Any side projects, Games, OSS.
You can categorise the shapes of these curves. In a really dysfunctional company, the amount of labour your need per unit will increase as volume increases. A good example of this might be some bus companies where the cost per rider increases as the number of riders increase -- you get popular and you go out of business.
Consulting companies tend to have a linear relationship. The more you sell, the more you have to do. However, the per unit cost doesn't really change based on volume. Manufacturing companies tend to have a less than linear relationship. The per unit cost decreases with volume. You get the "efficiency of scale".
With computers we can create services with a very nearly constant relationship between volume and labour. In other words, I do the work once and then there is no other cost to increase sales. Of course, from a business perspective, this is ideal. You do the work and then you can scale the business without having to invest more money.
The thing I dislike about the term "passive income" is that it implies that you are getting free money. It's not true. For this kind of constant cost business, you've front loaded the costs. The first one costs as much as the first million. In fact, you may be in the red for a very long time (or forever... "Any side projects, Games, OSS" ;-) ). For this reason, I'd much prefer (the infinitely less catchy) term "front loaded business". I guess it will never catch on, but I wish we could discuss this topic without having to always derail into get rich quick and "living the dream of money without work" schemes.
Property management is a great example. I can buy a cheap house in a lousy neighborhood, make a modest capital investment, sign up with Section 8 and get pre-screened tenants with guaranteed cash flow. My marginal work output is very low - a few hours a month.
I used to lease a few acres of land to a farmer. The only work was meeting to have a cup of coffee and exchange the check and paying the taxes. :)
He probably turns over something like $20M, and can use the portfolio to write off profits from other businesses.
Someone who bought their home before a price boom can often turn a profit because the rents follow the price to purchase (roughly speaking).
So if you acquired a bunch of properties in 2008 after there was a crisis, its likely that they're very profitable (month to month) now
There are some lines of business that really is very passive, but those either don't have much of a moat or competitive advantage and can easily be squashed by something newer, nicer and better.
Another way of stating it is you get paid for bringing value to the marketplace. Creating and delivering value is usually very expensive. There are ways to shift around the creation and distribution of value and there are certain notable edge cases that would allow people to nitpick my definition.
But by and large there is a certain physics to business and you can conceptualize it as having certain conservation laws.
Now if you're looking for the Quantum physics of business where those laws don't seem to hold and seemingly magical shit starts to happen and you discover the superfluid of value creation... Well let me clue you in a little. It's absolutely possible.
The conservation laws still hold as what you're trading off to find this magical superfluid or superconductor of business is a very high search cost to find a viable configuration in which to run your operation. So the search cost to find a new, undiscovered, viable configuration or to find a known viable configuration or to obtain the resources to operationalize a viable configuration that has become known to you is so astronomically high in the worst case that it turns out not to be worth it.
Passive income is very expensive from that stand point.
Yes we get it. Stop fussing about the terminology.
All of the order processing and fulfillment is handled automatically.
I do no marketing or advertisement beyond social media.
It's pretty nice. Sometimes I sell meme shirts that generate $3k in a month if I'm feeling particularly clever.
I was able to bootstrap this business for like $12 for a domain name and a free trial of Shopify which gave me enough runway to scale.
Been doing this for over a year, I still basically do nothing.
“This is the most expensive t-shirt on the Internet.”
Make your own graphic designs on your computer
Look for nice organic and/or fair produced Shirts (a small quantity should be enough to start with, dont you think?)
Than buy yourself a diy Kit für Printing Shirts
here is a link to amazon germany (sorry...): https://www.amazon.de/Siebdruck-Set-DIN-A4-selber/dp/B00OV0T...
where you can Print your own Shirts. Just make yourself familiar with screen printing and do it yourself. I think thats cool. :-)
- Recharged - $2720 / month. I write a briefing once a morning about the technology industry, about 350 people pay to receive it + sponsor something without advertising or nonsense tech stories. Still growing! https://char.gd/recharged
- Write Together (new project, but hey) - $1,200 / month. I built a platform for learning to Write with others, based around building habits/streaks. https://writetogether.space
Now the thing is, both of these require maintenance, but not like a full-time job: I push code, write on them, etc. But they're not fully passive, so it's quite a specific difference -- still wouldn't trade working on them for anything, however.
Since, he's posted some good stuff on various Windows and Android gear. He seems fairly straight-up and calm with his opinions, which I appreciate.
I have about $200k spread thoughout some index funds and individual stocks that all pay dividends in my post tax accounts. I reinvest all that income and the taxes are kind of annoying to deal with, but’s it’s better than nothing.
I also have a high yield savings account. A big chunk of my total cash is tied up here because I’d rather stay liquid. I think the rate is now 2% annual or just north of. It gets me $300 a month. I just save it and let it grow, aside from taxes on the interest.
I don’t know, maybe that kind of “passive income” is no longer cool or desirable.
Every form of passive income requires periodic blips of input, but the magnitude and frequency of those blips could vary a lot depending on the business. There’s some forms of passive income that are really like part-time jobs or require a full-time job worth of effort to launch something. These don’t seem very passive to me.
I see people preach on the internet how they found some golden opportunity that lead to raking in thousands of dollars on a monthly basis with minimal oversight. I’m sure instances of this exist, but frankly I think there’s a lot that is still unsaid about what was required to pull it off. There’s a group of people that are instead looking for the snake oil fountain that allows someone to live like their retired in their 30s but without doing any work. This is no longer “passive income”, and is instead just another “what’s the easiest way to become rich” search. The reality is that identifying and executing a high-ROI opportunity that recurring brings in money with low input is not as easy as following an A->B->C guide or else every market entrant would have like a 90% success rate and everyone would already be doing it.
If people genuinely want passive income, then financial investments or monetizing hobbies (to the extent it’s still enjoyable) seem like a good place to start for providing a good lifestyle/income balance.
Likewise, many projects that require some initial effort upfront may eventually produce income with little to no continuing involvement. Passive income.
I made about $13k off it, which sounds good but was really only about $20/hour.
Hoping to grow it quite a bit this year and then start offloading tasks. I don’t know if I can ever get it truly passive, but that’s the dream.
Most of the competitors are SAAS and geared at agencies. I’m basically the low end of the market, but YouTubers just starting out don’t need multiple videos for $30/month.
It's virtually impossible for one to prevent competition
If your business idea is so fragile that can be blown away by competition, you might want to rethink your strategy.
It may not be that you "want to rethink your strategy," but if you stumbled into becoming a one man show for a super niche unrivaled business app, why talk about that on a forum of developers?
I rent them both out I pay a management company to handle maintenance. I screen tenants myself, and so far I've been lucky getting tenants who stay for fairly long periods. I clear about 5K/month after maintenance fees, taxes and insurance. Its very little work.
So to summarize, by far most of my time was spent writing the blog posts and watching my non-existent analytics. Nothing I actively did to market the site (and I did very little) worked. It was a project that didn't intend to make money, that ended up making money.
Originally started as a T-shirt company specializing in dog puns but expanded a couple years in. The T-shirts are all printed and fulfilled by a US company and I have the pet supply inventory at my house so it’s quick to ship. Not entirely passive but only takes about 5-10 hours each week.
Been gaining momentum recently so it’s been an increasingly better income source.
Other than that, a few games I've published generate ~$100 a year without input from me. Everything else requires at least a little bit of my time on a regular basis and I wouldn't count it as passive.
Disclaimer: it's a side-project, but not passive. Writing high-quality analyses is extremely time consuming (30-500 hours each) for ourselves, and our analysts - but it pays off in compound terms. I personally worked only on weekends for 4 months on this.
Before that, I was at MIT, UBS bank and McKinsey. Currently, I'm also looking for additional CTO co-founder opportunities globally (I'm co-located in SF and Switzerland) - please reach out to email@example.com if you want to launch an own online product or course in a matter of days, and reiterate at an insane speed (only if you have a solid pitch or massive online followership, OR: if you know sb. who has such, there's a HUGE finder's fee of several 10k USD).