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0 pointsdirtyaura9y ago0 comments

You are correct that it is not passive income in traditional sense, but in HN, "the passive income" has come to mean something that generates automatic revenue after the initial work without requiring significant maintenance/upkeep work.

The prime example of passive income used here is patio11's Bingo Card Creator.

One also could say that in traditional investing, the upfront work is the research work to find right index funds or buying property in real estate investing. They might be less work than writing a book, but revenues e.g. from passive index fund investing are also significantly less than from writing a book, if your starting capital is small.

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thinkloop9y ago

> One also could say that in traditional investing, the upfront work is the research work to find right index funds or buying property in real estate investing

This is the key point. In absolutes there is no such thing as passive income. Anything will take at least 1s of effort, and $0.001 of capital. The spirit of the term, is income that is heavily skewed towards being generated from assets rather than effort.

A new book is the edge case. While making money off IP is generally the perfect example of passive income. Quitting a job to become an author, is not. There is an implied lack of effort and cost in the question. Additionally, and importantly, there needs to be a sense of "free" in there.

The prototypical case:

- [bust your ass at work] >> [get evened out with paycheck] >> ["free!" passive income from savings]

New book case:

- [bust your ass writing] >> [nothing, world still owes you] >> ["free?" passive income from book IP]

Until the "nothing" gets filled in with the equivalent of a salaried wage, I'm not a fan of calling it "passive income".

mathgeek9y ago

> Until the "nothing" gets filled in with the equivalent of a salaried wage, I'm not a fan of calling it "passive income".

Would you also consider creating a static "how to" site that generates revenue from ads to not be passive income? I think that's the most basic example of what HN considers passive.

thinkloop9y ago

I think it depends where you are in the cycle. If you just finished putting in 50hrs of work, and have so far made $100, I wouldn't consider that true passive income. Fast-forward a year, and your income from the site has surpassed $2500 (the equivalent of your salaried wage for those hours), with minimal additional effort - now you are making passive income.

We're just defining words here anyway. I think a core component of what people think of when they think "passive income" is making a disproportional amount of income relative to effort put in. Until those proportions get dis'ed, you're just working at a sub-optimal job.

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0 pointsdirtyaura9y ago0 comments

The prime example of passive income used here is patio11's Bingo Card Creator.

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thinkloop9y ago

> One also could say that in traditional investing, the upfront work is the research work to find right index funds or buying property in real estate investing

The prototypical case:

- [bust your ass at work] >> [get evened out with paycheck] >> ["free!" passive income from savings]

New book case:

- [bust your ass writing] >> [nothing, world still owes you] >> ["free?" passive income from book IP]

Until the "nothing" gets filled in with the equivalent of a salaried wage, I'm not a fan of calling it "passive income".

mathgeek9y ago

> Until the "nothing" gets filled in with the equivalent of a salaried wage, I'm not a fan of calling it "passive income".

Would you also consider creating a static "how to" site that generates revenue from ads to not be passive income? I think that's the most basic example of what HN considers passive.

thinkloop9y ago

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