Ask HN: Passive Income Suggestions 2016 | Hacker News Reader

Ask HN: Passive Income Suggestions 2016

169 pointsdrumttocs899 comments

Similar questions have been asked in the past, but things change quickly. What are some passive income strategies that have worked for you in 2016?

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Perhaps a negative example might be interesting? I started working on game-development tools in 2015 and have sold a grand total of $0. Granted I have been contracting for the last year and haven't done development or marketing for a few months, but I would say it's a clear non-success.

If you're curious what it was, it's here: https://codano.com/typeforge/.

The reasons I've probably done poorly:

1) I haven't spent time networking with the people who are the market of the product. I worked with a few people on /r/gamedev on it last year, but never followed up.

2) There's a lot of other tools in this space, some free, some not-free (but platform-limited) and I haven't distinguished myself from any of those.

3) There's not a lot of supplemental material to suggest how people might use the product and why people might want to use this product over any others.

EDIT: and if you want a free license for kicks, just email me (see my profile).

Looks pretty cool. What language and UI toolkit did you build it with?

It's a Java app with a JavaFX web panel for the UI. I have a second (unreleased) version based on Electron and a Java "backend" for doing all the image processing heavy lifting.

I've been working on the hybrid framework as an open-source project here: https://github.com/orbitaljs

Codano, good name

At the risk of derailing, some feedback, if I may: I think it need better examples.

Of course, you're selling the tool, and it's the buyer's creativity which limits the outcome rather than your own - but the first thing I'm thinking when I look at that page is "oh this tool is at least ten years old, maybe it's still good, but I'm going to try and find something more modern".

It's just a weird psychological effect of the fonts on the page, I suppose. I'm not saying everyone's like that - and actually, I'm not the target market anyway, so maybe this doesn't apply. But I suspect if I'm thinking that, that others are too.

Thanks for sharing that. When all we see are success stories, we miscalculate the amount of effort required to start generating passive income. Passive income is rarely passive from day one.

Game Industry Vet here. Unfortunately middleware or tools for gaming have gone to the 0 margin, free area. Mainly because 99% of game generally don't make much money so people dont invest heavily. Those 1% that do make a lot of money tend to invest in the their own tool development or want to retain control of their middleware hence less money in the pot.

Another interesting point, IMO, is that game development attracts very capable developers. Thus they tend to be very adept at finding things for OS instead of forcing the company directors to buy large licences for convoluted software they don't need :)

Interesting! Good to know, and this obviously matches with my experience.

I feel like the level of complexity required to sell software for game development has moved up a fair bit to things like procedural texture/mesh generation.

I don't know if I'm going to continue along these lines. If I can squeak out a minimal revenue stream I'd be happy, but if there's literally zero opportunity in this area I'll have to look elsewhere.

I'm finding that people spend way more money in the rough prototyping phase than during the "ok let's build the real thing" phase. Especially in things like asset stores.

Myself and a bunch of friends working on VR stuff easily spend $10-50 on a random helper to get a prototype done in a few hours rather than a few days.

That is really interesting. I think definitely find myself doing this as well. It's easy to justify both personally and professionally. Thanks for bringing that up.

EXISTING:

1. Rental properties. Have 3 rentals that we purchased last year as part of a 1031 exchange (after selling the family ranch). I manage them and its been fairly low maintenance so far (knock on wood). FWIW student rentals in a university town aren't as bad as you might think. Most have a steady source of rent (parents or financial aid) and if you choose students in hard majors, they're less likely to party and trash the place (my theory).

2. Niche websites. I'm silent partner in a company that does website design and hosting for a niche industry. Obviously, we have people running operations and support so its only passive for me, but it makes a lot of money. I know Wix and Squarespace and Weebly are the big players here but tons of small businesses still need help with their website. Don't overlook something you think is a solved problem.

IN THE WORKS:

3. Jekyll-based landing pages. I think Unbounce and similar services are overpriced if you're just experimenting. So I've built a few landing pages specifically for Jekyll. I've ran a few tests with an attorney and another small business. Going well so far. Plan is to sell them as a one-time purchase for $29 or so. Just need to find a front-end/design partner to help crank out a few more layouts.

4. An API for lists. This might sound weird but I always needs lists of things in projects I make. Think "all the currency codes" or "all the universities in the US". So I've built some scrapers for a bunch of lists and plan to provide them as a simple API or YAML/PList downloads (for iOS apps).

5. Apple TV stuff. Got some Apple TV stuff in the works. Just not sure how that platform is gonna play out.

On lists I'd want: - a list of all possible domain name tlds (org, edu, info, etc)

Working on it

https://publicsuffix.org

> An API for lists.

I've written a few microservices for listing-lists, getting list-members, which generally just serve the contents of a JSON/YAML file.

I've done it often enough that I can see the value in a list-server, but equally it's something I'd struggle to see monetizing well, or even at all. How do you plan to handle that?

(Because in the worst case you can just be lazy and embed your list-data in your application itself as a lazy-loaded YAML file which is parsed on each request.)

Yeah, I often use the YAML or PList approach myself. My initial pricing experiment will be something like:

1. Buy any single list one-time for $9 (as a JSON/YAML/PLIST download)

2. Pay $49 per year for API access to all lists

That's an interesting pricing model, thanks for sharing.

I guess the key to drive subscriptions would be to ensure that your data-sources were updated constantly (where appropriate). I know in the past I've struggled to handle updates to things like UK postal-codes, where additions are frequent and omissions lead to errors being presented to clients.

Yeah, good updates are important but something I think can be mostly automated.

BTW, if you're interested in teaming up on it at all, by all means get in touch. I'm never opposed to a capable partner.

I think the programming side is trivial enough that you'd probably not benefit from my help/involvement.

The harder part is gathering accurate data, working out what lists users even want, and the promotion of the service/site. These last parts are the ones I'd struggle to be useful at.

Bought a multi-family house in a hot housing market using an FHA loan. Yeah, you do have to intend to live in it. But FHA will make it possible to purchase a 2,3 or 4 family rental property with little down (as low as 3.5% but really depending on loan limits, which vary by county, here it's about 800k,1m,1.2m respectively).

Once I acquired the property (no easy feat since sellers favor cash buyers here in NYC), I waited a few months and refinanced out of the FHA into a traditional loan, since my property went up in value. The 15% I put into it, plus the equity, gave me the 20% figure I needed to refinance. That shaved 25% off my total monthly cost, saving me $900 a month.

I have a tenant in one unit, and now I pay less for a duplex with a backyard and land in the second most expensive city in America, than my neighbors pay for a 1 bedroom apartment. Soon I plan to fix up one floor of the duplex and AirBNB it, so I will have literally 0 monthly housing expenses.

Passive? Mostly! But I also have a tax shelter (mortgage interest for one part, and repairs for another part), build equity and go long on a hard asset. And I pay less for a whole house including taxes than my buddies who bought condos do for single apartments.

The passive income will scale with inflation since it's rent, while the mortgage will stay flat for 30 years.

What neighborhood? I've been looking but NYC real estate just seems hella expensive and bubbly. So you're living there too?

Bed Stuy. I'd look there, Bushwick, eastern Crown Heights, Ridgewood, and similar neighborhoods with quick travel to Manhattan and near trendy areas. Bubbly? Maybe, but if your rental income covers or can cover the mortgage then it doesn't matter, is my rule of thumb, it's a great deal. The city has 500k more inhabitants in between 2000 and 2010, rent has only one direction to go given scarcity of housing - - while mortgage costs are fixed! I figured land had to be a good idea to own given that. Crime is more of a concern at the moment, I think the investment is solid.

Hey, that's really awesome. I'd really love to hear more about this from you personally! I live in Crown Heights right now. Would you be willing to maybe grab a coffee sometime? If so shoot me a message at zachfeldman at gmail!

My approach is simple: invest the vast majority of all money after expenses into VOO (S&P 500 index fund). First max out tax advantage accounts like 401k and IRAs, then regular accounts.

I have $1,100,000 in VOO. Trailing inflation adjusted returns are 7% ish. Call it $25,666 for the first 4 months of 2016. I KNOW market returns aren't smooth like this but it is a simple approach that works for me (I'm not selling this stock any time soon so ACTUAL returns thus far in 2016 don't matter to me at all).

The math to get to that number is (($1,100,000 x .07) / 12) * 4 months

this is my near exact strategy as well, except for holding a balance of 1,00,000... damn that's impressive.

I bought my first stocks in 1993. Stick with it and you can easily beat me!

Same here. I invested far less on an S&P tracking index and have doubled my investment over the past 5 years...

This is awesome - congrats on your success and saving. This is pretty what my financial strategy is. In another comment you said you first bought stocks in 1993 - were those the VOO or did you play around with buying individual ones for a while?

Any idea what the average amount you put in each year was? Just trying to get a feel for how long it will take me to hit that kind of number.

Save 2k a month and you can do it in 21 years. I'm saving more like 5.5K/mo now.

This is a great read: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...

2K is my salary!, I can't save more than 500euro

I have found the best side projects to be monetized versions of stuff which I built for my startup to save me time.

A recent example is a script which I originally hacked together to check for possible IP changes/submissions (copyrights, patents, trademarks etc) which might affect my startup's own IP.

It didn't cost very much to SaaS-ify the original script (outsourced using upwork.com) and after sending out a few emails and shoutouts in newsletters, events etc I have a pretty decent side-income from private clients and law firms (pays the rent & yearly holiday hopefully).

The hard part is making sure you don't let it distract you from your main project/job - I am at 3-4h/month and don't let myself go above that!

I've done some of this. Made some internal tech tools for non-tech business. Figured our problem may be one others also have, so made generic versions hosted online. A couple have become popular, but we're only talking hundreds of $$ each month.

Could you share the website of the service? I'm sure many startups here have a similar need.

I built a themes website (https://jekyllthemes.io) in a weekend that's monetized using affiliate links and Adsense. After the initial work was done, it's virtually 100% autopilot and brings in around $80/mo.

What sort of traffic numbers do you get, and how do they discover you? This is the sort of thing that I believe can be easily duplicated. Not copied, but translated to different ideas.

Generating traffic can be difficult, so the subject, plus actually useful content, is important.

In the last 30 days the site received 27,000 page views and 7,000 sessions. Organic search made up 80% of traffic. The concept of a curated list for XYZ can be translated for other ideas, sure. Getting traffic was part luck for me. At the time it was a low competition keyword but now there are a lot of similar sites up.

Good info. Thanks. I've had similar experiences where, with some luck, I've hit upon a keyword/subject ripe for the picking or perhaps just too small or specific to have generated much competition up to that point. It's fun when you find something like that! The hard part is know when you've found it (or not).

You would make much more if the hosting weren't so slow.

$80/month ??? Is that a typo or did you actually mean 80?

I've been running https://briefmetrics.com/ for almost 3 years now (email reports of your Google Analytics).

It has been going back and forth between 100% running itself and investing a couple months of effort into it. I discovered I really don't enjoy marketing/promotion, so it has languished for sure. It's up to a bit over $1,000/mo right now which I'm fairly happy about but I feel it could easily be x2-x5 of that with some sales effort commitment.

I'll write down some lessons I learned in hopes that I'll take my own advice in the future:

1) Avoid big-effort partnerships.

Briefmetrics was a partner in an app store launch for one of the biggest domain registrars. This required integrating with their single-signon and payment system and coordinating with their team in India and altogether what looked like a week of work turned into ~3 months of hell. A year later, all this effort yielded approximately 0 customers. The target audience fit was not very good (new domains is the worst time to get analytics reports) and the sunk cost of effort kept me going far longer than it should have.

I finally pulled the plug last month and I sleep much better. (Even pulling the plug took weeks longer than it should have, ugh. Never again.)

2) Commit effort to marketing/sales.

This is definitely advice I need to take for myself. I launched a bunch of new features to upsell existing customers (mobile reports, ecommerce, etc) but none of this is advertised anywhere for new customers. In fact, I've had a professionally-done redesign mockup sitting in my Dropbox for over a year now that I'm yet to implement. I have a half-dozen related blog post ideas I need to write about, audiences to target.

I'm seeing a lot of similar issues with other people here, "I built this but they didn't come." I feel you.

3) Seriously, do marketing/sales.

I built Briefmetrics because it's something I needed and my friends needed. I instantly had a set of initial paying customers, but organic growth from a small seed of users is slooooooow.

Meanwhile I see great salespeople grow to tons of customers on what amounts to a product cobbled together in a few hours. This totally makes sense to me, and we all need to respect it more.

I'm allocating a couple of weeks on the calendar to just focus on this. If you built something you're proud of, you owe it to the world to do a better job promoting it.

Dude, you should definitely raise your prices. I would pay at least $19 a month for this. Had to double take when I saw $8 a month.

Let's talk after you start paying. I'd love to hear how you're using it and how it's providing value for you—and even get a testimonial for the frontpage! :)

FWIW there are multiple tiers: $8/mo, $35/mo, $85/mo, $275/mo and I have one custom-priced "enterprise" client.

That's another lesson I learned: The kinds of feedback I get from paying customers vs drive-by trials is completely different and often opposite.

Ah, didn't realise there were multiple tiers. I thought you charging one flat price for everything. My bad! :)

I'd actually like to create a similar sort of service for a different niche, so find this very interesting. I'll definitely sign up and test it out. I'd also love to email back and forth to ask one or two questions about how you came to choosing certain data points over others. Will shoot you one after I sign up.

Looking forward to it! andrey at briefmetrics.com (or support or whatever at that domain) will do the trick. :)

I build a developer tool for premium plugin / theme authors in the Wordpress ecosystem. If you can build something that scratches an itch in a programming ecosystem, people are likely to pay for it.

Although with the amount of work I do on it, I'm not sure I'd call it passive ;)

I assume you spend a lot of time supporting paid customers? I'm on the same boat. Part of making something for a popular platform is the fact that a lot of customers with very little knowledge of programming will get to use it and will need support for the simplest things.

I'm right there with you. I have a free core plugin with add-ons, and while it's made more money than any of my previous ventures (plugins, SaaS apps), I'm no where near recouping my hours, and I'm currently in the middle of rewriting the whole thing...

Small pitch, I am the owner of Pressed (https://www.pressed.net), and we do white label managed WordPress hosting. So anyone can sign up to create their own Managed WordPress hosting brand, and refer clients to their brand and build recurring revenue. Our team handles all the running, support, etc for the brand so you can just sit back and feed customers into it.

Pretty passive :)

Genuine question. How can a managed hosting service be passive ? Specially since you handle the running and support.

Passive to the resellers, I'd imagine.

Passive and managed hosting is an oxymoron in my book. I know because I've been doing that for the last 15 years :)

If this is white-labelled, why do you get a cut of what I sell it for? Aren't I hiring you to host/manage/support and I simply proxy support to you guys for the duration of the service?

Or are you billing my customers and sending me money? In which this sounds like an affiliate program more than anything.

Peer to peer lending is the best thing I have found this year. You can get around 5 to 7 percent interest and you don't need a large amount of capital. With all the other financial markets so volatile right now this is a pretty solid rate of return. There are always risks of default that you will need to consider, but most platforms allow you to mitigate that with automated diversified portfolios.

Which platform? Lending Club seems... volatile at the moment.

Prosper has given me a ~8.5% return over the last 9 years.

Careful though, you can quickly be picking up pennies in front of a steamroller. It's a low amount of interest for unsecured debt and when you don't get the principal back that 5-7% suddenly seems not so high.

And "automated diversified portfolios" is exactly what mortgage backed securities were a decade ago. Look how that turned out.

For me risking no more than $25 ( the minimum ) on AA rated borrowers ( the best ) was a decent risk/reward.

That sounds like a really risky way to make pocket change. Why even bother?

In my experience, it turned out to be a very safe 6%. You can scale this up to any amount you wish - If you want to invest, say $1,000 total, you can choose to break it up into $25 per borrower and have 40 separate Notes. See, the whole point is, it's up to you: you may dial in exactly the amount of risk you want.

In other words it just takes 1 bad loan out of 20 to wipe out all the profits. Odds at vegas seems 150% better.

Historically people have made money on Lending Club, and lost it in Vegas. I'll stick with Lending Club.

There's not enough data to tell historically if people make money on Lending Club or not. People have historically made a lot of money on all sort of risky investments right up until they lost it all.

Mortgage backed securities were not risky because they were diversified. They were risky because nobody fully understood how undiversified they were, especially at the lower grade tranches.

Meanwhile, LC was alive in '08, and you can look at how their notes performed. Investors lost single digit percentages. In other words, they beat S&P by a lot.

> Meanwhile, LC was alive in '08, and you can look at how their notes performed. Investors lost single digit percentages. In other words, they beat S&P by a lot.

Comparing performance of 2008 vintage loans with 2008 S&P may not be appropriate.

First the 2008 loans didn't completely pay off until 2011. Second, the loans issued during recession (2008) will perform better during recovery phase (2008 onward). Such borrowers are likely to be with stable credit worthiness due to tighter credit criteria by lenders during recession. Also, as borrowers' economic condition improve with recovery, they are more likely to continue making payments instead of defaulting.

The worst performance for unsecured loans is generally for loans that were issued to borrowers during boom time and as economy is headed toward recession (2005-2008). Any event that impacts borrowers capability to make payment will impact first unsecured loans, credit cards, etc.

Federal Reserve (FRED) has quite a bit of data on different type of debts and how they have performed over the years if you are interested in exploring this segment further. I find the debt/lending/fixed-income/bond market segment very fascinating. It is generally not explored in-depth by most people and very quant/maths heavy.

I started playing around with Prosper in 2010. I have had a very good experience. My overall return is about 6%. It's very easy to dial in exactly the amount of risk/reward you want to take.

I had actually typed this up but deleted it because I thought the question was more about a beer-money level enterprise.

You might want to try out my project PeerCube https://www.peercube.com, a side project that became full-time job. We provide lots of analytics and automation for Lending Club and Prosper platform and work with both retail and institutional lenders on these platforms. As others mentioned, be careful with unsecured peer to peer lending. It is not all roses. Do your homework and stay diversified in your investments on and off peer to peer lending.

Cool!

also interested to know which site you use or would recommend?

Just remember that consumers fall apart very fast in downturns.

I just created http://namestormy.com to solve a problem I had, which is finding relevant free domain names.

I've hacked it together one morning and in a few days it got featured on product hunt.

I have some features (like automatically filtering domain names without the paid api) rolling out soon and I hope that could make a nice passive income.

I recorded some tutorial/lesson videos on niche tech topics and put them on YouTube. Spent about 40 hours creating and editing the videos. They have been online now for nearly 10 months and i have a total of ~250k views. That made me nearly $300.

Not a ton of money but considering it is truly passive and will probably be making another $500 in the next 10-15 months its acceptable.

Couldn't you monetize better with some niche related affiliate products?

Not using any affiliate links so far. I am working on a eBook that i want to self-publish via Amazon that is related to those topics, then market that book via the videos.

You should check out this link: http://bit.ly/ebookjamesaltucher

Did you already have some experience creating/editing videos?

Yes, some experience. I should also mention that i purchased a entry level $50 podcasting microphone.

Another fail example from me:

1. My friends and I were building an app named OrderIt. It's basically targeted to be used by waiters / waitresses to order food and beverage for a restaurant or coffeeshop instead of using paper and pen. The idea is not new but we aim to make it even easier for businesses by providing cross-platform apps and useful features. We have the app prototype ready but failed to do marketing/sales stuffs in the last three-month which means no customer at all. All of us coming from tech background who have no idea about marketing and sale stuffs. We also open-source source code for Android app on github for anyone interested in (https://github.com/leeu1911/orderit). We have no idea about business model and how to make money out of it currently.

2. I've built a website to use with Pomodoro technique (a time management technique). http://web-pomodoro.herokuapp.com/. So far, there's only me using it although it has around twenty views or so when I share the link on facebook. I need more seriousness I guess.

I am working on a newsletter for frontend developers and plan to monetize it with sponsorships and job listings. I can't keep up with all the news out there related to frontend development and thought others might be interested.

It will not be 100% passive but since I am already reading those articles anyway, adding them to a weekly newsletter should be relatively passive. If things workout as planed then best case scenario, it should generate me $2000/month.

The first issue comes out June 1st at http://frontend.curated.co

PS: If you have tips on promoting this and getting the word out let me know. I am running some targetted twitter ads for now and got a good amount of subscribers. My goal is to get it to 5000 subscribers very quickly.

One technique I have seen work fairly well is web development with a retainer for X hours a month done free of charge, with an hourly rate following. Customers tend to like having someone on call that doesn't tend to cost any extra.

Unfortunately, the market is never that big, since WordPress (and bigcommerce etc) covers most small business needs and any business of a decent size have dedicated developers or a contract with a dev shop.

I wrote a book to help boostrapped startups choose the best hosting solution:

https://www.hostingforappdevelopers.com/

It hasn't sold much yet, but I haven't been able to dedicate as much time as I would have liked to marketing it.

If someone wants to beat Stripe Atlas to the LLC formation game, I'll be their first customer.

I'm confused. There are plenty of services (LegalZoom) that allow you to form a Delaware corp/llc now. What exactly does Atlas offer that's new? Is it just a focus on non-US citizens?

It's the packaging of all of the other deals. Setting up bank accounts, preliminary basic legal advisory, accounting, etc., not to mention all the other benefits like AWS credits and introductory promo offers on B2B Saas vendors. The Atlas offering is quite compelling as a package, with the exception of needing it to be for a C Corp.

I built http://www.randomnamepicker.net/ last year and now get's $30+ per month from Adsense. Complete passive except for few updates here and there.

slight correction:

"click the 'Spin' button."

Nope, button clearly says 'Play'. Might wanna fix that.

Also looks totally sweet :)

The craigslist theory of design. It'll cost him a month's worth of revenue in labor to change it!

Thanks for the feedback. I'll fix this in the next update. :)

Do you mind sharing the traffic you're getting that translates to the adsense revenue? Static single-purpose sites like this one are an interesting way to generate passive income (think a small network of useful pages).

I get 200+ visitors and 1000+ pageviews each day and analytics shows an upward trend.

Last year, I wrote a guide to help junior devs get their first jobs, targeted mostly at developer bootcamp grads: https://kokev.in/hired-fast

It sold decently in 2015, and later that year I shifted sales focus to bootcamps and schools as opposed to individual students. The response has been great and earlier this year I've set up a few recurring deals for batch purchases. It's not life-changing money by any means, but it's great to see my content helping people at "scale" ;).

Make something that makes money. It can't be passive income without income. Figure out all the stuff you do to keep the money earning. Simplify that upkeep until it's a well documented set of steps or a nice web interface or something anyone can do. I'm finishing this part at the moment, having spent months converting my entire app business into an online dashboard.

Then you just need to find/pay someone to handle it for you. Lots of people online and in the real world are very well suited to well defined tasks they can 'just do'.

It really depends on your skillset... if you code or do creative work, building a theme, shooting stock photography, or creating music with low licensing fees are all good things.

I found this Inc article from January of this year pretty on point as well: http://www.inc.com/sujan-patel/you-don-t-need-to-be-a-millio...

Highly recommend against stock photography. Especially with sites like Pixabay, it's a race to the bottom. And when I sold stock photos ten years ago, it wasn't that profitable anyway.

I'm working on a for people looking to build equity in products. I'm just starting to work on this so no revenue yet, but thought this might be an appropriate thread to mention this.

So, if full-time isn't an option and your looking to work with a team because you don't have marketing, programming, design, administrative, customer service skills. email me.

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