere/paperback/pro...

It was really fun self-publishing something and as an added bonus it's in the permanent collection of the MoMA Library.


I earn $6 a month on my patreon:

https://www.patreon.com/battlepenguin

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.


Just read through some of your blog posts. Sadly I'm not in a position to be a patron. I really, really like your writing. I want to write too, but most of my writings are stuck in a journal half-finished. Do you have any tips to fleshing out pieces of writing like blog posts?


It might be passive income now, but that is without counting the months of work and years of experience I had to put into it.

A near-zero-maintenance project is DNS Spy [0], which brings in roughly ~600$/month.

[0] https://dnsspy.io/


Curiously watching this discussion. I have a few ideas that I thought I should spend time building a product around releasing in the wild - a few months ago. Haven't had the kick in the back to do them yet. May be looking at someone else's $$$ will do it.


Many of the things I would be tempted to describe (and am seeing others here describe) as passive income aren't, at least in the strict sense: http://www.investopedia.com/terms/p/passiveincome.asp

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.


My S&P 500 index fund has gone up a lot this year. So good stuff there :)


How do you define passive? Is 3 hours a week passive after setup costs?

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.


After setup costs, I'd define it as "anything that brings in a number of dollars, where the number of dollars is not directly proportional to the amount of time I spend on the thing in any capacity".


My day job matches that description!


Really? If you choose to work 30 minutes a day for the next 6 months, your income won't be affected?


OK, you got me on that one.

However, if I choose to work 60 hours a week for the next 6 months, it won't be affected either.


I've made a measly $179 this year from Passive Income. It's not much but it is entirely passive. Most of it comes from Google AdSense on my blog, which I've been writing posts in for about 15 years. I mostly write stuff that I've researched and completed and that I want to remember how to do again in the future. I don't consider my time because these are simply notes I wrote for myself and would have written regardless of being paid for them.


Writing covered calls once per month


On bestmotherfucking.website I make $10-20$ per year which goes into its namecheap account. It breaks close enough to even that I have no plans to shutter the site for the next 5 years.

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.


+500/mo and growing after 5 months. Workable passive income is not a rare unicorn, but calling it "passive" is a misnomer. You have to work to get traffic, incrementally improve the product and handle bugs, etc. Perhaps we should call it what it usually is: "side" income.


I released a mobile app for checking upcoming train timetable half year ago and earned approx $300. Assuming the same sales figure on the next half, yearly will be $600.

Was inspired by a previous "passive income" posts in HN too, original goal was to cover Apple developer annual fees.


My wife got our safety net liquid assets into decent yielding savings accounts[1]. We’re also keeping some liquidity on-hand for some home renovation projects. That plus dividends on small non-401k holdings and we’ll pocket about $2k this year in a truly passive fashion.

[1]: lmcu.org


$5k/year from digital product ecommerce site (3500 products). i made it in 2012 and it just hums along as ppl buy & download. occasional emails - mostly requests. I need to expand this site to help with kid's college expenses a bit. might as well.


Rental property, single family home. About $4800 a year in principle paid down. I'm thinking of putting some cash toward paying off the mortgage, and pocketing all the rent (minus insurance and tax). Just haven't pulled the trigger on that yet.


2 bedroom condo rented out on AirBNB. Don't have a full year's worth of income yet, but I expect around 12k in profit plus 12k in principal paid down plus any rise in market value.


I am earning 10 cents pert month with pythonconverter.com


Do solar panel and home growing food counts ?


Zero.

I put every penny of it to good use.


It's not exactly "passive", but I make about $16k renting the bottom floor of the duplex I own. It's not without headaches of having to deal with tenants and maintenance and whatnot, but since I live there anyway in the upstairs, it's primarily things I would have to do in any case. And I can write off a lot of interest and tools and materials on my taxes. It pays the mortgage, if not the taxes, and should be a nice little income property down the road when I buy a real house.

I also make about $100 a year on Amazon affiliate links on my blog.


negative a few grand. I supplement my mother's retirement income a bit, and give a regular-but-small amount to charity.

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!


I run a small website that loses me a few hundred dollars per month. Not taking it down out of nostalgia & for the people who are still using it.


That's a lot of dough! How many people still use it?


This is the project that interested me the most. Would you mind sharing what it is? I figure there must be some serious nostalgia built in there if you're willing to shell out that much for it.


£0


I make $3000 a month committing cybercrime


You need to be spanked.




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