8 ms·

The "Passive Income" trap ate a generation of entrepreneurs

406 points by devonnull 5mo ago

yoyohello13 5mo ago
[flagged]
- coredog64 5mo ago
  "Rent seeking" has a specific definition* and it is not "I use large capital investments to generate regular payments". Buying housing with the intent of renting it is not rent seeking. This is Wikipedia, which is as good as most other definitions: Rent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth
  - valiant55 5mo ago
    In what way does buying a property and renting it create wealth? Isn't buying a property with the intent to rent it manipulation of economic conditions?
    - pc86 5mo ago
      If you think buying a house and renting it out "manipulates economic conditions" you need to prove it because that's a claim, especially with regard to "manipulate."
      - lotsofpulp 5mo ago
        The manipulation is in the political limit of housing supply and the limit on land value tax rates.
        jeffbee 5mo ago
        The homevoter hypothesis is mostly nonsense. There isn't a coordinated, conscious effort to restrict the supply of homes based on rational expectations of excess returns. People restrict the supply of homes due to misguided aesthetic reflexes, racism, nostalgia, and a bunch of other stuff, not because they are mustache-twirling capitalists.
        pc86 5mo ago
        Maybe it is (I'm not so sure but I'm open to the argument), but even if true, it's a completely separate thing from someone buying a home and renting it out.
    - db48x 5mo ago
      Yes. The land is wealth, the house is wealth, and _living in_ the house is wealth. Like it or not, not everyone can afford to buy a house. Maybe they don’t have a down payment, or can’t get a good interest rate on a mortgage. Instead of renting money and using it to buy the house, they need to just rent the house instead. If there were no rentals available of any kind, they would go homeless¹. Having them renting something instead of going homeless makes wealth for both them and for society as a whole. ¹ We’ll just assume that homesteading is impossible these days.
  - deleted 5mo ago
    [deleted]
  - butterlettuce 5mo ago
    [flagged]
    - jeffbee 5mo ago
      Why? There are loads of people who can afford to rent a house but can't afford to rent a million dollars. I genuinely cannot understand where this hatred of people who rent out houses comes from.
    - OrderlyTiamat 5mo ago
      Not necessarily. I rent my house, and the housing corporation who I rent from are not rent seekers, they provide a service to me which I'm happy with, and which they invest in. They could've bought up the land and house and not improved it at all and depend on the housing crisis deepening for increased resell profit- but they did not do so, they maintained this house I'm in and ensured me and future tenants can continue enjoying this place. That's not rent seeking.
    - pdonis 5mo ago
      People who can't afford to buy a house need a place to live too. Believe it or not, there are people who buy houses with the intent of renting them out to those people, to actually help them.
    - em-bee 5mo ago
      i could not afford the capital investment to buy a house, and i am not interested, it would only lock me down. my family once bought an apartment. we lived there for a few years. the mortgage payments were twice as high as the rent would have been. when we moved out we were told the place could not be sold. the family still has the place and it is probably still empty. lots of money wasted. when you buy a house with the intent to sell it for a profit, then you are driving up housing costs. i'd say that's even worse than renting it out.
    - didgetmaster 5mo ago
      Let me guess..you have an equal disdain for people who own hotels, rental cars, or work as an UBER driver. All these things involve renting out something to fill a temporary need.
  - michaelchisari 5mo ago
    There is rent-seeking, rent extraction and the rentier class. All are a part of the process of enclosure. Landlords are included in this but it may not seem that way because enclosure happened so long ago.
- lotsofpulp 5mo ago
  I don’t think it’s even spin, it’s just the jargon the IRS uses. And wanting to make money while you sleep has been a thing long before 2015.
  - deleted 5mo ago
    [deleted]
- beloch 5mo ago
  Rent seeking is for those who already have capital and can use it to influence those with political power. "Passive income" is for those who don't own capital. One works. The other... often not.
jazz9k 5mo ago
Passive income are just get rich quick schemes that were common decaded ago. I started a business like this, but it wasn't passive. I shipped everything to my office before inspecting and shipping product out. It lasted almost 10 years with 1 million annual revenue. It was not passive.
- Ifkaluva 5mo ago
  Sounds like you were running an import and distribution business. Not the same thing as drop shipping :) as the drop shipping people will joyfully tell you, “you’re not supposed to touch the product”
  - QuercusMax 5mo ago
    the inspection part is a big deal. drop shippers don't add any value, but inspecting the goods (and rejecting those that don't meet spec) actually adds value.
  - mrdependable 5mo ago
    Dropshipping is just logistics. There is a lot of dropshipping that has nothing to do with ordering off Alibaba.
faanghacker 5mo ago
This article has a narrow definition of passive income, limiting it to these low-barrier-to-entry schemes. Other parts of the FIRE world have emphasized being a landlord or flipping houses, for example. I personally made it happen by working a FAANG SWE job for 13 years, not getting sidetracked by the startup cult, saving and investing 70% of my after tax income, etc. And no I didn't get into crypto, but I still managed to make it with conventional investments. In fact, I chose to pursue a career in the tech industry in order to pursue financial independence in the first place. Because I knew back then (circa 2005) all the tech Kool aid was BS. That "don't be evil" was just a facade. And time has proven me right and my haters wrong, those who thought it was unethical for me to place wealth building ahead of career building. It's been four years since I've been out of a job. Now I'm creating more passion oriented content. I'm never bored.
- paulpauper 5mo ago
  This is the way. There is huge survivorship bias when it comes to start-ups, even AI start-ups. When it comes to wealth creation, it's hard to beat a 20-30% CAGR with big tech stocks since 2010 or so, which was doable.
- HeyLaughingBoy 5mo ago
  > thought it was unethical for me to place wealth building ahead of career building Twelve year olds?
  - faanghacker 5mo ago
    High achieving college students.
- zem 5mo ago
  > those who thought it was unethical for me to place wealth building ahead of career building. that might well be the first time I've seen "career" and "ethical" conflated in that way. I've definitely seen the people who think you're a fool and possibly a sucker if you chase short term wealth over career stability, and there's definitely a veneer of unethicalness clinging to the notion of get-rich-quick, but I cannot understand how "establish yourself in a career" is an ethical concern.
georgemcbay 5mo ago
"Passive Income trap" wantrepreneurs haven't really gone away, they have just shifted to crypto rug pull culture and now prediction markets and app-based gambling. They'll keep existing as long as the root cause that creates them (massive wealth inequality in general and the growing delta between productivity and wages) exists, so probably until our financial systems fully collapse in about 2032.
- ryandrake 5mo ago
  These people migrate like geese through the exact same stuff. I knew a couple of people way early on into affiliate marketing, then they all migrated to LeadGen, then to Drop Shipping, then online poker, then crypto, then NFTs, and now of course, they're all doing AI gigs. It's the exact same group of people migrating like birds from scheme to scheme.
  - conorcleary 5mo ago
    I think this is what the 'forest for the trees' phrase is getting at...
  - pingou 5mo ago
    What does it mean to be doing AI gigs? Because AI seems really different than drop shipping, online poker, crypto, and NFTs.
secretsatan 5mo ago
Met a guy that ran some dropshipping thing in a bar once, once he found out i was a programmer he kept on trying to get me to fix his website for free because it was easy, would not take no for an answer. I just kept upping how much money i would charge him till i got sick of it and left. I knew a few guys like that in crypto too, before crypto came along and they got into that, this guy told me he’d written a twitter app, it was a bot that pumped gold at some influencers command. Spurred me to write an app though.
- nobleach 5mo ago
  "My nephew makes websites, and he's 14... I could just have him do it" - Every client of mine during my contracting days. It took me way too long to reply with, "Oh that's great news! I wasn't sure of my availability, and was certain I was going to be way too expensive. Glad you got it figured out."
  - dpb001 5mo ago
    I think the 14 year old nephew has been around for every iteration of technology - there are probably clients now threatening to just have their nephew vibe code the thing you're trying to spec out. Once, when fed up with this during a discussion on a small moonlighting job I said "Yeah, kids are pretty good with this stuff these days, Tell you what - have him get started and I'll be available to give him any help he needs at 2x my rate".
  - tombert 5mo ago
    Someone told me that in 2013 when I was trying to do contract work. I gave him a quote that I thought was reasonable, and he thought it was too much and he told me that his thirteen year old son could do it for free. I responded that he was the one who had reached out to me, and if he feels like his son can do it then he shouldn't have wasted his time trying to find a contractor since that will be more expensive. The client didn't like the attitude and I didn't get the job, but I was kind of glad because it was pretty clear to me that he would have tried to weasel out of paying me regardless.
cucumber3732842 5mo ago
Everything I'd want to do on a "side gig to iron out the kinks and then eventual business" basis is regulated to the point where that path is economically impossible and the only way to be in the black is to take out a big f-ing loan, quit your job and go all in on your new business. And it's not just me, all my buddies have this gripe. We've all got skills and experience and equipment outside our immediate careers and we'd like to use those to provide value to people but there's just no way to do that inside the rules and none of us our interested in risking our retirements operating outside them. I just upped my retirement contribution and decided that the big evil BigCos can do all the value creating and the finance middle men can have their take. I guess that's the reason everyone does the slumlord or VRBO thing.
- mothballed 5mo ago
  Where I live out in the country there are a lot of people with those kind of businesses. They bring you the goods and services to/from in a truck. If you ask to look at what they have... they have no address and won't tell you anything more than their goods/services dropped from the sky. At that point, I don't try to probe further... if I am happy I would rather not know.
  - cucumber3732842 5mo ago
    >Where I live out in the country there are a lot of people with those kind of businesses. They bring you the goods and services to/from in a truck. If you ask to look at what they have... they have no address and won't tell you anything more than their goods/services dropped from the sky. Yeah there's a fair amount of that here too. Thinking about it on a meta level I think on the "low end" it's basically just a hack around how expensive employees are when you consider exposure. Sure you could have your $15/hr guys stay late and power wash your box trucks, deep clean your facility, etc, but some guy with a van will come in and do it on the weekend for a flat fee and if he falls off the ladder that's not your problem. And on the high end it's a hack around overhead. You can have some guy show up on a jobsite, set up a tent to keep predatory eyes off and weld up the broken thing on your backhoe or the rental company calls that guy and repairs it on your job site without telling you giving you deniability. No expensive compliance costs of adding hot work to your job site or running a shop where that stuff happens regularly. >if I am happy I would rather not know. Always better to be able to say you don't know rather than "I asked and the answer seemed fishy but I didn't probe".
hannahstrawbrry 5mo ago
"It was an ouroboros that had incorporated in Delaware and was running Facebook ads," is my favorite line I've seen in a minute, great read
- zem 5mo ago
  my favourite bit was 8<------------ Free to do what? Sit on a beach, apparently. Every single one of these people wanted to sit on a beach. I've never understood this. Have they been to a beach? There's sand. It gets everywhere. You can sit there for maybe three hours before you want to do literally anything else. 8<------------ I laughed out loud when I read it, because it's so true.
  - ghaff 5mo ago
    I “retired” about a year ago. Back to actively doing some tech industry analyst stuff with some folks I know. Keeps me as busy as I care to be.
    - teamonkey 5mo ago
      I would dearly love to be as busy as I care to be.
      - HeyLaughingBoy 5mo ago
        Right? That's my ultimate goal.
  - michaelchisari 5mo ago
    Nature is wonderful because it will relax and center oneself while making it clear why we created civilization.
  - paulddraper 5mo ago
    I love the beach. Living near the beach is nice. You can sit on it, walk on it, swim on it, surf on it, run on it, fish on it. Better than a cement sidewalk, IMO.
qurren 5mo ago
> Free to do what? Sit on a beach, apparently. Quite the opposite for me. I'd like to have freedom to work on things I want to work on without "paying rent", "paying medical bills", or "short term profitability" being a constraint.
- entropicdrifter 5mo ago
  Yeah, I'm a musician and a certified audio engineer. I'd rather be writing and recording music than working for healthcare/mortgage costs
- TremendousJudge 5mo ago
  yeah, but the guys selling the courses were/are all obsessed with being at the beach
  - bluefirebrand 5mo ago
    I'm pretty sure that being at the beach is really just universal marketing shorthand for "being somewhere that no one would ever expect you to even reply to emails from"
    - bawolff 5mo ago
      Or more generally, just doing whatever you want. I dont think anyone literally wanted to sit on a beach 24/7 365 days a year. However plenty of people would want the ability to just wake up one day and on a whim fly to a hawaii until they get bored then fly somewhere else.
    - aianus 5mo ago
      Working from the beach is much more enjoyable than working from a cubicle in Toronto in January all work tasks being equal. Much cheaper too, ridiculously enough.
      - jpetso 5mo ago
        If you pay for beach accommodation instead of a dwelling in some higher-priced metropolitan area, sure. As an add-on though, still more expensive. I'd wager that most people are working towards a home base in the lands they're used to, then go on trips every now and then. Selling your metropolitan home base gets you the permanent beach lifestyle for sure, but permanently removing oneself from more densely populated areas is not for everyone.
quercusa 5mo ago
Got trapped in an Amway pitch in my teens and have been inoculated against such things ever since.
- pc86 5mo ago
  I wish Amway was bigger so more people would be exposed to it and be similarly inoculated.
  - slyall 5mo ago
    Well it was bigger. But the people who used to get swept by MLMs are now selling drop-shipping, affiliate websites or blockchain.
  - bluGill 5mo ago
    At least amway has real product. You are expected to sell to make money in the early years. In 30 years of real work you get a passive income retirement plan - but you need to put in real work selling things to get there. when you look at the real business model of those who have had success they are still selling the soap in retirement. It is not going to get you rich, but it isn't too bad a life. well it was - the only people I know in amway are in their 80s and so it may be different. amway deserves the hate. Truth is it isn't as easy as they tell you.
- m463 5mo ago
  You are reminding me about a day decades ago when a guy I met and his wife were sitting in my living room with my gf and I. He wanted to talk science fiction, and his wife and my gf were going to talk about nursing. Seemed like a nice couple until they started talking about "something they were doing" in a mysterious way... I remember saying, "sounds like scamway or something" and he actually had to say that it was in fact amway he was talking about. uncomfortable. didn't go much further than that. Looking backwards I realized how little friction we had getting to know these people, etc... sigh.
- jimbokun 5mo ago
  When the Internet was a quite new a guy who knew I was a programmer met with me to pitch an Internet business and it took me a while to figure out he was literally pitching Amway online.
homeonthemtn 5mo ago
>But zoom out and what you had was just an enormous machine converting human ambition into noise. Ah, the story of a generation
- entropicdrifter 5mo ago
  Just one?
  - toyg 5mo ago
    Indeed. In the case of music-obsessed boomers, that saying rings true in a very literal way.
paulpauper 5mo ago
Isn't passive income a cornerstone of of the Rich Dad Poor Dad Books? This long predates 2020. I would say selling masks and only being $800 in the hole is a lot better than starting a "regular business" and down $80k-800k.
- ryandrake 5mo ago
  Yes, it was the exact same scheme. Rich Dad Poor Dad was basically "Buy lots of cheap, crappy houses and become a slum lord" expanded into thousands of pages of books, seminars, and self help guides.
  - datadrivenangel 5mo ago
    and Kiyosaki has declared bankruptcy at least once!
    - qzw 5mo ago
      There really should be a special category for business books written by people who’ve gone bankrupt. I know at least two well known examples, but there’s got to be a whole lot more.
      - jimbokun 5mo ago
        Dave Ramsey went bankrupt but to be fair he incorporates it into his teaching. “Hear are the things that led me to bankruptcy, and here are the things I did to climb out of it and become financially stable again.”
- wj 5mo ago
  You’re right. Books like the Four Hour Workweek and Escape From Cubicle Nation were guides to passive income twenty years ago.
  - ghaff 5mo ago
    It’s not totally risk-free income (but what is) but a decent pile invested sensibly makes for pretty good passive income depending on your goals.
add-sub-mul-div 5mo ago
It's like the flood of AI shovelware projects being spammed here daily. Were these the people who were really going to do anything substantive anyway? Or just the shortcut-taking types?
zem 5mo ago
this is unquestionably the best thing I've read on hackernews this week, perhaps all this month. should be required reading in high school, for the mental lens it provides.
bitwize 5mo ago
"Passive income" as your only financial salvation is one of those memes that broke off from the MLM "tool scam" industry, that is, selling courses, seminars, and other training materials to people in MLMs on the pretext of teaching them sales, marketing, and business, but it's really just brainwash material designed to keep them from leaving. The other big one is positive thinking/the law of attraction/"The Secret". If MLM is the kaiju, these are the spider-things that fell off the Cloverfield Monster's body and started killing people in the subway tunnels. But like how Robert Smith performed with Siouxsie Sioux as "The Glove" while still fronting The Cure, these memes have built plenty of side scams while still enjoying friendly partnership with MLM itself.
deleted 5mo ago
[deleted]
vonnik 5mo ago
“You can’t cheat an honest man.” While that isn’t always true, honesty is a great defense against being enlisted in scams that promise easy money.
- subscribed 5mo ago
  And probably a greatest vulnerability in scams (like "oopsies! We mistakenly refunded you 20000 instead of 2000. Can you send us these 18000 back?")
recursivecaveat 5mo ago
I appreciated when "passive income" was the flavor of the week because it was a good signpost for people you could ignore. In particular anybody who didn't understand that you could assign a present value to future income, or that infinite series can sum to finite values. Seriously, the prototypical example of being an author is not particularly passive income lol! A book being print-on-demand indefinitely != infinite income. 99% of copies will almost certainly be sold within a few years, not least due to active marketing on your part. It's very likely to be a worse deal than getting paid a quite modest and disappointing sounding amount up front.
- ghaff 5mo ago
  And that 4 figure advance from a publisher won’t go far either even if you earn it out and get a few royalties.
- bluGill 5mo ago
  often the real value of writing a book is you can convince people to pay you to speak. I've had several classes at work where they gave me a book that had everything in the class.
- sfRattan 5mo ago
  The way it shakes out is that there's no widely accessible way of escaping actual, ongoing work, which is what unmotivated people actually hear behind the words "passive income." Whatever the industry/vertical/field, a tiny number will hit it so big that they can actually stop working. Everyone else can bolster their income with passive sources, but that passive income ultimately depends on continuing new stimulus into the market (new products/services, more work marketing) to keep the "passive" flow stable. If you look at the world of indie tabletop RPGs, for example: Kevin Crawford of Sine Nomine Press makes a very good living and a significant percentage of it is "passive" sales of his back catalog. But if he stopped publishing and promoting new game projects, sales of that back catalog would very likely shrivel to nothing within a calendar year. The open-secret ingredient is always more work. It's why someone like Crawford can afford to tell everyone exactly how he does what he does... Giving away extensive production files that show you his whole creative process, soup to nuts: 99% of people aren't going to put in the work necessary to sustain the passive portion of an individual income.
enraged_camel 5mo ago
Side note: after drowning in LLM-generated content, it's pretty refreshing to read something written by a human. They're a pretty good writer, too!
- dlcarrier 5mo ago
  Who needs LLM garbage when you have MLM garbage?
fred_is_fred 5mo ago
I'm not sure passive income is the right way to describe a drop shipping operation where you have to interact with customers. Passive income is $VT.
eek2121 5mo ago
As someone who had actual passive income (small amount, a few hundred USD/mo) prior to my life being ruined by a medical accident: I agree (I killed my site because it was the right thing to do, I could not generate content for it because I couldn't function, so I did not want to waste the time/money of my users). One thing the author does NOT see, however, is that the local folks doing all the hard work like mowing lawns, building furniture, etc. are in absolute panic over "AI" because their niche little lawn mowing/car washing/house cleaning business has been determined to be irrelevant by ChatGPT, etc. Oh and before you ask, there are folks claiming they can solve that exact thing, and those hard working folks are buying those products, hoping it will solve their downtrend in internet leads.
- Marsymars 5mo ago
  > One thing the author does NOT see, however, is that the local folks doing all the hard work like mowing lawns, building furniture, etc. are in absolute panic over "AI" because their niche little lawn mowing/car washing/house cleaning business has been determined to be irrelevant by ChatGPT, etc. How does what ChatGPT thinks about lawnmowing matter? Like, specifically, who's going to be mowing the lawns if it's not the people who are currently doing it?
  - redwood 5mo ago
    Sounds like he means the methods that they used to use to advertise to find customers online have broken
    - Marsymars 5mo ago
      Yeah, I get that, but I'm asking why that matters in the aggregate. Presumably there are still the same number of lawns that need mowing. Like, is chatgpt going to result in a significant change in who is mowing those lawns, or the frequency of lawn mowing, or the composition of yards?
  - pas 5mo ago
    the robotaxi-ification of any and all movable capital goods is coming... ([insert intense Helms deep music!]) so some guy with a robot, Elon Mows, of course initially it will be just kids from India remote controlling the robots, but ... the AI is coming! (okay, it's likely about leads and advertising, the negative sum game, and OpenAI wants to have an ad-supported free tier)
pdonis 5mo ago
One thing in the article struck me as way too optimistic: > What actually makes money hasn't changed. You find something people need. You get good at providing it. You charge a fair price and you keep showing up even when it's tedious and even when you don't want to. You build relationships over years. You build reputation over years. You can make money doing this, yes--but most people who are really rich don't. There are lots of ways to game the system that don't involve the kinds of wacky things the article talks about.
- grebc 5mo ago
  She does just mention passive income covering your monthly spend, which to be fair is not ‘really rich’.
  - pdonis 5mo ago
    In what I quoted, she wasn't talking about passive income; she was talking about making money by actually creating value. I'm saying it's a shame that our system is set up so people who actually create value don't end up really rich, while people who game the system do.
- jimbokun 5mo ago
  Apple makes devices people like and use. Many people loved their Teslas. Netflix makes shows people enjoy. Facebook really did help people stay in touch with friends and family before replacing it with the Feed of Rage. Google was far better than anyone else at finding things on the early web. I would say really successful companies at least go through a stage of Building Something People Want. Even if they stray from that as they become more successful.
  - pdonis 5mo ago
    How many people got really rich as a result of Apple, Facebook, and Google doing things that created actual value? I get that all those companies are really rich, but most of the people involved aren't.
hn_throwaway_99 5mo ago
This article really felt like a misdiagnosis to me. Sure, a lot of these people were just buying hype from these "get rich from drop shipping!" influencers, just like a million other suckers who got dollar signs in their eyes with real estate schemes, pyramid sale schemes, yada yada, a tale as old as time. I don't think this "passive income" trap is really anything new, and I don't think it was some unique thing that "ate a generation of entrepreneurs", as if that trap didn't exist then instead we'd see all these successful people. Instead, what I think has drastically changed over the past 40 years or so is the ability of a solopreneur to make real money. Just look at all the posts on HN asking about how much people make on their side gigs. You rarely see anything more than a couple hundred bucks a month. There are notable exceptions, but unfortunately a lot of those notable exceptions are scammy, spammy business models. It's just simply much harder as a small/smaller business to make money and compete with the big boys. Wealth inequality doesn't just apply to people, but also companies. For example, in the past many entrepreneurial types may have started retail stores, while now it's incredibly difficult to compete with the likes of Amazon et al. I read an article recently that the number of public companies has halved compared to a few decades ago. The Wilshire 5000 stock index, for example, actually only includes about 3400-3700 companies now.
- Loughla 5mo ago
  We started a trophy and award business because my spouse was already making shirts and stuff so we had most of the equipment. The overhead is really low thanks to quick shipping from a large employee owned national supplier (seriously, JDS industries is fucking awesome). It's enough to pay for itself easily and pay for a vacation or two a year, for about 4 hours of work a week. If we really put effort in, it could replace our day jobs. Where most people go wrong is their expectation. We expected this to fund a vacation and maybe car payments. That it's doing that is exactly right and we don't want to take it any further. If people had that view, instead of feeling like they have to make a billion dollars, I think side gigs would be a different beast entirely.
  - saulpw 5mo ago
    There are many levels between "pays for a vacation or two a year" and "billion dollars". I think most people just want to make a comfortable living (which includes eventual retirement) and not have to work themselves to the bone.
grebc 5mo ago
Thanks for posting, great article and I read one of Joan’s pieces earlier this week without realising.
fmajid 5mo ago
Get-rich-quick schemes/scams existed long before this generation.
davidw 5mo ago
Yeah, I don't think I could do a pure 'passive income' thing with no 'soul' to it, but there is something to be said for building a business that runs and makes money even when you are asleep or on vacation. This is something that some 'passion businesses' where it's all about the founder and their skills, fail to do.
aridiculous 5mo ago
“The game looks easy, that’s why it sells” - Elliott Smith
just-the-wrk 5mo ago
Have we all forgotten Tim Ferriss' book 'The 4 Hour Work Week'? It was enormously influential and was likely involved in every one of these failed entrepreneur's ventures This discussion reads like 'staying inside from 2019-2022 changed social structures' without saying COVID once
- aaron695 5mo ago
  [dead]
- jimbokun 5mo ago
  Or the writings of the guy who created this web site.
bawolff 5mo ago
> I've met dozens of smart, capable people who had actual energy, and who spent their entire twenties bouncing between passive income schemes instead of building real skills // real businesses // real careers. The author is acting like it hasn't always been this way. But it always has. There have always been people who felt the allure of the get rich quick scheme. Its always been true that if they just spent the same effort on doing things properly they would probably make it but instead they bounce from one stupid scheme to the next. Often its combined with some ideology about how the normal world is full of suckers and they are going to escape by not playing the game. Fraudsters love to target people who want to pull one over on the world. They are easy to manipulate so they usually fall for it when presented with an opportunity too good to be true. The article, with a couple details about the specific examples changed could have probably been written in victorian times.
- nunez 5mo ago
  This is true. It's a plot point in "Little Miss Sunshine," a movie that came out in 2006. One of the main characters tries to sell a SYSTEM to get their family out of lower class living. Get-rich-quick books have been around a long, long time. I'd wager they've been around since the printing press. And they always devolve into "buy low, sell high" or selling get-rich-quick systems to other people. Passive income's not new either. It was (sometimes still is) a massive marketing play for franchisees. Spend $100k+ to open a franchise; the franchisor takes care of the rest; grab a hammock while you watch the money roll in. Never ever works that way, but that's how they've been marketed for a while.
laughing_abder 5mo ago
[flagged]
NordStreamYacht 5mo ago
Running an online store isn't "passive income." Passive income is from rental properties, mutual funds and (my dream) a rich uncle's trust fund.
- icedchai 5mo ago
  I’d argue that unless you’re using a property manager, rental property isn’t really passive, either. Do you want that call at 3 am to fix a flood?
  - Ekaros 5mo ago
    At that point I wonder why not just invest in REIT. And then look at how those compare to other possible companies... And then figure out nothing makes much sense.
    - Nasrudith 5mo ago
      Have you seen the taxes for REITs? They are complicated and often taxed as ordinary income instead of capital gains. I have heard recommendations to only use them in Roth IRAs.
      - icedchai 5mo ago
        I have a bunch of REITs in my "dividend" portfolio. This is true, most of the dividends are not qualified.
- jimbokun 5mo ago
  Hope your rich uncles are watching their backs!
  - NordStreamYacht 5mo ago
    I'm sure I don't know what you're talking about.
mlmonkey 5mo ago
I blame Tim Ferriss and his "4 hour work week" book. I belive he talks about selling vitamins and letting some guys in India manage his site. Doesn't get his hands dirty. (This is from memory, so please forgive any misconceptions about it).
- jimbokun 5mo ago
  The core was simply that he created a successful business, but was spending more time running it than he would be working a normal full time job. Then he delegated more and more responsibilities, allowing them to make decisions for anything up to a certain dollar amount, then kept raising the dollar amount. This ended in him checking email a few times a week totaling about 4 hours altogether.
TZubiri 5mo ago
There's a type of similar trap for devs, not necessarily a passive income trap because most go for a saas and accept the infinite-version release cycle. What some devs usually fall for ( not by watching some youtube video, but by falling into the idea organically on their own as a kind of emergent behaviour ) is doing the minimal effort of a saas, like a template of the necessary part without adding the actual value. The way this most often presents itself is a payment proxy, think about the minimal requirements for any software service, it charges money, so that's where they start, a stripe account, maybe an LLC, payment links or payment tables, they can now charge money. Then they make a frontend, a website, of any kind, this comes first, not to serve some kind of need, a landing page, and the actual product is a landing page as well, use react as well because that's the thing you do. Finally, what is computing, it has something to do with data, so let users upload some images or videos, then you let them charge users for it. Bam, you have now reached the same app SaaS that millions of indie devs developed, like a patreon thing, an OnlyFans if you allow that shit, a gumroad. A host that allows uploaders to charge money. If you don't even want to go through the hassle of hosting the images or content, you can just let the users upload a link, and charge for that Must be thousands of these Linktree, campsite, taplink, patreon, cafecito, matecito, tecito. The dropshipping thing is similar to this but it has a physical component, the idea of a business is just the minimal core, a caricature conception of what a business is, you buy a thing, and you sell it for more.
hellopineapple 5mo ago
There is nothing wrong with pass income, exchange time for Money by definition has its limit and only when your money compound you still to build savings then wealth. I scroll through half the article and the only under luring reason the author came up with is that dropshipping guy don’t care. People who don’t care have little chance at successful entrepreneurship anyway.
xivzgrev 5mo ago
As the old saying goes: the best way to make money on the internet, is to tell other people how to make money on the internet
- ButlerianJihad 5mo ago
  I was in community college taking some real basic, entry-level I.T. classes. And one of my classmates seemed nice, normal young guy about 20, already married. And one day on campus I see him drive up in a Mercedes. And I ask him what’s going on. Well, he tells me that he learned a little bit about cryptocurrency, and now he had gone into business where he advises people on how to invest in cryptocurrency. And I thought, “That’s really wise!” and I hope he is still doing well! Basically a great way to stay above the hype and scams. Surely some sort of federal regulations would begin to apply... but good luck!
  - triceratops 5mo ago
    > And I thought, “That’s really wise!” He was smart, but not necessarily wise. Wisdom would've been not spending the money on a Mercedes at 20 years old. I mean that's ok he was a kid. I would've done the same at that age.
- nottorp 5mo ago
  That's just a modernization of the selling shovels thing...
yieldcrv 5mo ago
I'm partially familiar with this ideology that the author refers to, but I think it's important to separate it from actual passive income: dividends and treasury bonds give passive earnings, you need capital. the "passive income" savants did not and do not have capital. case in point: it should not be noteworthy that the author's friend was "$800 in the hole", it should be such a rounding error that it couldn't be any of Joan's concern. And honestly, it probably isn't and Joan put an obsessive amount of weight into an off-comment. $800,000 in treasuries, on the other hand, now you have passive income - only ~$37,000/yr - but enough to live like a royalty in South East Asia for the next 30 years, passively, followed by getting all $800,000 back. Class inequality aside, throwing darts at the wall and seeing what sticks isn't a bad business strategy, and you really don't need to be passionate about any particular business idea to collect income. I hope Joan's friends found something that worked from them. For me its just stay employed so I can accumulate capital for the side projects. Sometimes side projects become bigger than the employment, but my businesses are just expeditions, not forever projects. I've never watched dropshipping influencers but I did sell some of my own electronics on eBay and noticed some opportunities in the process. Sometimes I put up identical listings as someone else's at a wildly inflated price, and people would buy from me because it seemed more serious. I would buy from the cheaper ad and put my own buyer's address in the shipping destination. Never seeing the product. Not scalable as I think its against the one of the terms, but you can do it between marketplaces too.
stockresearcher 5mo ago
I’ve met a lot of “passive income” folks over the last few years, and all of them sounded like their businesses were very actively managed. Never made much sense to me. I do disagree that all sub$100 blenders are the same, though. But still! The main reason restaurants use Vitamix blenders is that they are so much safer when blending burning hot stuff, like soups. When you turn off a normal blender, you’re fairly likely to create an air bubble that pops a little later, sending drops of very hot liquid into the face/eyes of the operator. A Vitamix, if you turn it off correctly, does not create the bubble. This is irrelevant for most home users, including me. So I don’t have one.
- semireg 5mo ago
  Blending hot liquids requires care because turning on and heating the air causes the lid to blow off. Most blenders are limited by physics. Vitamix have an analog dial for speed which allows you to heat the air more slowly. Turning off bubble? Maybe I’ve experienced that … but seems like an inexperienced operator with hot liquids and powerful motors is just a recipe for disaster.
ggm 5mo ago
Back when I was young and motivated about being left wing instead of being old and jaded but still left wing, we called people who lived off other people's work or by profits without effort "rent seeking social parasites" I like the sound of a "rent seeking social parasite" trap. As the Mikado says in the eponymous Gilbert & Sullivan opera: "something humorous, but lingering, with either boiling oil or melted lead." That was before I became old enough (as I am now) to live off my superannuation and pension, which is also "passive income" but joy of joys, not a side gig. I'm not in denial about where my pension income comes from. It's other people's labour. That's what I'm invested in.
- greensh 5mo ago
  Back then it was parasites, now they are called bluntly capitalists.
  - ggm 5mo ago
    My mum was born in 1926 and had a particular way of saying ca-pittle-ists which somehow embodied a degree of contempt I can't capture.
hyperadvanced 5mo ago
This is horribly written but largely true.
SudheerTammini 5mo ago
Very well written article, it gets into the core of the problem and explains the hidden patterns. I want to articulate few other variations of this just as a reference. - The productivity gang, if everyone is so productive and so well organised then what are the outcomes of this productivity? - Self help - if self help books are solving real problems then where is the need to buy multiple self help books? - The course trap - if someone is already earning millions dollars where is the need for him to sell $699 course These are some questions I would ask myself regularly, there is nothing right or wrong because end of the everyone has to servive.
- pas 5mo ago
  a very entertaining, highly-recommended, and intense gonzo video essay on the topic of the courses scams https://m.youtube.com/watch?v=biYciU1uiUw https://m.youtube.com/watch?v=biYciU1uiUw
  - cryptopian 5mo ago
    A timely recommendation, as the Mikkelsens were recently ordered to pay $1.5 million by the FTC for misleading customers https://www.ftc.gov/news-events/news/press-releases/2026/04/publishingcom-pay-15-million-misleading-consumers-about-how-much-income-they-could-earn-using https://www.ftc.gov/news-events/news/press-releases/2026/04/...
balderdash 5mo ago
I literally roll my eyes when people tell me about about some massive market opportunity that they feel like they’re better positioned to arbitrage away than people with more capability / infrastructure / domain expertise - and can’t explain why those market participants are ignoring this “obvious” opportunity
_nivlac_ 5mo ago
Great read. Didn't realise how widespread this was, and I know someone who is stuck in this system. How would you approach someone to help them out of it? Don't think I can just throw them this article and say "you're wrong".
- Tcehrarzy 5mo ago
  Actually it also reminds me of one of my friends. He is doing everything very shallowly and yeah, chasing passive income, but never succeeded on building anything lasting. I think the only way is to realize that labor and work is some basic human conditions like what Arendt said before, then you start to have some awe towards work, which is not something hated by passive income chaser. This is a good article indeed.
- pas 5mo ago
  the obvious problem with any such scheme is that things are already priced in. if it would be so easy to build personal passive income businesses hedge funds would be going around recruiting people and funding them. or the government. or the Effrctive Altruist. but most small business are bad, inefficient, hard to scale them, etc. (that doesn't mean there are no way to make money this way, but economically those boil down to bets. sure, sure, the aforementioned fancy investment funds also do bets, usually more sophisticated ones, and who doesn't, right? unless you are actively building a bunker somewhere around the Darién gap and recruiting people to your doomsday cult you are betting on the global economy chugging along. but! eventually one has to price in risks-weighted return, and usually "passive income" is pretty poor compared to a boring job that pays really well.)
ilamont 5mo ago
> Free to do what? Sit on a beach, apparently. The author apparently never read Tim Ferriss’ The 4 hour work week which not only whiteboarded some of the described schemes 20 years ago, but also had an illustration of a hammock suspended between two palm trees on the cover. That was the dream: Set up a system, live on a beach.
scuff3d 5mo ago
Legit Vitamix blenders are great though
tesse 5mo ago
Nice blog post, but I have to say that having a link on top of the page to some creative agency subscription service is quite ironic. These services are a dime a dozen, providing the same zero value product to the users, advertising on a cool looking website done by outsourcing to some guy that vibecoded it. A more hasty fellow might have flagged this post as self-advertisement without necessary tags.
swrobel 5mo ago
Wantrapreneurs
stephbook 5mo ago
Was it ever a trap? I don't think so. Sure, these people could have "worked" for their money, self-employed or as a "wagey in a cagey", but the whole point was that they didn't want to do it.
wsmhj 5mo ago
I think the article conflates two different things: the idea of passive income and the grift around it. Having a SaaS product that runs while you sleep isn't a trap — it's just good business design. The trap is paying $997 for a course on how to do it. And what makes it worse is the survivorship bias baked into these communities. The ones loudly promoting passive income strategies are almost always making their money teaching passive income — not from the strategies themselves. The actual successful indie founders I know are pretty quiet about it. The concept isn't broken; the ecosystem around selling the dream is.
- fittingopposite 5mo ago
  Hey mister AI!
atoav 5mo ago
My small brother is part of that hype. At his age I had a few lucrative freelance jobs under my belt, but he is oddly fixated at getting money without putting in anything that could be specified as work. I did what I loved doing and got paid for it, for him there is nothing he loves doing that he could earn money with. I now work in high level education in one of the top universities in that field in Europe and so I am in touch with many of his generational peers. Sadly I can't help but recognize this a significant trend, within some students (luckily a minority) thst has emerged in the past 5 years. As if they want to do the thing without actually doing the thing. Like a musician who wants to be a musician, but despises spending time on playing or rehearsing actual music. I am not entirely sure what it is all about, but I could imagine both the internet and a certain US president has shaped the idea that appearance is the only thing that matters, while substance is for losers and suckers.
wolvesechoes 5mo ago
There is no other word that reeks more of ideology than entrepreneur. It is a name of the fake promise fed to masses by people having wealth and power, and not willing to share it.
deleted 5mo ago
[deleted]
tech_ken 5mo ago
> But zoom out and what you had was just an enormous machine converting human ambition into noise Calling it “ambition” is generous IMO. Passive income chasers always give “desperation” more than “ambition”. I also feel a bit weird about mourning “a diverted generation of entrepreneurs”, personally I feel like this generational obsession with entrepreneurship almost forcibly led to the dropshipping scams we see today. In a world where everyone is constantly trying to get some side project off the ground of course some folks are going to pursue the shortcut version of that.
nunez 5mo ago
> If you've tried to google "best [anything]" in the last five years and gotten a wall of nearly identical listicles, all with the same structure ("We tested 47 blenders so you don't have to!"), all making the same recommendations, all linking to the same Amazon products, you've experienced the results. This also ruined Reddit as the source for this research. Before social media growth hackers figured out how to run campaigns on Reddit (around three years ago feels right, though I'm sure it's been happening at a smaller scale for a lot longer), you could type "best $THING site:reddit.com" and be fairly sure that you'll get a discussion about really good products amongst actual people. Nowadays, you can be fairly sure that most of the discussion is astroturfing, with some of it being completely AI-generated. This is also ruining my _other_ use case for Reddit: finding good places to eat in my favorite cities recommended by locals that live there. > podcast hosts interviewing each other in an endless circle of mutual promotion where everyone claimed to make $30K/month It's always $30k/mo _revenue_. Never profit. We don't talk about profit.
pricingpeel 5mo ago
the "giving a shit is by definition not passive" line is the whole essay imo. everything else follows from that. the piece ive been thinking about though is the distinction between extractive info-products and compiled info-products. the affiliate blog churning out blender reviews someone never touched is extractive. but a furniture maker who writes a book about furniture making, from 20 years of doing it, isnt really "passive income" even if the book sells while they sleep. its just consulting-at-scale. the work was front-loaded, not absent. the trap as she frames it is when the book comes first and the 20 years of experience never happens. when the product IS the meta-product about how to make the product. thats the ouroboros she nails. fwiw im currently 4 days into a 30-day experiment shipping public work daily before asking anyone to pay for a compiled version. its painful in a way the "passive" framing cant accommodate, which is probably a sign its real. the people who sold "passive" never had to live through the days where nothing happens.
Gerargus 5mo ago
[dead]
cafecito_dev 5mo ago
[flagged]
Olivia_Pan 5mo ago
[dead]

406 points by devonnull 5mo ago

yoyohello13 5mo ago

[flagged]

coredog64 5mo ago
"Rent seeking" has a specific definition* and it is not "I use large capital investments to generate regular payments". Buying housing with the intent of renting it is not rent seeking. This is Wikipedia, which is as good as most other definitions: Rent-seeking is the act of growing one's existing wealth by manipulating public policy or economic conditions without creating new wealth
- valiant55 5mo ago
  In what way does buying a property and renting it create wealth? Isn't buying a property with the intent to rent it manipulation of economic conditions?
  - pc86 5mo ago
    If you think buying a house and renting it out "manipulates economic conditions" you need to prove it because that's a claim, especially with regard to "manipulate."
    - lotsofpulp 5mo ago
      The manipulation is in the political limit of housing supply and the limit on land value tax rates.
      - jeffbee 5mo ago
        The homevoter hypothesis is mostly nonsense. There isn't a coordinated, conscious effort to restrict the supply of homes based on rational expectations of excess returns. People restrict the supply of homes due to misguided aesthetic reflexes, racism, nostalgia, and a bunch of other stuff, not because they are mustache-twirling capitalists.
      - pc86 5mo ago
        Maybe it is (I'm not so sure but I'm open to the argument), but even if true, it's a completely separate thing from someone buying a home and renting it out.
  - db48x 5mo ago
    Yes. The land is wealth, the house is wealth, and _living in_ the house is wealth. Like it or not, not everyone can afford to buy a house. Maybe they don’t have a down payment, or can’t get a good interest rate on a mortgage. Instead of renting money and using it to buy the house, they need to just rent the house instead. If there were no rentals available of any kind, they would go homeless¹. Having them renting something instead of going homeless makes wealth for both them and for society as a whole. ¹ We’ll just assume that homesteading is impossible these days.
- deleted 5mo ago
  [deleted]
- butterlettuce 5mo ago
  [flagged]
  - jeffbee 5mo ago
    Why? There are loads of people who can afford to rent a house but can't afford to rent a million dollars. I genuinely cannot understand where this hatred of people who rent out houses comes from.
  - OrderlyTiamat 5mo ago
    Not necessarily. I rent my house, and the housing corporation who I rent from are not rent seekers, they provide a service to me which I'm happy with, and which they invest in. They could've bought up the land and house and not improved it at all and depend on the housing crisis deepening for increased resell profit- but they did not do so, they maintained this house I'm in and ensured me and future tenants can continue enjoying this place. That's not rent seeking.
  - pdonis 5mo ago
    People who can't afford to buy a house need a place to live too. Believe it or not, there are people who buy houses with the intent of renting them out to those people, to actually help them.
  - em-bee 5mo ago
    i could not afford the capital investment to buy a house, and i am not interested, it would only lock me down. my family once bought an apartment. we lived there for a few years. the mortgage payments were twice as high as the rent would have been. when we moved out we were told the place could not be sold. the family still has the place and it is probably still empty. lots of money wasted. when you buy a house with the intent to sell it for a profit, then you are driving up housing costs. i'd say that's even worse than renting it out.
  - didgetmaster 5mo ago
    Let me guess..you have an equal disdain for people who own hotels, rental cars, or work as an UBER driver. All these things involve renting out something to fill a temporary need.
- michaelchisari 5mo ago
  There is rent-seeking, rent extraction and the rentier class. All are a part of the process of enclosure. Landlords are included in this but it may not seem that way because enclosure happened so long ago.
lotsofpulp 5mo ago
I don’t think it’s even spin, it’s just the jargon the IRS uses. And wanting to make money while you sleep has been a thing long before 2015.
- deleted 5mo ago
  [deleted]
beloch 5mo ago
Rent seeking is for those who already have capital and can use it to influence those with political power. "Passive income" is for those who don't own capital. One works. The other... often not.

jazz9k 5mo ago

Passive income are just get rich quick schemes that were common decaded ago. I started a business like this, but it wasn't passive. I shipped everything to my office before inspecting and shipping product out. It lasted almost 10 years with 1 million annual revenue. It was not passive.

Ifkaluva 5mo ago
Sounds like you were running an import and distribution business. Not the same thing as drop shipping :) as the drop shipping people will joyfully tell you, “you’re not supposed to touch the product”
- QuercusMax 5mo ago
  the inspection part is a big deal. drop shippers don't add any value, but inspecting the goods (and rejecting those that don't meet spec) actually adds value.
- mrdependable 5mo ago
  Dropshipping is just logistics. There is a lot of dropshipping that has nothing to do with ordering off Alibaba.

faanghacker 5mo ago

This article has a narrow definition of passive income, limiting it to these low-barrier-to-entry schemes. Other parts of the FIRE world have emphasized being a landlord or flipping houses, for example. I personally made it happen by working a FAANG SWE job for 13 years, not getting sidetracked by the startup cult, saving and investing 70% of my after tax income, etc. And no I didn't get into crypto, but I still managed to make it with conventional investments. In fact, I chose to pursue a career in the tech industry in order to pursue financial independence in the first place. Because I knew back then (circa 2005) all the tech Kool aid was BS. That "don't be evil" was just a facade. And time has proven me right and my haters wrong, those who thought it was unethical for me to place wealth building ahead of career building. It's been four years since I've been out of a job. Now I'm creating more passion oriented content. I'm never bored.

paulpauper 5mo ago
This is the way. There is huge survivorship bias when it comes to start-ups, even AI start-ups. When it comes to wealth creation, it's hard to beat a 20-30% CAGR with big tech stocks since 2010 or so, which was doable.
HeyLaughingBoy 5mo ago
> thought it was unethical for me to place wealth building ahead of career building Twelve year olds?
- faanghacker 5mo ago
  High achieving college students.
zem 5mo ago
> those who thought it was unethical for me to place wealth building ahead of career building. that might well be the first time I've seen "career" and "ethical" conflated in that way. I've definitely seen the people who think you're a fool and possibly a sucker if you chase short term wealth over career stability, and there's definitely a veneer of unethicalness clinging to the notion of get-rich-quick, but I cannot understand how "establish yourself in a career" is an ethical concern.

georgemcbay 5mo ago

"Passive Income trap" wantrepreneurs haven't really gone away, they have just shifted to crypto rug pull culture and now prediction markets and app-based gambling. They'll keep existing as long as the root cause that creates them (massive wealth inequality in general and the growing delta between productivity and wages) exists, so probably until our financial systems fully collapse in about 2032.

ryandrake 5mo ago
These people migrate like geese through the exact same stuff. I knew a couple of people way early on into affiliate marketing, then they all migrated to LeadGen, then to Drop Shipping, then online poker, then crypto, then NFTs, and now of course, they're all doing AI gigs. It's the exact same group of people migrating like birds from scheme to scheme.
- conorcleary 5mo ago
  I think this is what the 'forest for the trees' phrase is getting at...
- pingou 5mo ago
  What does it mean to be doing AI gigs? Because AI seems really different than drop shipping, online poker, crypto, and NFTs.

secretsatan 5mo ago

Met a guy that ran some dropshipping thing in a bar once, once he found out i was a programmer he kept on trying to get me to fix his website for free because it was easy, would not take no for an answer. I just kept upping how much money i would charge him till i got sick of it and left. I knew a few guys like that in crypto too, before crypto came along and they got into that, this guy told me he’d written a twitter app, it was a bot that pumped gold at some influencers command. Spurred me to write an app though.

nobleach 5mo ago
"My nephew makes websites, and he's 14... I could just have him do it" - Every client of mine during my contracting days. It took me way too long to reply with, "Oh that's great news! I wasn't sure of my availability, and was certain I was going to be way too expensive. Glad you got it figured out."
- dpb001 5mo ago
  I think the 14 year old nephew has been around for every iteration of technology - there are probably clients now threatening to just have their nephew vibe code the thing you're trying to spec out. Once, when fed up with this during a discussion on a small moonlighting job I said "Yeah, kids are pretty good with this stuff these days, Tell you what - have him get started and I'll be available to give him any help he needs at 2x my rate".
- tombert 5mo ago
  Someone told me that in 2013 when I was trying to do contract work. I gave him a quote that I thought was reasonable, and he thought it was too much and he told me that his thirteen year old son could do it for free. I responded that he was the one who had reached out to me, and if he feels like his son can do it then he shouldn't have wasted his time trying to find a contractor since that will be more expensive. The client didn't like the attitude and I didn't get the job, but I was kind of glad because it was pretty clear to me that he would have tried to weasel out of paying me regardless.

cucumber3732842 5mo ago

Everything I'd want to do on a "side gig to iron out the kinks and then eventual business" basis is regulated to the point where that path is economically impossible and the only way to be in the black is to take out a big f-ing loan, quit your job and go all in on your new business. And it's not just me, all my buddies have this gripe. We've all got skills and experience and equipment outside our immediate careers and we'd like to use those to provide value to people but there's just no way to do that inside the rules and none of us our interested in risking our retirements operating outside them. I just upped my retirement contribution and decided that the big evil BigCos can do all the value creating and the finance middle men can have their take. I guess that's the reason everyone does the slumlord or VRBO thing.

mothballed 5mo ago
Where I live out in the country there are a lot of people with those kind of businesses. They bring you the goods and services to/from in a truck. If you ask to look at what they have... they have no address and won't tell you anything more than their goods/services dropped from the sky. At that point, I don't try to probe further... if I am happy I would rather not know.
- cucumber3732842 5mo ago
  >Where I live out in the country there are a lot of people with those kind of businesses. They bring you the goods and services to/from in a truck. If you ask to look at what they have... they have no address and won't tell you anything more than their goods/services dropped from the sky. Yeah there's a fair amount of that here too. Thinking about it on a meta level I think on the "low end" it's basically just a hack around how expensive employees are when you consider exposure. Sure you could have your $15/hr guys stay late and power wash your box trucks, deep clean your facility, etc, but some guy with a van will come in and do it on the weekend for a flat fee and if he falls off the ladder that's not your problem. And on the high end it's a hack around overhead. You can have some guy show up on a jobsite, set up a tent to keep predatory eyes off and weld up the broken thing on your backhoe or the rental company calls that guy and repairs it on your job site without telling you giving you deniability. No expensive compliance costs of adding hot work to your job site or running a shop where that stuff happens regularly. >if I am happy I would rather not know. Always better to be able to say you don't know rather than "I asked and the answer seemed fishy but I didn't probe".

hannahstrawbrry 5mo ago

"It was an ouroboros that had incorporated in Delaware and was running Facebook ads," is my favorite line I've seen in a minute, great read

zem 5mo ago
my favourite bit was 8<------------ Free to do what? Sit on a beach, apparently. Every single one of these people wanted to sit on a beach. I've never understood this. Have they been to a beach? There's sand. It gets everywhere. You can sit there for maybe three hours before you want to do literally anything else. 8<------------ I laughed out loud when I read it, because it's so true.
- ghaff 5mo ago
  I “retired” about a year ago. Back to actively doing some tech industry analyst stuff with some folks I know. Keeps me as busy as I care to be.
  - teamonkey 5mo ago
    I would dearly love to be as busy as I care to be.
    - HeyLaughingBoy 5mo ago
      Right? That's my ultimate goal.
- michaelchisari 5mo ago
  Nature is wonderful because it will relax and center oneself while making it clear why we created civilization.
- paulddraper 5mo ago
  I love the beach. Living near the beach is nice. You can sit on it, walk on it, swim on it, surf on it, run on it, fish on it. Better than a cement sidewalk, IMO.

qurren 5mo ago

> Free to do what? Sit on a beach, apparently. Quite the opposite for me. I'd like to have freedom to work on things I want to work on without "paying rent", "paying medical bills", or "short term profitability" being a constraint.

entropicdrifter 5mo ago
Yeah, I'm a musician and a certified audio engineer. I'd rather be writing and recording music than working for healthcare/mortgage costs
TremendousJudge 5mo ago
yeah, but the guys selling the courses were/are all obsessed with being at the beach
- bluefirebrand 5mo ago
  I'm pretty sure that being at the beach is really just universal marketing shorthand for "being somewhere that no one would ever expect you to even reply to emails from"
  - bawolff 5mo ago
    Or more generally, just doing whatever you want. I dont think anyone literally wanted to sit on a beach 24/7 365 days a year. However plenty of people would want the ability to just wake up one day and on a whim fly to a hawaii until they get bored then fly somewhere else.
  - aianus 5mo ago
    Working from the beach is much more enjoyable than working from a cubicle in Toronto in January all work tasks being equal. Much cheaper too, ridiculously enough.
    - jpetso 5mo ago
      If you pay for beach accommodation instead of a dwelling in some higher-priced metropolitan area, sure. As an add-on though, still more expensive. I'd wager that most people are working towards a home base in the lands they're used to, then go on trips every now and then. Selling your metropolitan home base gets you the permanent beach lifestyle for sure, but permanently removing oneself from more densely populated areas is not for everyone.

quercusa 5mo ago

Got trapped in an Amway pitch in my teens and have been inoculated against such things ever since.

pc86 5mo ago
I wish Amway was bigger so more people would be exposed to it and be similarly inoculated.
- slyall 5mo ago
  Well it was bigger. But the people who used to get swept by MLMs are now selling drop-shipping, affiliate websites or blockchain.
- bluGill 5mo ago
  At least amway has real product. You are expected to sell to make money in the early years. In 30 years of real work you get a passive income retirement plan - but you need to put in real work selling things to get there. when you look at the real business model of those who have had success they are still selling the soap in retirement. It is not going to get you rich, but it isn't too bad a life. well it was - the only people I know in amway are in their 80s and so it may be different. amway deserves the hate. Truth is it isn't as easy as they tell you.
m463 5mo ago
You are reminding me about a day decades ago when a guy I met and his wife were sitting in my living room with my gf and I. He wanted to talk science fiction, and his wife and my gf were going to talk about nursing. Seemed like a nice couple until they started talking about "something they were doing" in a mysterious way... I remember saying, "sounds like scamway or something" and he actually had to say that it was in fact amway he was talking about. uncomfortable. didn't go much further than that. Looking backwards I realized how little friction we had getting to know these people, etc... sigh.
jimbokun 5mo ago
When the Internet was a quite new a guy who knew I was a programmer met with me to pitch an Internet business and it took me a while to figure out he was literally pitching Amway online.

homeonthemtn 5mo ago

>But zoom out and what you had was just an enormous machine converting human ambition into noise. Ah, the story of a generation

entropicdrifter 5mo ago
Just one?
- toyg 5mo ago
  Indeed. In the case of music-obsessed boomers, that saying rings true in a very literal way.

paulpauper 5mo ago

Isn't passive income a cornerstone of of the Rich Dad Poor Dad Books? This long predates 2020. I would say selling masks and only being $800 in the hole is a lot better than starting a "regular business" and down $80k-800k.

ryandrake 5mo ago
Yes, it was the exact same scheme. Rich Dad Poor Dad was basically "Buy lots of cheap, crappy houses and become a slum lord" expanded into thousands of pages of books, seminars, and self help guides.
- datadrivenangel 5mo ago
  and Kiyosaki has declared bankruptcy at least once!
  - qzw 5mo ago
    There really should be a special category for business books written by people who’ve gone bankrupt. I know at least two well known examples, but there’s got to be a whole lot more.
    - jimbokun 5mo ago
      Dave Ramsey went bankrupt but to be fair he incorporates it into his teaching. “Hear are the things that led me to bankruptcy, and here are the things I did to climb out of it and become financially stable again.”
wj 5mo ago
You’re right. Books like the Four Hour Workweek and Escape From Cubicle Nation were guides to passive income twenty years ago.
- ghaff 5mo ago
  It’s not totally risk-free income (but what is) but a decent pile invested sensibly makes for pretty good passive income depending on your goals.

add-sub-mul-div 5mo ago

It's like the flood of AI shovelware projects being spammed here daily. Were these the people who were really going to do anything substantive anyway? Or just the shortcut-taking types?

zem 5mo ago

this is unquestionably the best thing I've read on hackernews this week, perhaps all this month. should be required reading in high school, for the mental lens it provides.

bitwize 5mo ago

"Passive income" as your only financial salvation is one of those memes that broke off from the MLM "tool scam" industry, that is, selling courses, seminars, and other training materials to people in MLMs on the pretext of teaching them sales, marketing, and business, but it's really just brainwash material designed to keep them from leaving. The other big one is positive thinking/the law of attraction/"The Secret". If MLM is the kaiju, these are the spider-things that fell off the Cloverfield Monster's body and started killing people in the subway tunnels. But like how Robert Smith performed with Siouxsie Sioux as "The Glove" while still fronting The Cure, these memes have built plenty of side scams while still enjoying friendly partnership with MLM itself.

deleted 5mo ago

[deleted]

vonnik 5mo ago

“You can’t cheat an honest man.” While that isn’t always true, honesty is a great defense against being enlisted in scams that promise easy money.

subscribed 5mo ago
And probably a greatest vulnerability in scams (like "oopsies! We mistakenly refunded you 20000 instead of 2000. Can you send us these 18000 back?")

recursivecaveat 5mo ago

I appreciated when "passive income" was the flavor of the week because it was a good signpost for people you could ignore. In particular anybody who didn't understand that you could assign a present value to future income, or that infinite series can sum to finite values. Seriously, the prototypical example of being an author is not particularly passive income lol! A book being print-on-demand indefinitely != infinite income. 99% of copies will almost certainly be sold within a few years, not least due to active marketing on your part. It's very likely to be a worse deal than getting paid a quite modest and disappointing sounding amount up front.

ghaff 5mo ago
And that 4 figure advance from a publisher won’t go far either even if you earn it out and get a few royalties.
bluGill 5mo ago
often the real value of writing a book is you can convince people to pay you to speak. I've had several classes at work where they gave me a book that had everything in the class.
sfRattan 5mo ago
The way it shakes out is that there's no widely accessible way of escaping actual, ongoing work, which is what unmotivated people actually hear behind the words "passive income." Whatever the industry/vertical/field, a tiny number will hit it so big that they can actually stop working. Everyone else can bolster their income with passive sources, but that passive income ultimately depends on continuing new stimulus into the market (new products/services, more work marketing) to keep the "passive" flow stable. If you look at the world of indie tabletop RPGs, for example: Kevin Crawford of Sine Nomine Press makes a very good living and a significant percentage of it is "passive" sales of his back catalog. But if he stopped publishing and promoting new game projects, sales of that back catalog would very likely shrivel to nothing within a calendar year. The open-secret ingredient is always more work. It's why someone like Crawford can afford to tell everyone exactly how he does what he does... Giving away extensive production files that show you his whole creative process, soup to nuts: 99% of people aren't going to put in the work necessary to sustain the passive portion of an individual income.

enraged_camel 5mo ago

Side note: after drowning in LLM-generated content, it's pretty refreshing to read something written by a human. They're a pretty good writer, too!

dlcarrier 5mo ago
Who needs LLM garbage when you have MLM garbage?

fred_is_fred 5mo ago

I'm not sure passive income is the right way to describe a drop shipping operation where you have to interact with customers. Passive income is $VT.

eek2121 5mo ago

As someone who had actual passive income (small amount, a few hundred USD/mo) prior to my life being ruined by a medical accident: I agree (I killed my site because it was the right thing to do, I could not generate content for it because I couldn't function, so I did not want to waste the time/money of my users). One thing the author does NOT see, however, is that the local folks doing all the hard work like mowing lawns, building furniture, etc. are in absolute panic over "AI" because their niche little lawn mowing/car washing/house cleaning business has been determined to be irrelevant by ChatGPT, etc. Oh and before you ask, there are folks claiming they can solve that exact thing, and those hard working folks are buying those products, hoping it will solve their downtrend in internet leads.

Marsymars 5mo ago
> One thing the author does NOT see, however, is that the local folks doing all the hard work like mowing lawns, building furniture, etc. are in absolute panic over "AI" because their niche little lawn mowing/car washing/house cleaning business has been determined to be irrelevant by ChatGPT, etc. How does what ChatGPT thinks about lawnmowing matter? Like, specifically, who's going to be mowing the lawns if it's not the people who are currently doing it?
- redwood 5mo ago
  Sounds like he means the methods that they used to use to advertise to find customers online have broken
  - Marsymars 5mo ago
    Yeah, I get that, but I'm asking why that matters in the aggregate. Presumably there are still the same number of lawns that need mowing. Like, is chatgpt going to result in a significant change in who is mowing those lawns, or the frequency of lawn mowing, or the composition of yards?
- pas 5mo ago
  the robotaxi-ification of any and all movable capital goods is coming... ([insert intense Helms deep music!]) so some guy with a robot, Elon Mows, of course initially it will be just kids from India remote controlling the robots, but ... the AI is coming! (okay, it's likely about leads and advertising, the negative sum game, and OpenAI wants to have an ad-supported free tier)

pdonis 5mo ago

One thing in the article struck me as way too optimistic: > What actually makes money hasn't changed. You find something people need. You get good at providing it. You charge a fair price and you keep showing up even when it's tedious and even when you don't want to. You build relationships over years. You build reputation over years. You can make money doing this, yes--but most people who are really rich don't. There are lots of ways to game the system that don't involve the kinds of wacky things the article talks about.

grebc 5mo ago
She does just mention passive income covering your monthly spend, which to be fair is not ‘really rich’.
- pdonis 5mo ago
  In what I quoted, she wasn't talking about passive income; she was talking about making money by actually creating value. I'm saying it's a shame that our system is set up so people who actually create value don't end up really rich, while people who game the system do.
jimbokun 5mo ago
Apple makes devices people like and use. Many people loved their Teslas. Netflix makes shows people enjoy. Facebook really did help people stay in touch with friends and family before replacing it with the Feed of Rage. Google was far better than anyone else at finding things on the early web. I would say really successful companies at least go through a stage of Building Something People Want. Even if they stray from that as they become more successful.
- pdonis 5mo ago
  How many people got really rich as a result of Apple, Facebook, and Google doing things that created actual value? I get that all those companies are really rich, but most of the people involved aren't.

hn_throwaway_99 5mo ago

This article really felt like a misdiagnosis to me. Sure, a lot of these people were just buying hype from these "get rich from drop shipping!" influencers, just like a million other suckers who got dollar signs in their eyes with real estate schemes, pyramid sale schemes, yada yada, a tale as old as time. I don't think this "passive income" trap is really anything new, and I don't think it was some unique thing that "ate a generation of entrepreneurs", as if that trap didn't exist then instead we'd see all these successful people. Instead, what I think has drastically changed over the past 40 years or so is the ability of a solopreneur to make real money. Just look at all the posts on HN asking about how much people make on their side gigs. You rarely see anything more than a couple hundred bucks a month. There are notable exceptions, but unfortunately a lot of those notable exceptions are scammy, spammy business models. It's just simply much harder as a small/smaller business to make money and compete with the big boys. Wealth inequality doesn't just apply to people, but also companies. For example, in the past many entrepreneurial types may have started retail stores, while now it's incredibly difficult to compete with the likes of Amazon et al. I read an article recently that the number of public companies has halved compared to a few decades ago. The Wilshire 5000 stock index, for example, actually only includes about 3400-3700 companies now.

Loughla 5mo ago
We started a trophy and award business because my spouse was already making shirts and stuff so we had most of the equipment. The overhead is really low thanks to quick shipping from a large employee owned national supplier (seriously, JDS industries is fucking awesome). It's enough to pay for itself easily and pay for a vacation or two a year, for about 4 hours of work a week. If we really put effort in, it could replace our day jobs. Where most people go wrong is their expectation. We expected this to fund a vacation and maybe car payments. That it's doing that is exactly right and we don't want to take it any further. If people had that view, instead of feeling like they have to make a billion dollars, I think side gigs would be a different beast entirely.
- saulpw 5mo ago
  There are many levels between "pays for a vacation or two a year" and "billion dollars". I think most people just want to make a comfortable living (which includes eventual retirement) and not have to work themselves to the bone.

grebc 5mo ago

Thanks for posting, great article and I read one of Joan’s pieces earlier this week without realising.

fmajid 5mo ago

Get-rich-quick schemes/scams existed long before this generation.

davidw 5mo ago

Yeah, I don't think I could do a pure 'passive income' thing with no 'soul' to it, but there is something to be said for building a business that runs and makes money even when you are asleep or on vacation. This is something that some 'passion businesses' where it's all about the founder and their skills, fail to do.

aridiculous 5mo ago

“The game looks easy, that’s why it sells” - Elliott Smith

just-the-wrk 5mo ago

Have we all forgotten Tim Ferriss' book 'The 4 Hour Work Week'? It was enormously influential and was likely involved in every one of these failed entrepreneur's ventures This discussion reads like 'staying inside from 2019-2022 changed social structures' without saying COVID once

aaron695 5mo ago
[dead]
jimbokun 5mo ago
Or the writings of the guy who created this web site.

bawolff 5mo ago

> I've met dozens of smart, capable people who had actual energy, and who spent their entire twenties bouncing between passive income schemes instead of building real skills // real businesses // real careers. The author is acting like it hasn't always been this way. But it always has. There have always been people who felt the allure of the get rich quick scheme. Its always been true that if they just spent the same effort on doing things properly they would probably make it but instead they bounce from one stupid scheme to the next. Often its combined with some ideology about how the normal world is full of suckers and they are going to escape by not playing the game. Fraudsters love to target people who want to pull one over on the world. They are easy to manipulate so they usually fall for it when presented with an opportunity too good to be true. The article, with a couple details about the specific examples changed could have probably been written in victorian times.

nunez 5mo ago
This is true. It's a plot point in "Little Miss Sunshine," a movie that came out in 2006. One of the main characters tries to sell a SYSTEM to get their family out of lower class living. Get-rich-quick books have been around a long, long time. I'd wager they've been around since the printing press. And they always devolve into "buy low, sell high" or selling get-rich-quick systems to other people. Passive income's not new either. It was (sometimes still is) a massive marketing play for franchisees. Spend $100k+ to open a franchise; the franchisor takes care of the rest; grab a hammock while you watch the money roll in. Never ever works that way, but that's how they've been marketed for a while.

laughing_abder 5mo ago

[flagged]

NordStreamYacht 5mo ago

Running an online store isn't "passive income." Passive income is from rental properties, mutual funds and (my dream) a rich uncle's trust fund.

icedchai 5mo ago
I’d argue that unless you’re using a property manager, rental property isn’t really passive, either. Do you want that call at 3 am to fix a flood?
- Ekaros 5mo ago
  At that point I wonder why not just invest in REIT. And then look at how those compare to other possible companies... And then figure out nothing makes much sense.
  - Nasrudith 5mo ago
    Have you seen the taxes for REITs? They are complicated and often taxed as ordinary income instead of capital gains. I have heard recommendations to only use them in Roth IRAs.
    - icedchai 5mo ago
      I have a bunch of REITs in my "dividend" portfolio. This is true, most of the dividends are not qualified.
jimbokun 5mo ago
Hope your rich uncles are watching their backs!
- NordStreamYacht 5mo ago
  I'm sure I don't know what you're talking about.

mlmonkey 5mo ago

I blame Tim Ferriss and his "4 hour work week" book. I belive he talks about selling vitamins and letting some guys in India manage his site. Doesn't get his hands dirty. (This is from memory, so please forgive any misconceptions about it).

jimbokun 5mo ago
The core was simply that he created a successful business, but was spending more time running it than he would be working a normal full time job. Then he delegated more and more responsibilities, allowing them to make decisions for anything up to a certain dollar amount, then kept raising the dollar amount. This ended in him checking email a few times a week totaling about 4 hours altogether.

TZubiri 5mo ago

There's a type of similar trap for devs, not necessarily a passive income trap because most go for a saas and accept the infinite-version release cycle. What some devs usually fall for ( not by watching some youtube video, but by falling into the idea organically on their own as a kind of emergent behaviour ) is doing the minimal effort of a saas, like a template of the necessary part without adding the actual value. The way this most often presents itself is a payment proxy, think about the minimal requirements for any software service, it charges money, so that's where they start, a stripe account, maybe an LLC, payment links or payment tables, they can now charge money. Then they make a frontend, a website, of any kind, this comes first, not to serve some kind of need, a landing page, and the actual product is a landing page as well, use react as well because that's the thing you do. Finally, what is computing, it has something to do with data, so let users upload some images or videos, then you let them charge users for it. Bam, you have now reached the same app SaaS that millions of indie devs developed, like a patreon thing, an OnlyFans if you allow that shit, a gumroad. A host that allows uploaders to charge money. If you don't even want to go through the hassle of hosting the images or content, you can just let the users upload a link, and charge for that Must be thousands of these Linktree, campsite, taplink, patreon, cafecito, matecito, tecito. The dropshipping thing is similar to this but it has a physical component, the idea of a business is just the minimal core, a caricature conception of what a business is, you buy a thing, and you sell it for more.

hellopineapple 5mo ago

There is nothing wrong with pass income, exchange time for Money by definition has its limit and only when your money compound you still to build savings then wealth. I scroll through half the article and the only under luring reason the author came up with is that dropshipping guy don’t care. People who don’t care have little chance at successful entrepreneurship anyway.

xivzgrev 5mo ago

As the old saying goes: the best way to make money on the internet, is to tell other people how to make money on the internet

ButlerianJihad 5mo ago
I was in community college taking some real basic, entry-level I.T. classes. And one of my classmates seemed nice, normal young guy about 20, already married. And one day on campus I see him drive up in a Mercedes. And I ask him what’s going on. Well, he tells me that he learned a little bit about cryptocurrency, and now he had gone into business where he advises people on how to invest in cryptocurrency. And I thought, “That’s really wise!” and I hope he is still doing well! Basically a great way to stay above the hype and scams. Surely some sort of federal regulations would begin to apply... but good luck!
- triceratops 5mo ago
  > And I thought, “That’s really wise!” He was smart, but not necessarily wise. Wisdom would've been not spending the money on a Mercedes at 20 years old. I mean that's ok he was a kid. I would've done the same at that age.
nottorp 5mo ago
That's just a modernization of the selling shovels thing...

yieldcrv 5mo ago

I'm partially familiar with this ideology that the author refers to, but I think it's important to separate it from actual passive income: dividends and treasury bonds give passive earnings, you need capital. the "passive income" savants did not and do not have capital. case in point: it should not be noteworthy that the author's friend was "$800 in the hole", it should be such a rounding error that it couldn't be any of Joan's concern. And honestly, it probably isn't and Joan put an obsessive amount of weight into an off-comment. $800,000 in treasuries, on the other hand, now you have passive income - only ~$37,000/yr - but enough to live like a royalty in South East Asia for the next 30 years, passively, followed by getting all $800,000 back. Class inequality aside, throwing darts at the wall and seeing what sticks isn't a bad business strategy, and you really don't need to be passionate about any particular business idea to collect income. I hope Joan's friends found something that worked from them. For me its just stay employed so I can accumulate capital for the side projects. Sometimes side projects become bigger than the employment, but my businesses are just expeditions, not forever projects. I've never watched dropshipping influencers but I did sell some of my own electronics on eBay and noticed some opportunities in the process. Sometimes I put up identical listings as someone else's at a wildly inflated price, and people would buy from me because it seemed more serious. I would buy from the cheaper ad and put my own buyer's address in the shipping destination. Never seeing the product. Not scalable as I think its against the one of the terms, but you can do it between marketplaces too.

stockresearcher 5mo ago

I’ve met a lot of “passive income” folks over the last few years, and all of them sounded like their businesses were very actively managed. Never made much sense to me. I do disagree that all sub$100 blenders are the same, though. But still! The main reason restaurants use Vitamix blenders is that they are so much safer when blending burning hot stuff, like soups. When you turn off a normal blender, you’re fairly likely to create an air bubble that pops a little later, sending drops of very hot liquid into the face/eyes of the operator. A Vitamix, if you turn it off correctly, does not create the bubble. This is irrelevant for most home users, including me. So I don’t have one.

semireg 5mo ago
Blending hot liquids requires care because turning on and heating the air causes the lid to blow off. Most blenders are limited by physics. Vitamix have an analog dial for speed which allows you to heat the air more slowly. Turning off bubble? Maybe I’ve experienced that … but seems like an inexperienced operator with hot liquids and powerful motors is just a recipe for disaster.

ggm 5mo ago

Back when I was young and motivated about being left wing instead of being old and jaded but still left wing, we called people who lived off other people's work or by profits without effort "rent seeking social parasites" I like the sound of a "rent seeking social parasite" trap. As the Mikado says in the eponymous Gilbert & Sullivan opera: "something humorous, but lingering, with either boiling oil or melted lead." That was before I became old enough (as I am now) to live off my superannuation and pension, which is also "passive income" but joy of joys, not a side gig. I'm not in denial about where my pension income comes from. It's other people's labour. That's what I'm invested in.

greensh 5mo ago
Back then it was parasites, now they are called bluntly capitalists.
- ggm 5mo ago
  My mum was born in 1926 and had a particular way of saying ca-pittle-ists which somehow embodied a degree of contempt I can't capture.

hyperadvanced 5mo ago

This is horribly written but largely true.

SudheerTammini 5mo ago

Very well written article, it gets into the core of the problem and explains the hidden patterns. I want to articulate few other variations of this just as a reference. - The productivity gang, if everyone is so productive and so well organised then what are the outcomes of this productivity? - Self help - if self help books are solving real problems then where is the need to buy multiple self help books? - The course trap - if someone is already earning millions dollars where is the need for him to sell $699 course These are some questions I would ask myself regularly, there is nothing right or wrong because end of the everyone has to servive.

pas 5mo ago
a very entertaining, highly-recommended, and intense gonzo video essay on the topic of the courses scams https://m.youtube.com/watch?v=biYciU1uiUw https://m.youtube.com/watch?v=biYciU1uiUw
- cryptopian 5mo ago
  A timely recommendation, as the Mikkelsens were recently ordered to pay $1.5 million by the FTC for misleading customers https://www.ftc.gov/news-events/news/press-releases/2026/04/publishingcom-pay-15-million-misleading-consumers-about-how-much-income-they-could-earn-using https://www.ftc.gov/news-events/news/press-releases/2026/04/...

balderdash 5mo ago

I literally roll my eyes when people tell me about about some massive market opportunity that they feel like they’re better positioned to arbitrage away than people with more capability / infrastructure / domain expertise - and can’t explain why those market participants are ignoring this “obvious” opportunity

_nivlac_ 5mo ago

Great read. Didn't realise how widespread this was, and I know someone who is stuck in this system. How would you approach someone to help them out of it? Don't think I can just throw them this article and say "you're wrong".

Tcehrarzy 5mo ago
Actually it also reminds me of one of my friends. He is doing everything very shallowly and yeah, chasing passive income, but never succeeded on building anything lasting. I think the only way is to realize that labor and work is some basic human conditions like what Arendt said before, then you start to have some awe towards work, which is not something hated by passive income chaser. This is a good article indeed.
pas 5mo ago
the obvious problem with any such scheme is that things are already priced in. if it would be so easy to build personal passive income businesses hedge funds would be going around recruiting people and funding them. or the government. or the Effrctive Altruist. but most small business are bad, inefficient, hard to scale them, etc. (that doesn't mean there are no way to make money this way, but economically those boil down to bets. sure, sure, the aforementioned fancy investment funds also do bets, usually more sophisticated ones, and who doesn't, right? unless you are actively building a bunker somewhere around the Darién gap and recruiting people to your doomsday cult you are betting on the global economy chugging along. but! eventually one has to price in risks-weighted return, and usually "passive income" is pretty poor compared to a boring job that pays really well.)

ilamont 5mo ago

> Free to do what? Sit on a beach, apparently. The author apparently never read Tim Ferriss’ The 4 hour work week which not only whiteboarded some of the described schemes 20 years ago, but also had an illustration of a hammock suspended between two palm trees on the cover. That was the dream: Set up a system, live on a beach.

scuff3d 5mo ago

Legit Vitamix blenders are great though

tesse 5mo ago

Nice blog post, but I have to say that having a link on top of the page to some creative agency subscription service is quite ironic. These services are a dime a dozen, providing the same zero value product to the users, advertising on a cool looking website done by outsourcing to some guy that vibecoded it. A more hasty fellow might have flagged this post as self-advertisement without necessary tags.

swrobel 5mo ago

Wantrapreneurs

stephbook 5mo ago

Was it ever a trap? I don't think so. Sure, these people could have "worked" for their money, self-employed or as a "wagey in a cagey", but the whole point was that they didn't want to do it.

wsmhj 5mo ago

I think the article conflates two different things: the idea of passive income and the grift around it. Having a SaaS product that runs while you sleep isn't a trap — it's just good business design. The trap is paying $997 for a course on how to do it. And what makes it worse is the survivorship bias baked into these communities. The ones loudly promoting passive income strategies are almost always making their money teaching passive income — not from the strategies themselves. The actual successful indie founders I know are pretty quiet about it. The concept isn't broken; the ecosystem around selling the dream is.

fittingopposite 5mo ago
Hey mister AI!

atoav 5mo ago

My small brother is part of that hype. At his age I had a few lucrative freelance jobs under my belt, but he is oddly fixated at getting money without putting in anything that could be specified as work. I did what I loved doing and got paid for it, for him there is nothing he loves doing that he could earn money with. I now work in high level education in one of the top universities in that field in Europe and so I am in touch with many of his generational peers. Sadly I can't help but recognize this a significant trend, within some students (luckily a minority) thst has emerged in the past 5 years. As if they want to do the thing without actually doing the thing. Like a musician who wants to be a musician, but despises spending time on playing or rehearsing actual music. I am not entirely sure what it is all about, but I could imagine both the internet and a certain US president has shaped the idea that appearance is the only thing that matters, while substance is for losers and suckers.

wolvesechoes 5mo ago

There is no other word that reeks more of ideology than entrepreneur. It is a name of the fake promise fed to masses by people having wealth and power, and not willing to share it.

deleted 5mo ago

[deleted]

tech_ken 5mo ago

> But zoom out and what you had was just an enormous machine converting human ambition into noise Calling it “ambition” is generous IMO. Passive income chasers always give “desperation” more than “ambition”. I also feel a bit weird about mourning “a diverted generation of entrepreneurs”, personally I feel like this generational obsession with entrepreneurship almost forcibly led to the dropshipping scams we see today. In a world where everyone is constantly trying to get some side project off the ground of course some folks are going to pursue the shortcut version of that.

nunez 5mo ago

> If you've tried to google "best [anything]" in the last five years and gotten a wall of nearly identical listicles, all with the same structure ("We tested 47 blenders so you don't have to!"), all making the same recommendations, all linking to the same Amazon products, you've experienced the results. This also ruined Reddit as the source for this research. Before social media growth hackers figured out how to run campaigns on Reddit (around three years ago feels right, though I'm sure it's been happening at a smaller scale for a lot longer), you could type "best $THING site:reddit.com" and be fairly sure that you'll get a discussion about really good products amongst actual people. Nowadays, you can be fairly sure that most of the discussion is astroturfing, with some of it being completely AI-generated. This is also ruining my _other_ use case for Reddit: finding good places to eat in my favorite cities recommended by locals that live there. > podcast hosts interviewing each other in an endless circle of mutual promotion where everyone claimed to make $30K/month It's always $30k/mo _revenue_. Never profit. We don't talk about profit.

pricingpeel 5mo ago

the "giving a shit is by definition not passive" line is the whole essay imo. everything else follows from that. the piece ive been thinking about though is the distinction between extractive info-products and compiled info-products. the affiliate blog churning out blender reviews someone never touched is extractive. but a furniture maker who writes a book about furniture making, from 20 years of doing it, isnt really "passive income" even if the book sells while they sleep. its just consulting-at-scale. the work was front-loaded, not absent. the trap as she frames it is when the book comes first and the 20 years of experience never happens. when the product IS the meta-product about how to make the product. thats the ouroboros she nails. fwiw im currently 4 days into a 30-day experiment shipping public work daily before asking anyone to pay for a compiled version. its painful in a way the "passive" framing cant accommodate, which is probably a sign its real. the people who sold "passive" never had to live through the days where nothing happens.

Gerargus 5mo ago

[dead]

cafecito_dev 5mo ago

[flagged]

Olivia_Pan 5mo ago

[dead]