[HN Gopher] Buy payphones and retire
___________________________________________________________________
Buy payphones and retire
Author : cratermoon
Score : 292 points
Date : 2024-10-28 16:33 UTC (6 hours ago)
(HTM) web link (computer.rip)
(TXT) w3m dump (computer.rip)
| anonzzzies wrote:
| Why would I want to retire? I am old and most my friends are
| boring or died after they retired. Sounds like hell on earth. I
| like working, it is my hobby and life.
| Swizec wrote:
| > Why would I want to retire? /../ I like working, it is my
| hobby and life.
|
| So you can work on things because you _want_ to not because you
| _have_ to. At least that 's my plan. Not quite there yet.
| iwontberude wrote:
| Makers, programmers, hackers always have to work by
| definition, the question is whether you also want to. That
| can be done anywhere, it's all a state of mind. Most of the
| answers to the problems of the world are inside of there.
| TheRealPomax wrote:
| Note that there are loads of things that you can't keep
| working on after you retire. If your company had you in a
| position where you ran really interesting projects, all of
| those are the company's projects, not yours. You got to work
| on them because you worked there, and once you retire you
| can't just keep working on them, you can't even do the same
| work on your own because your contract made that pretty
| clear: now you're committing IP theft.
|
| So you retire, and by law you're no longer allowed to do the
| thing you love. It's not a good deal.
| dleink wrote:
| The things I love are broader than "IP controlled by my
| company." I can see that if the thing you love is massive
| financial institutions or defense contracting or something?
| bongodongobob wrote:
| Maybe he's a helicopter mechanic or a million other
| things you can't just do at home.
| brewdad wrote:
| Go buy 40 acres in the desert and live your dream.
| dustyventure wrote:
| If a very expensive hobby is a lot of work are you
| working or retired?
| bongodongobob wrote:
| Unless it comes with a fleet of helicopters to play with,
| I don't see how that's helpful.
| TheRealPomax wrote:
| Or, you know, you're a specialist who worked their way
| into a career at anything that produces hardware.
| Philips, Samsung, heaven forbid you work for a larger
| corporation, how many of those people can there possibly
| be, right?
| Rumudiez wrote:
| You can be "retired" (don't _need_ to work) and still have
| a dayjob. My father-in-law does this and works 2 days a
| week so he doesn't get bored and has a little more spending
| money, all because he likes his profession but not because
| he has to work for a living anymore
| pc86 wrote:
| It's pretty cool that you have such detailed knowledge into
| everyone's personal circumstances that you know they all
| have employment contracts and what the details of those
| contracts are.
|
| Most people reading this right now are in the US, and the
| vast majority of US employees at at-will, which means no
| contract at all. Even for those with contracts, it's a
| pretty big leap to get to "IP theft" with anything anyone
| could reasonably work on in retirement.
| asveikau wrote:
| This article isn't about retirement; the reference to
| retirement is the line the scammer is using to hook people. The
| scammer is telling the mark they will generate lots of money
| from passive income (from payphone calls), and won't need to
| work. It is actually an article about Ponzi schemes.
| hinkley wrote:
| Ponzi schemes are pure financial instruments. If a product is
| involved it's called an MLM.
| asveikau wrote:
| I'd say that is a bit like splitting hairs, but the article
| does question the extent to which actual payphones and
| calls were actually involved..
| hinkley wrote:
| Ponzi schemes are illegal. MLMs are legalized Ponzi
| schemes. The outcomes are similar but one has a veneer of
| legitimacy that makes it more dangerous for some people.
| asveikau wrote:
| It's instructive not to argue the finer points without
| acknowledging what TFA says about the operators of the
| scheme breaking the law:
|
| > In 2006, Charles Edwards was convicted of 83 counts of
| wire fraud and sentenced to thirteen years in prison.
|
| Then another company:
|
| > By 2009, more than a dozen people had been convicted of
| fraud in relation to Prometheus.
| popcalc wrote:
| MLMs are pyramid schemes, not ponzis. For example bitcoin
| is a (somewhat decentralized, but centralized among major
| mining companies) pyramid scheme while Tether is a Ponzi.
|
| Both pyramid schemes and Ponzis are illegal. MLMs are
| illegal in many places. In the US they were successfully
| able to lobby their way into carving out a legal niche in
| the 80s. They are also the reason supplement safety is so
| loosely regulated in the US.
| jabroni_salad wrote:
| Do you already have financial independence? Not being able to
| understand why retiring would be desirable sounds like an
| incredibly privileged opinion.
| forinti wrote:
| You might not want to retire, but your body (or mind) might
| have other ideas.
| mock-possum wrote:
| I think the deal is when you retire you no longer _have_ to
| work. You can spend your time doing whatever you want. If you
| don't feel like working today, you don't have to. If something
| comes up last minute, you can change your mind. If you want to
| move to something new and more interesting, you can.
| IshKebab wrote:
| Don't humblebrag.
| Scoundreller wrote:
| > And what income is more passive than vending machine coin
| revenue? Automated vending has had a bit of a renaissance, with
| social media influencers buying old machines and turning them
| into a business.
|
| Iunno, where I grew up, vending machines were controlled by the
| mob. Up to mob hits in the HQ's parking lot.
|
| Makes me wonder if pay phones are the same after the telco
| offloaded them.
| asveikau wrote:
| I would imagine that's even more attractive to them in the old
| days, when they dealt in coins and bills. A modern vending
| machine probably mostly gets credit card transactions, which
| are traceable.
| adamc wrote:
| Yeah, same thought. Their attractiveness for laundering money
| may be diminishing.
| stult wrote:
| It's easier to launder money with services than goods anyway
| because you don't need to dispose of excess merchandise to
| make the books balance. Like if you want to claim to have
| sold 10000 cans of soda despite only selling 1000, you need
| to buy 10000 cans of soda or even the most superficial review
| of your accounts will reveal the scheme. The ideal laundering
| mechanism is a service with a high ratio of price to variable
| cost, like car washes or laundromats, because then it's
| easier to overstate income without needing to jump through
| hoops to overstate the matching costs.
|
| These days, it's almost trivial to launder via wash trades
| with the proliferation of online services with effectively
| zero marginal costs. e.g., setting up a freelancer account
| and a separate business account on some platform like Upwork
| and then hiring yourself. So I'd be surprised to see anyone
| laundering via sale of goods unless they are deeply
| incompetent or it's an opportunistic scheme of some sort
| (i.e., they are exploiting a unique opportunity that pops
| up).
| VirusNewbie wrote:
| >These days, it's almost trivial to launder via wash trades
| with the proliferation of online services with effectively
| zero marginal costs.
|
| like an MS Paint drawing of a monkey, but on the
| blockchain.
| maxwell wrote:
| I was thinking the other day that self-storage facilities
| seem ideal: you don't even need to account for
| discrepancies in utility usage, as in missing water at car
| washes and laundromats. Just say units are rented and paid
| in cash. Not aware of any KYC laws but haven't looked
| recently.
| potato3732842 wrote:
| There are no KYC laws for self storage because it's
| already standard practice so you can sue the person who
| pays cash for one month of storage and then crams the
| locker floor to ceiling with hazmat.
| mtnGoat wrote:
| Great theory lesson, but... You are basing all of this on a
| non cash world. Cash is still king in many parts of society
| that aren't entirely on the up and up. These are the OGs of
| this sport and definitely aren't incompetent. Plus sale of
| goods is very easy to fake if you have multiple parts of
| the vertical covered. things don't make sense if you've
| never done them.
| tomjen3 wrote:
| Depends on what you want to launder. Drugs are paid for in
| cash, so you need to launder cash - and the best way to do
| that is to have a business that does some amount of cash
| legally. I can imagine vending machines being useful here.
|
| You are right about needing to buy cans that you can then
| pretend to have sold. Unless of course you order from a
| supplier who is willing to write an invoice for a higher
| number of cans than he has sold you. I assume a more
| competent group would also own the supplier (though not,
| perhaps, on paper).
| bluGill wrote:
| You sell a can of soda for $50 and include a gram of
| cocaine. I don't know what cocaine sells for but that is
| how you make it work.
|
| more often this is done not in soda which has a street
| price that you can't get absurb values on. Better to sell
| a custom leather purse which can sell for a lot but you
| can make a junk one for almost nothing.
| 0cf8612b2e1e wrote:
| I have also heard that vending machine locations are highly
| contested. You can buy the machine, but you are not going to
| have the pull to deploy it at the airport. Those contracts were
| signed long ago.
| hyperhopper wrote:
| Then why are there so few? And containing such a small
| variety of goods?
|
| In Japan anywhere from a busy subway to a remote park, there
| will be rows of vending machines everywhere, with more
| varieties of sodas, coffees, soups, ice creams, candies, hell
| even clothes or meat! And those are just the common types.
| You're never far from what you want in an automated fashion.
|
| Why are we so behind in America when there seemingly is
| excess on the supply side for the chance to supply more goods
| and deploy more machines, and demand on the consumer side for
| better, more convenient, more available, and more varied
| vending machines goods?
| crooked-v wrote:
| There are many huge contextual differences between the US
| and Japan when it comes to vending machines, but the most
| obvious one is that Japan is eminently walkable, while the
| US is so pedestrian-unfriendly that there's no guarantee
| that people will even be around your row of vending
| machines in the first place.
| hifromwork wrote:
| I agree, but in my very walkable european neighbourhood I
| don't see any vending machines either (except on the
| train stations, in waiting rooms, etc). Granted, there
| are small shops every corner, so vending machines don't
| feel necessary, but sometimes it would be useful to have
| some.
| wongarsu wrote:
| In Germany a lot of vending machines have appeared over
| the last ~10 years, and there are a lot more popping up
| all the time. And not just in the big cities. Nowhere as
| many as in Japan, but for example in my area there's a
| farmer selling fresh eggs in a vending machine, a meat
| packaging plant selling meat and sausages, an ice
| cream/frozen yoghurt vending machine (some local Ben &
| Jerry's competitor), a bunch of vending machines for CBD
| stuff, a pizza vending machine at the local university
| (it makes hot pizza), multiple old shops in pedestrian
| areas converted to house 5-10 vending machines, etc.
|
| Especially the model of renting shops to fill them with
| vending machines seems to be getting popular. They
| regularly get into fights with the city whether they have
| to obey the legally allowed opening times for stores or
| can be open 24/7. That and farm shops putting up vending
| machines.
| potato3732842 wrote:
| I get that you want to cram your pet issue into
| everything but that doesn't explain the dearth of product
| variety in places in places in the US where vending
| machines are located or the general rarity of them in
| walkable places in the US.
| edm0nd wrote:
| >but the most obvious one is that Japan is eminently
| walkable, while the US is so pedestrian-unfriendly
|
| Japan is also extremely tiny compared to the US.
|
| Japan is also something like ~70% mountainous where
| things cant even be built.
|
| It also helps a lot with planning/building if parts of
| your country were bombed into oblivion and gave you a
| chance to rebuild and rethink everything from the ground
| up.
| pezezin wrote:
| > It also helps a lot with planning/building if parts of
| your country were bombed into oblivion and gave you a
| chance to rebuild and rethink everything from the ground
| up.
|
| Hahaha, now this is a good joke. Japanese cities are
| notoriously chaotic and urban planning is almost non-
| existant; my guess is that they didn't rethink anything,
| they just rebuilt everything in a hurry, and afterwards,
| shoganai.
| pezezin wrote:
| > but the most obvious one is that Japan is eminently
| walkable
|
| Big cities like Tokyo or Osaka are walkable; outside of
| them, Japan quickly devolves into very pedestrian-
| unfriendly urban sprawl (I know because I live in one
| such place). But somehow you still find plenty of vending
| machines everywhere, even besides a road in an otherwise
| empty field.
| vel0city wrote:
| I'd love it if the local city park near me had some neat
| vending machines near the bathroom pavilions. How relaxing
| it would be to get hot ramen and a tea from the vending
| machine while watching the swans and ducks migrate through.
| Instead I just have to make sure I tote all the family's
| snacks and refreshments when we go to the playground.
| Almondsetat wrote:
| >Then why are there so few? And containing such a small
| variety of goods?
|
| Because if there are only a few with only few options you
| can charge the brands a lot more for the privilege of being
| available in your machine
| mmsc wrote:
| Because in the USA, they're seen as target practise. Good
| luck leaving an (expensive) pinball machine in a Manhattan
| subway for 72-hours.
| nostromo wrote:
| Crime and theft is why.
|
| Japan has a whole host of nice things we can't have in the
| US because we let bad actors run wild.
| bluGill wrote:
| Because they sign an exclusive contract with either coke or
| pepsi and take what you get. the owns of the venue don't
| care about customers just that contract.
| monero-xmr wrote:
| Or you put it out and a week later someone has bashed it to
| pieces with a baseball bat
| andai wrote:
| What cultural difference causes this?
| ThrowawayTestr wrote:
| Low trust vs high trust society
| bbarn wrote:
| I have a non-technical friend that runs a vending machine
| business. He targets exclusively small locations like gas
| stations, bodegas, etc. He makes a great living, but he's
| also started farming out filling and collection to employees
| now because it's a lot of driving and work to do it.
| 0cf8612b2e1e wrote:
| That makes no sense to me. Why would a gas station or
| bodega invite an automated competitor onto their property?
| Unless the vending machines offer some merchandise the
| store is unable/unwilling to carry?
| bbarn wrote:
| Because they make money on low price candy, like gumball
| machines and other quarter operated stuff that kids
| impulse buy with their parents money.
| bluehatbrit wrote:
| They're renting out the space or making a royalty from
| the sales. So it's not really competing with them, it's a
| way to make money with absolutely no maintenance or stock
| management. It'll be less profitable for them, but the
| rock bottom overhead makes it worth it.
| bongodongobob wrote:
| Even if not the literal Mafia, there are companies that will
| get violent over territory. I used to work with a guy who had
| an arcade game side business in the 90s and would lease or
| whatever to bars. Starting out, he didn't know about the
| territories and put some machines where they shouldn't be. The
| group that "owned " the territory found out he was putting
| machines in their turf and started vandalizing his machines and
| warned him to pull out or they were going to vandalize him. He
| ended up slowly selling off his machines because the
| competition and craziness of it all was too much to deal with.
| jcrawfordor wrote:
| It is a rather interesting question if organized crime got into
| the payphone business. Not that I know of, and something that I
| didn't get into (because it's kind of a tangled patchwork and
| not really that relevant) is that states do generally regulate
| PSPs, although that regulatory scheme is often very lax. Still,
| it might deter organized crime that in most cases they would
| have to register with the state as a PSP and file reports.
|
| Of course, I know that some places imposed similar regulatory
| regimes around vending machines and other coin-op businesses,
| in part because of issues with fraud and crime.
| lencastre wrote:
| What's triangular shaped, 3D, and rhymes with Eeramid Scheme.
| hyperhopper wrote:
| Not a Pyramid scheme, that's for sure because that's a concept,
| which means it's not 3D.
| ndarray wrote:
| The world is 3D and instances of pyramid schemes exist in the
| world, making them 3D.
| nsbshssh wrote:
| Pyramids and get rich quick courses beat Ponzis in that you can
| blame the sucker. "You didn't work hard enough, what can I
| say?"
| Hackbraten wrote:
| > Ah, but people with turnkey, profitable businesses don't tend
| to sell them.
|
| > Something is up.
|
| Who would have thought?
| jbaczuk wrote:
| I had a viceral "oh no, did I just install a virus" feeling when
| I visited that website, haha. I guess those memories die hard.
| warner25 wrote:
| I wanted to share one of his pieces with a friend, so I sent
| the URL in a text message, and my friend (a network technician)
| responded with "Uh, is that link safe?" The title of the piece
| was "Free Public WiFi" which makes it look even more
| suspicious, haha... https://computer.rip/2023-07-29-Free-
| Public-WiFi.html
| syndicatedjelly wrote:
| That tiled background is from this gem of a video, starting at
| 4:50
|
| https://youtu.be/tc4ROCJYbm0?si=Q2OpRvvjebTPrV-p&t=290
| nsbshssh wrote:
| That is a gem!
| btilly wrote:
| Ah. Passive income. It can indeed work out for you, but it is the
| fact that it can work out that makes it so tempting for scammers.
|
| Warren Buffett claims that the best business that he was ever in
| was installing pinball machines in barber shops, then splitting
| the revenue with the barbers. See
| https://www.cnbc.com/2018/06/19/warren-buffett-bought-a-25-p...
| for verification.
| cies wrote:
| Buffett lies. He had much better investments. I likes to tell
| us all stories. The big-finance reality is much more inside-
| tradingish than he wants us all to believe.
| wsatb wrote:
| Best doesn't need to mean best investment. Best could simply
| mean what he enjoyed most. He likely thinks fondly of a
| simpler time.
| Der_Einzige wrote:
| For just a tiny example of the "big-finance reality is much
| more inside-tradingish", see:
| https://en.wikipedia.org/wiki/Expert_network
|
| Expert networks are an example of a side-gig which would
| compete with traditional "passive income" stuff for talanted
| tech folks.
| btilly wrote:
| What investments do you think were better?
|
| He's had far more income from other investments. But he
| turned $25 into $2000 in 3 years. That's around 331% profit
| per year, compounding annually. Given that he likes to invest
| in relatively mature companies, I can easily believe that no
| other investment ever showed a greater annualized return.
|
| (Of course this calculation discounts his personal investment
| of time to run the business.)
| 0cf8612b2e1e wrote:
| I assume he has to invest in established companies just as
| a practical matter. If you have $50k, you can put it
| anywhere from the local donut shop to Apple. If you want to
| invest $50 billion, your options are significantly more
| limited on what you can do without outright owning the
| target company.
| nsbshssh wrote:
| I turned $0 into $100k this year. Infinite return if you
| exclude personal effort.
| jgalt212 wrote:
| He makes all his money from leverage. But instead of
| borrowing from banks or the capital markets whose willingness
| to roll over debts can be fickle, he borrows via the premia
| his insurance companies collect.
|
| Away from this passive income has a terrible tax profile--
| unless you employ leverage (see above).
| cryptozeus wrote:
| Slight off topic self rant: I tried this (dropshipping etc), went
| against all the good wisdom and rules of creating honest and
| passionate business. Failed miserably. Funny how brain works, I
| knew in 3 months that this is not honest, it feels spammy but
| then orders were coming in so I convinced myself that half the
| amazon products are doing the same thing. There is market for it
| then why should I not do this. This nagging voice in my head
| never went away and I paid for this later on. This matters when
| you have to work through night to get the marketing campaign out
| or you have double down the investment for certain product during
| holiday sale. Dealing with daily email of customers or tracking
| lost orders. I eventually lost energy and any sort of desire to
| grow my business. I was not making the kind of money I was
| promised by the field of dropshipping without adding way more
| money in spamy marketing and I had not passion to sell the
| product I Was selling. Certain folks who seems to be making 1m
| rev per year are also pivoting through spammy products every
| month and just dumping 100s and 1000s of dollars in facebook ads.
| It is more of a spammy marketing game then implementing any sort
| of creative or intellectual skillset. If anyone is thinking of
| doing this then I would encourage or first figure out how
| attached you are to money and the work you are doing. I was
| pulled into this because I thought I am smarter than rest and I
| can crack this because of my skills in technology and design so I
| dont to pay anyone to setup website, taxes, marketing etc however
| I missed out on how much soulless you have to be to run such a
| business. I dont mean soulless as a bad thing here, if you are
| robot or a you can setup a bot to do this then by all means try
| it but I just could not. This had a double impact on my life. Not
| only I failed to make money, wasted time but I also hate myself
| of even getting stuck into this. Lost my confidence and self
| respect which probably was unfounded anyway. Only thing I can
| tell myself is that hopefully this lifted some sort of delusion I
| had about myself and I learn and become better at life through
| this.
| eastbound wrote:
| Sorry for you losing your confidence over this. To be frank,
| the idea itself of creating a company is spammy.
|
| I created my company, but I knew the market from inside (it
| wasn't a public company so it wasn't insider trading, but
| clearly I had unfair advantage at start). I've witnessed many
| people on the same market as I was, trying to find something to
| sell, and failing at it. Everyone here is told that they can do
| it and the good idea will arrive as they work, well, that is
| spam. Truth is there are enough businesses in the world.
|
| It's not exactly just luck. It's also accurately knowing when
| you have a chance. I've also witnessed a dozen startups succeed
| in my area, to the point of about $50m revenue, so I could also
| have succeeded better.
|
| But really, it wasn't your skills or your confidence. It's that
| you didn't have a good edge at start, maybe your only flaw is
| not judging against your initial idea, early enough, and
| waiting for the next opportunity in your professional life. But
| your implementation skills are visibly excellent, so if you
| don't feel like restarting on your own, go help someone and
| help him scale. You'll be excellent at it.
| cryptozeus wrote:
| That is a great reframing! Thanks for saying this. This is
| what I am planing to do next, implement all these skills for
| meaningful business and help them grow.
| SoftTalker wrote:
| The lesson here is that there really is no free lunch. There is
| no secret, no-work way to make lots of money. If anyone can do
| it, there's little value in it so you won't make much money.
|
| If you have thousands of dollars to invest and want to do no
| work, just buy index funds.
| cryptozeus wrote:
| Very true, I did exactly this.
| WalterBright wrote:
| There are ways to make lots of money with no work and little
| investment. An example is buying lottery tickets.
|
| The problem, though, is the risk goes up with the potential
| reward. Your chances of winning the lottery are
| indistinguishable from zero. But it's still there.
| ChrisMarshallNY wrote:
| When I was a kid, we stole a payphone.
|
| Those bastards are _tough_. We whacked on it for an hour, with a
| 15-lb sledgehammer.
|
| When it finally broke open, it yielded about $1.50.
| WalterBright wrote:
| I once had a storage unit, and lost the key to the padlock. The
| manager said no problem, and we went to the unit. He pulled out
| a battery operated angle grinder, and cut through the hasp in a
| few seconds.
| warner25 wrote:
| This reminds me of storing equipment and supplies at the
| platoon level in the Army. The Army owns a _huge_ number of
| shipping containers, like they 're pervasive on any Army
| base, just part of the landscape. Basically every platoon
| keeps most of its stuff in these containers instead of proper
| buildings (minus weapons and ammunition, unless deployed
| somewhere, and then the shipping containers become arms rooms
| too). It also just makes it easier to deploy all the stuff,
| because it's already loaded up to go. Anyway, they're all
| "secured" with padlocks. Because of personnel turnover and
| poor bookkeeping, the right keys always seemed to be missing,
| so every platoon also had a set of bolt cutters. The padlocks
| were _constantly_ being chopped off whenever people needed to
| look for things, conduct an inventory, etc. and then replaced
| with new padlocks. Taking a step back, it was crazy and didn
| 't instill much confidence.
| Izkata wrote:
| Back during college, we found an abandoned one in a massive
| pile of junk in the basement of one of the research buildings.
| It was already opened up, but out of curiosity we poked around
| how it worked, and ended up fabricating a key to open the
| change drawer - it was just a cross shape, nothing special that
| even looked key-like.
|
| Nowadays you can just buy them on Amazon.
| damir wrote:
| I need tl;dr version here... :)
| andrewla wrote:
| The concept of "passive income" is almost a scissor concept. Or
| maybe only if you couple it with the categorical imperitive.
|
| On the one hand, it's so obviously true that it would be great to
| have passive income. Draw the salary you're drawing now, with
| some growth, and not have to work.
|
| On the other hand, if everyone had access to this capability then
| society and civilization would grind to a halt. People make
| things; if people don't make things, then we don't eat, we don't
| drink. If the goal is to have a system where everyone can have
| passive income, then achieving that goal is the end of the world.
|
| The categorical imperative roughly says that something is moral
| only if its universal adoption would benefit society. So there is
| a break there. The idea of passive income is isomorphic to rent
| seeking, which we generally agree is a bad thing.
| notatoad wrote:
| "passive income", in it's original iteration, wasn't the idea
| that you could make money by doing nothing. The idea was that
| you made something or did something that you were uniquely able
| to make or do, and then the result of your labour would make
| money for you while you put in minimal continued effort.
|
| the version of passive income where you don't do anything
| productive at all, ever, and just put up some initial capital
| in exchange for even more money back, is always a scam. some
| people might come out ahead sometimes, but more people will
| lose than win.
| andai wrote:
| >just put up some initial capital in exchange for even more
| money back
|
| Isn't that how index funds work?
| sam1r wrote:
| Well, not many index funds succeed, in that same
| proportionate rate.
| markus_zhang wrote:
| People believe in index funds because of multi-decades of
| globalization and (in general) cheaper money, which has
| been less and less true since 10 years ago.
|
| Even if you bought some during the 90s, you still need a
| tremendous belief in yourself and the market to hold them
| for 30 years. It's not that easy. I know many people put
| the fund into a retirement fund, but 1) is every body
| consistently doing that for 30 years? and 2) what if the
| market sucks when you retire?
|
| I still think that's not a bad idea, maybe one of the best
| for lay persons.
| philsnow wrote:
| > People believe in index funds because of multi-decades
| of globalization
|
| At some point we're going to reach the heat-death of the
| economy and we'll be "completely globalized", I guess?
| lotsofpulp wrote:
| > what if the market sucks when you retire?
|
| You don't have to liquidate all of your investments on
| your retirement date.
|
| If the market sucks so much for 5+ years and your
| government can't get it pumped back up, you probably have
| a bigger problem than your retirement savings, such as
| food and energy and security shortages.
|
| It would be bold to bet against a government not
| constantly decreasing the purchasing power of its
| currency to prop up asset prices, especially with
| declining proportions of young people. The political
| apparatus will want to maintain old people's position at
| the top of the social hierarchy, and if their purchasing
| power isn't maintained so they can keep buying the fruits
| of others' labor, it means the country is dissolving.
| KK7NIL wrote:
| > If the market sucks so much for 5+ years and your
| government can't get it pumped back up, you probably have
| a bigger problem than your retirement savings, such as
| food and energy and security shortages.
|
| The S&P500 was flat or negative from 2000 to 2012. And
| this isn't unusual.
|
| > It would be bold to bet against a government not
| constantly decreasing the purchasing power of its
| currency to prop up asset prices, especially with
| declining proportions of young people. The political
| apparatus will want to maintain old people's position at
| the top of the social hierarchy, and if their purchasing
| power isn't maintained so they can keep buying the fruits
| of others' labor, it means the country is dissolving.
|
| How does the government decreasing the purchasing power
| help old people?
|
| This is quite the opposite, retirees survive off of a
| fixed income (mainly from welfare and pensions but also
| fixed income investments since they shouldn't risk the
| stock market) and are the most hurt by inflation.
| lotsofpulp wrote:
| > The S&P500 was flat or negative from 2000 to 2012. And
| this isn't unusual.
|
| At its worst, 1999 to 2009, SP500 total annual return was
| only -0.2%, per dqdyj. Thats really good considering the
| upside (which has since been realized), and it shows that
| the government is willing to pull out all the stops if
| the market is down just -0.2%.
|
| > How does the government decreasing the purchasing power
| help old people?
|
| Old people are likelier to have assets and/or fixed
| income from assets (such as defined benefit pension
| funds). The government can also increase Social Security
| benefits quicker than wages in the market. The government
| also can maintain current benefits and reduce them for
| younger people by increasing the retirement age and
| adjusting the "bend points" in the benefit formula.
|
| Of course, the poorest old people won't benefit as much,
| but there's a solid contingent of old people who do have
| at least real estate in their home, if not investments in
| the broader market that are very politically active.
|
| > mainly from welfare and pensions but also fixed income
| investments since they shouldn't risk the stock market)
| and are the most hurt by inflation.
|
| They shouldn't be in fixed income for expenses needed
| beyond 10 years. I'd even be so bullish as to say 5
| years. The demographic changes of the population pyramid
| flattening and turning down just started hitting
| economies in the 2000s. I don't see any other way out for
| governments, so your goal is to tread water, you at least
| want to be invested in whatever the politicians are going
| to backstop (which is evidently not USD or fixed income,
| but rather equities).
| KK7NIL wrote:
| Your average retiree should not hold stocks as they
| usually can't survive a 10+ year drawdown (which, as I
| just showed you, happens a lot more than people think,
| even in the survivor biased S&P500 example). This is why
| target retirement funds transition to safer fixed income
| assets as the target date approaches.
|
| You're also forgetting that inflation doesn't just affect
| assets, it also affects living necessities (and that's
| how it's defined in fact), so it's unclear how this is a
| net gain for asset holders.
|
| TL;DR: Inflation doesn't magically make asset holders
| richer and retirees would be some of the worst affected
| people anyways.
|
| You're wrong on both fronts and your whole idea that the
| stock market is politically propped up by old people
| doesn't pass the sniff test.
| lotsofpulp wrote:
| >You're also forgetting that inflation doesn't just
| affect assets, it also affects living necessities (and
| that's how it's defined in fact), so it's unclear how
| this is a net gain for asset holders.
|
| Because the rate of increase of asset prices is quicker
| than that of other prices, namely labor. Hence the
| griping by young people about wages not keeping up with
| costs over the past many decades.
|
| Again, it's not all old people, but a significant
| proportion are going to be pissed if their 401k show
| declines or even stagnation at this point. You can even
| include soon to be old people here, the 50+ year olds
| that are invested.
| ForHackernews wrote:
| I don't think you need tremendous belief. What else are
| you going to do with your money? I can't think of any
| other proposition that compares with investing in the US
| economy.
|
| https://apollowealth.com/one-chart-120-years-of-the-dow-
| jone...
| williamdclt wrote:
| > what if the market sucks when you retire?
|
| if it's been good (on average) for 30y but then sucks
| when you're about to retire, you still probably
| accumulated a lot of money from these 30y of interest
| hunter2_ wrote:
| I wonder what the longest duration has been, in the
| history of let's just say S&P500 or similar, between [a
| low so bad that people would say "sucks that I'm retiring
| now"] and [the point in time prior to that, where it had
| the same exact value but as an all-time high]. A decade
| maybe? So basically one would conclude that they could've
| begun taking withdrawals a decade ago with the same size
| of retirement account (well, except for all the
| contributions throughout that decade, and except for the
| extra decade of remaining life expectancy, and prevailing
| wisdom to reduce risk as retirement approaches, each
| extremely significant, but the point remains to some
| extent).
| apeescape wrote:
| It's not guaranteed that you get more money back from an
| index fund (unless you've found an arbitrage, but that's a
| corner case). Even the bigger and stabler indexes like the
| S&P500 have their ups and downs, both on a daily level but
| also over longer time spans. The long-term trend has been
| positive for these types of indexes, but remember that past
| performance doesn't guarantee future profits :)
| Ekaros wrote:
| One needs to look at multiple markets like for example
| Japan. Which really points that future growth is not
| guaranteed.
| hifromwork wrote:
| >just put up some initial capital in exchange for even more
| money back, is always a scam. some people might come out
| ahead sometimes, but more people will lose than win.
|
| How so? My all-world index funds are doing pretty well. For
| more risk averse, almost every buyer of USA governmental
| bonds gets "even more money back" in exchange for the initial
| capital. I don't think that's a scam either.
| shnock wrote:
| Not everyone can buy USA bonds. Is the population of
| winners and losers all humanity?
| rlayton2 wrote:
| There is a risk, however small, that your bonds won't be
| paid back leading to a large loss.
| khuey wrote:
| > For more risk averse, almost every buyer of USA
| governmental bonds gets "even more money back" in exchange
| for the initial capital.
|
| In nominal terms, sure. In real terms, ask the banks that
| bought 30 year treasuries in Spring 2020 how that's going
| for them.
| schmidtleonard wrote:
| Every time you pay a profit margin, or pay taxes that cover
| bond interest, or pay inflated asset prices (real estate),
| you put money into the system. Every time your stocks,
| bonds, and real estate holdings go up, you receive money
| from the system. How good of a deal this is depends on how
| rich you are and how good you are at picking assets. And
| your luck at timing, of course.
|
| The Fundamental Theorem of Capitalism -- on expectation,
| rich people get paid for being rich in proportion to how
| rich they are and how good they are at capital allocation
| -- is both great and terrible.
|
| It's great in that it gets you skin-in-the-game capital
| allocation decisions. Everyone gains 50 IQ points when they
| have skin in the game and capitalism is how you leverage
| that to run a society. It's terrible in that it does tend
| to establish, reinforce, and perpetuate a class hierarchy
| where the people on the bottom must constantly pay to exist
| while the people on top constantly get paid to exist. It's
| great in that it maximizes the money available to
| accountably chase exciting new prospects. It's terrible in
| that it creates extraordinary incentives to enshrine old
| prospects whose time should have passed long ago. It's
| great in that it can democratize wealth and power away from
| a King or Party, but it's terrible in that it tends to
| concentrate wealth and power around the Wealthy. It's great
| in that damage of capital misallocation can generally be
| contained to the balance sheets of those most capable of
| bearing it, but it's terrible in that the wealthy and
| powerful have the means, motive, and opportunity to bend
| the entire system towards bailouts, monopolies, and asset-
| pumping.
|
| It sucks, except for everything else we have tried. Shrug.
| xmprt wrote:
| It's not a scam for you but rather a scam for society at
| large. Making money purely by owning some revenue
| generating asset, while not providing any service yourself
| is doesn't work if every single person does it. Many people
| who work at companies on the S&P500 aren't paid enough to
| having savings to invest. The money the company saves on
| employee salaries are shown as profits which result in the
| "passive income" that you're making.
|
| I don't 100% agree with the logic because it doesn't
| account for improvements in productivity but I think it
| roughly translates especially in some late stage capitalism
| cases where company profits grow despite lower productivity
| (eg. layoffs).
| bulletsvshumans wrote:
| Perhaps those who aren't the investors benefit by being
| invested in, indirectly. They are benefitting from a
| government running on money from bonds, and possibly
| employed by a business fueled by some form of debt.
| markus_zhang wrote:
| Yeah, nowadays "passive income" is basically debt interests
| (like bonds) or rental income, both of which actually need a
| lot of work.
|
| I rarely traded financial instruments so cannot say for that,
| but as a small landlord I wish I never entered the business.
| Like, all businesses need initial investment AND a lot of
| continuous effort and learning, and are probably boring (or
| VERY barricaded) because otherwise people are going to swarm
| in. I need to know the market, the laws and regulations, and
| some other stuffs, most of which are extremely boring and not
| really "hackable" (as for hackers) because accountants and
| governments already sorted everything up to make sure it's
| hard for small businesses to evade tax -- You can learn which
| parts are expenses in an afternoon, and then you have to deal
| with a lot of headaches.
|
| I know some people who own gas stations and large depanneurs
| (in QC they are independent convenient shops), which are
| luxurious on face, but they either have to pick a remote one
| (away from competition from supermarkets) or/and work 7 days
| without hiring an extra hand. They grind for 10 years and
| sell the business when time is good.
| SirMaster wrote:
| Rental income doesn't need any work if you are just an
| investor though.
|
| I don't do a single thing. The people who are managing the
| deal are the ones who do the work and hire the workers to
| work on site and such. They of course get an even better
| return during the sale, but I am happy with what I get for
| doing nothing.
|
| My rental properties are paying me a decent passive income
| of about 6%, and additionally the total investment about
| doubles in roughly 5 years. Also the tax advantages are
| pretty huge with the depreciation and the ability to take
| the money from a sale and put it into a new property with
| no tax.
|
| So say you start with an initial $100K investment. That
| pays back about 6K a year for 5 years and then turns into
| about 200K after 5 years which you then put into a new
| property and make 12K a year, and so on and so on.
|
| So if you start with 100K when you are say 25, then when
| you are 50, you will have around 1.6M in property assets
| making you about 96K a year in passive income, where the
| depreciation on the property value and the assets in the
| property outweigh the tax on the income, so that income is
| all tax free. And that calculation is assuming you don't
| put even more capital in from some other source. Of course
| it's a roughly average return assumption. Some properties
| will do better and others will do worse, but it's been my
| experience that it's about right.
|
| Of course this is only one of my investment baskets. I
| allocate roughly half of the income that I can invest into
| real-estate like this and the other half into low cost
| index funds.
| __turbobrew__ wrote:
| > and additionally the total investment about doubles in
| roughly 5 years
|
| That is a big assumption. What happens during the next
| real estate bust and your real estate value goes down to
| 1/4 of its prior worth? You are now set back 10 years.
|
| I think residential real estate is a bad bet long term.
| As real estate gets more expensive and more and more
| young people cannot afford to buy there is going to be
| more political capital to change the situation. You are
| basically betting that the next generations are going to
| be fine with being priced out.
|
| I don't believe we have seen the full repercussions of
| the housing affordability crisis, it hasn't even been
| going on for that long. As gen Z comes to house buying
| age I think there are going to be changes.
| SirMaster wrote:
| They have insurances for downturns built into the cost of
| the deal.
|
| Even if the value of the property doesn't increase as
| much as expected, you are still making a decent amount in
| income from the rent being paid. 6% maybe doesn't sound
| like much, but it's tax free income due to being able to
| deduct from that income the depreciation from the
| property and appliances and such which in my experience
| always is more than enough. It makes it pretty
| competitive with alternatives such as index funds long
| term IMO and again in my experience so far over the last
| 11 years.
|
| The worst case scenario is basically you hold onto that
| property longer and make about nothing on the sale which
| is more than can be said about the stock market in my
| experience. At least you still have what you made
| passively in the meantime.
|
| Sure, I can't predict the farther future, but I still
| make decisions to continue this or change my holdings
| based on policy changes like that.
|
| I'm not claiming this is some magic get rich quick
| scheme, but so far it has been working out well and
| definitely has given me income without me doing anything,
| which fits the definition of passive income here, so I
| just thought I'd share it.
| lotsofpulp wrote:
| Real estate is special because of multiple federal
| government and state government policies limiting
| (subsidizing) borrowers' risk, allowing borrowers to
| lever without commensurate increases in risk.
|
| The federal government taxpayers (especially future ones)
| provide enormous subsidies in the way of 30 year fixed
| rate loans with no prepayment penalty, and no risk of
| having the loan be called. Many state governments make
| home mortgages non recourse as well. And then there's the
| federal 1031 tax exchange benefit. And there are
| county/state limits on property tax increases, like
| California's famous prop 13.
| immibis wrote:
| I see betting on residential real estate as a bet that
| power structures have ossified and the CURRENT (not
| future - that was 20 years ago!) generation will not be
| able to gain any significant power.
| stonemetal12 wrote:
| The rule of 72 suggest 6% doubles in 12 years not 5.
| Meaning you have ~400K at 50 making 24 grand a year.
| m463 wrote:
| I think "passive income" is ambiguous, and people will sell
| it one way, and buy it another.
|
| wikipedia seems to have a broad definition of it.
|
| https://en.wikipedia.org/wiki/Passive_income
|
| I see people saying passive income is not always hands off.
|
| I wonder if they are right or the "hands off" definition
| doesn't fit their situation.
| nerdponx wrote:
| > put up some initial capital in exchange for even more money
| back
|
| The "even more money back" part is, in principle,
| compensation for you gathering the capital together and
| taking on the risk of losing. Not that it works out that way
| in practice.
| miki123211 wrote:
| > the version of passive income where you don't do anything
| productive at all, ever, and just put up some initial capital
| in exchange for even more money back, is always a scam
|
| No, that's just investing.
|
| This is how savings accounts work, this is how CDs work, this
| is how treasury bonds work, this is how passive investing
| (e.g. via ETFs on index funds) works, and there are many,
| many more examples.
|
| If you're keeping your retirement savings in an IRA / other
| local equivalent, whether owned privately or by your
| government, the same processes happen behind the scenes.
|
| You put in capital, you lock that capital away for a while,
| you get back more capital later.
|
| The differences here are in terms of possible returns. Bonds
| have (relatively) low returns but almost 0 risk, index funds
| have significantly higher returns but are also higher risk,
| though it's still pretty low if your time horizon is multiple
| decades, and there are crazy investments (think Bitcoin) with
| possibly eye-watering returns, but also an enormous amount of
| risk.
|
| Now investments with "guaranteed" eye-watering returns (think
| >10% per year) and apparently 0 risk? Yeah, definitely a
| scam.
| immibis wrote:
| If everyone does it, the world grinds to a halt and
| everyone dies.
| simmerup wrote:
| Well, everyone can't do it because not everyone has
| access to capital
| georgeecollins wrote:
| What really happens: if everyone tries to acquire a
| particular income producing asset, the asset gets so
| expensive that the return is not worth the risk plus the
| time value of the money it could generate. Stocks in the
| 1920's, Tokyo real estate in the 1990s, US housing the
| mid 2000's...
| jayd16 wrote:
| > more people will lose than win.
|
| It's not necessarily zero sum. If money is invested to
| produce value instead of simply moving it around then
| everyone can benefit.
| schmidtleonard wrote:
| Yes, though it's important to note that the economic notion
| of value is weighted according to wealth and therefore more
| than a bit weird. Feeding an orphan creates no "value"
| because they have no money to pay you with, while merging
| companies into a mega-monopoly that can shake down the rest
| of the economy creates loads of "value" because it pays
| rich investors huge dividends. Of course, there are plenty
| of honest ways to create value and get paid for it, and
| that's pretty cool. Both extremes exist, most things are in
| the messy middle, and reasonable minds can differ about
| which way the system leans and what should be done about
| it, if anything.
|
| Another piece of important context is that the US is a
| developed economy, not a growth economy. If the pie is
| growing at 2% and the capital slice of the pie is growing
| at 10%, anyone who lives in the remainder and argues that
| their slice is being grown is a fool.
| Aeolun wrote:
| > Feeding an orphan creates no "value" because they have
| no money to pay you with
|
| Only because it's illegal to make them work? I imagine it
| could be quite lucrative.
| kmeisthax wrote:
| The original iteration of passive income was feudalism. It
| itself was a set of interconnecting passive income
| schemes[0], ultimately derived from your ability to own the
| most economically valuable land. This scheme hinges upon your
| ability to enclose and exclude access to that land by force -
| _not_ prior labor paying off over time.
|
| Of course, the only passive income schemes that work today
| are the "prior labor" type. But that's because of copyright
| and patent law, which exist specifically with the idea that
| you can make something valuable now and charge the public for
| it later. A creative work or an invention is itself land
| being excluded by force, but this is a magical abstract land
| of nearly infinite size[1]. It's enclosers are empowered not
| through direct force, but through the blessing of a legal
| priesthood.
|
| Ok, I suppose if we're including force and feudalism, we
| probably should also include, say, organized crime. But in
| that case the labor isn't stored, it's slaved: you find
| suckers and scam them into doing crimes to your benefit, then
| get them to continue working for you, because if they ever
| leave you can just kill them, or sick the Feds on them.
|
| Y'know, I'm starting to think passive income is actually just
| a funny way to say theft...
|
| [0] The two schemes I'm thinking of are manorialism, and
| something akin to modern rent extraction or "chokepoint
| capitalism" in which you own a road or river and can charge
| money to people passing through your land. I forget the name
| of the latter, and there's probably additional relationships
| I'm not counting. I know the Holy Roman Empire was lousy with
| the latter kind.
|
| [1] Since there's far more of this creativity land than there
| is land on Earth, it's far harder to find land that people
| want or have to pay for. That's why entertainment is such a
| ridiculously hit-driven business and why entertainment
| companies hate rights reversion so much.
| the_sleaze_ wrote:
| With respect, I think you have it entirely backwards.
|
| (First, "passive income" means "almost hands off, but not
| entirely")
|
| Progress in technology is making things - better quality, less
| effort. Amazon Warehouses for example. Just a few years ago
| they took at least a few dozen people in rotation, now takes a
| man and a dog - the man to feed the dog and the dog to bite the
| man if he falls asleep.
|
| Since so much can be done with so little effort it seems
| natural that if wealth doesn't concentrate at the top then most
| people would have essentially passive income streams.
| andai wrote:
| >If the goal is to have a system where everyone can have
| passive income, then achieving that goal is the end of the
| world.
|
| If AI and robotics continue to be developed, then eventually
| most human labor becomes uneconomical by comparison. At that
| point, the system provides passive income on a mass scale (UBI)
| to prevent its own violent destruction. At least, that's the
| good ending.
| ElFitz wrote:
| To me, a major obstacle on the path to UBI is that it seems
| to conflict with the interests of those who benefit from the
| current status quo.
|
| If everyone receives a sufficient basic income, who will fix
| their toilets or clean their yachts?
|
| If the answer is 'no one', then I'm afraid we'll need
| significant advances in automation and robotics--or
| pitchforks--before we see UBI implemented.
|
| But my point of view may be simplistic, and wrong.
| ryandrake wrote:
| Technology is quickly helping to eliminate the "pitchfork"
| option. By the time we are in a world where human labor is
| unnecessary or worth nearly nothing, the elite will have
| all the automated surveillance and robo-policing technology
| they need to prevent rioting and pitchforks, and more
| secure ways to remain safely isolated from the rabble. When
| it comes to "what Sci-Fi future we're headed towards" I
| would bet on something like Elysium.
| thrance wrote:
| My good ending would be to redistribute equitably the wealth
| generated by the machines labor, and maybe even abolish
| currency, once (if) we reach such a point.
| seizethecheese wrote:
| > The categorical imperative roughly says that something is
| moral only if its universal adoption would benefit society.
|
| Really? I actually don't think that's right at all. For
| example: nobody should be a philosopher, because if I everyone
| were, society would collapse. Surely, Kant did not believe
| that.
|
| My understanding is that the categorical imperative is more
| like: it's only moral if you would accept a random roll of the
| dice into any of society's roles. In this case, I'm not sure
| society would be better off if passive income did not exist,
| but perhaps it should be "earned" passive income, in the
| entrepreneurial sense, rather than just pure rents for high
| status people.
| pge wrote:
| Your definition is much closer to Rawls's vision of a just
| society and the "veil of ignorance." While heavily influenced
| by Kant, Rawls comes much later. Kant's Categorical
| Imperative was an attempt to define moral laws (without
| resorting to a deity). The article has it right, though I
| might change the wording slightly to say that a "rule" or
| "law" that I use to guide my behavior is only moral if its
| universal adoption would make the world better. Choosing to
| be a philosopher is not a rule. Something like, "I should
| never lie" is a rule which one could evaluate with Kant's
| approach, by asking whether if everyone followed that rule,
| society be better off or not.
| immibis wrote:
| A rule can also be: "people who enjoy philosophy and are
| good at philosophy should become philosophers"
| thrance wrote:
| Kant's moral system is by no means perfect. His own
| definition is: "Act only according to that maxim whereby you
| can at the same time will that it should become a universal
| law."
|
| Obviously we'd all starve to death if everyone became full
| time philosophers, but wouldn't the world be a better place
| if everyone took some time to ponder the big questions?
| nyc_data_geek1 wrote:
| Passive income for all is post scarcity, luxury space
| communism, ala Star Trek.
| tomcar288 wrote:
| that might be true for completely passive income.
|
| but, how about growing a fruit tree. An apple tree for example
| can produce 200 lbs of apples per year about 500$ a year and
| all you have to do is pick them off the tree and water them if
| you don't get enough rain.
| Terr_ wrote:
| > is almost a scissor concept
|
| I was curious but can't seem to find much on that phrase except
| as a player-movement tactic in US Football.
|
| Perhaps autocorrect-gone-wrong from something else?
| QuadmasterXLII wrote:
| It comes from this short story:
| https://slatestarcodex.com/2018/10/30/sort-by-controversial/
|
| Basically, a scissor statement is a series of words optimized
| to split a group of people along a novel faultline, and then
| make them fight.
| jayd16 wrote:
| I don't think passive income requires the abolishment of non-
| passive reward structures.
|
| You'll never hit a point where people will starve before
| working even if they're pulling in some amount of presumably
| useless currency. It's hard for me to imagine a scenario you're
| talking about.
| parsimo2010 wrote:
| there are two broad categories of "passive income" that people
| often talk about, with differing effects on society.
|
| 1. You have a product that takes little effort for you to
| maintain, but people find it valuable and pay for its use. In
| HN terms, this might be a small software project that can be
| maintained with just a couple hours each month. This is not bad
| for society- you are offering something that people find
| valuable, and you get lucky because it's easy for you! A key
| point is that you are not exploiting people to make this
| income. We all have varying skills and we make gains from
| trade. If you are good at programming and I am not, I can pay
| you to do something that is easy for you but would have been
| hard for me. This is how we increase our productivity as a
| society- let each person focus on the things they are good at
| and avoid the things that are hard. So this type of passive
| income is okay. We'll probably never see a society where every
| need is met through people's low effort projects (nobody has a
| side project that builds major roads or infrastructure), but
| you aren't harming society by doing it.
|
| 2. You have a product that you charge for and you add no value,
| but for some reason people have to buy from you. In economic
| terms, we are talking about rent-seeking. Imagine if, right
| before a hurricane came through, you bought every single 2x4
| from all the Home Depots and Lowes' stores in the local area,
| and sold them to people at twice the original price trying to
| repair their houses after the hurricane. You did not improve
| the value of the 2x4s and if not for you, people could have
| bought them for less money. You exploited the limited local
| supply of 2x4s and added nothing, but extracted money from
| people who had no other choice. This is bad for society.
|
| https://en.wikipedia.org/wiki/Rent-seeking
| thrance wrote:
| It's funny how often you hear "put your money to work". Money
| doesn't work, people do! If you receive a monthly income by
| doing nothing, you're taking from someone else's work.
| sokoloff wrote:
| While technically true, this could still be a great trade for
| all involved.
|
| If you invest in shares in a company, you are a link in the
| chain to that company existing at all, employing people,
| serving customers, and paying a dividend to shareholders.
| Employees have a job and income without the need to come up
| with the initial capital to start the venture and the
| associated risk of no income for a while.
|
| If you invest in real estate, you are providing the capital
| that allows someone to have shelter (and maybe allowing a
| property management firm to also employ people). Tenants have
| shelter without the need to buy an entire lifetime of a house
| that they only want to live in for a few years and without
| the hassles of being tied down to a specific address (in the
| event their relationship status or family size evolves or a
| job improvement arrives 50 or 200 miles away) or buying and
| selling houses frequently as these changes tend to happen
| frequently early in adult life.
|
| Neither is something that you had to wipe sweat off your brow
| this particular month, but it is a deployment of foregone
| consumption in the past that allowed you to make those
| investments. Now that previously foregone consumption is
| being returned to you.
| spacebanana7 wrote:
| Another tangible example is renting a tractor to a farmer
| that couldn't otherwise afford one. Their income from crop
| production goes up (even after tractor rental expenses) and
| society also gets more food.
| user90131313 wrote:
| When market crashes (march 2020) they created trillions in
| debt. Who works for that amount? They literally gave away
| some small part of it. Try to learn how debt based MMT works.
| tgv wrote:
| I think the categorical imperative stops you from harming
| others, but not from profiting. It is based on free will, after
| all, so it's not against the individual per se.
|
| But to continue your other line of reasoning: there's always
| someone who profits, and obviously not everybody can profit.
| There is always a difference. Therefor it cannot be immoral,
| because it is unavoidable. It is however right to strive for
| minimal consequences of this difference (in wealth).
| moffkalast wrote:
| That's only true if things like you know, automation, don't
| exist.
|
| The payphone example isn't that bad honestly. What people are
| paying for is sending around information. You could pay a
| person to run around and tell it in person, or you could build
| a network of telephones and charge for their usage. The latter
| is faster, easier, cheaper, more convenient, and doesn't take
| any people to run despite being a major boon to society. Yet
| it's completely passive outside occasional maintenance.
|
| I suppose the question is if it's ethically correct to pay the
| maintainer vastly more than it actually takes to maintain the
| public good just because they "own" it. At least currently in
| our society it seems we've collectively decided it's worth
| overpaying for the benefit since the rewards tend to be good
| enough (otherwise everything would be nationalized).
| imgabe wrote:
| > If the goal is to have a system where everyone can have
| passive income, then achieving that goal is the end of the
| world.
|
| Not if we build robots to make things.
| derf_ wrote:
| _> On the other hand, if everyone had access to this capability
| then society and civilization would grind to a halt._
|
| On the contrary, everyone _does_ use this capability. It is
| what makes the concept of "retirement" possible.
|
| You borrow money when you are young and do not have much of
| value to contribute to society (for education, for purchasing a
| home, maybe for starting other ventures), you earn money during
| your productive years to pay those loans back and accumulate
| wealth (in personal or government retirement accounts, in
| Social Security or other government plans, in a pension), and
| at some point you are able to invest or lend or that money to
| others (or have others do so for you in the case of things like
| pension funds) and live off of the return, hopefully before you
| become so infirm you are no longer able to work.
|
| I hope we can agree that allowing people to retire before they
| die is a net benefit to society. Claiming anyone can do that
| while they are still young with no risk is where you should
| start to get suspicious. Why should it be easy to get rich?
| vaidhy wrote:
| I think we are use passive income to mean different things. One
| of the meanings I tend to use it is capital preservation. I have
| worked and created savings for $x. What can do so that I do not
| lose that money and make it work for me? Index funds, 4%
| withdrawal rate, becoming a landlord are all some kind of answer
| to that question.
|
| Another meaning is something like "get rich quick" schemes. There
| is a overlap between the previous one and this, but here the
| focus is on outsized return and not preservation.
|
| A third one that people tend to associate with the term is about
| going from almost nothing to a large something - either by
| "working" the system, people etc or through generous social net.
| The difference is your starting point between this and the
| previous one. The second kind of thing targets people with money
| while this targets a much younger crowd.
|
| After reading through the article, it seems like the author mixes
| up 1 and 2..
| PaulHoule wrote:
| I was a coin phone phreaker in the late 1980s as a teen. I had a
| notebook with phone numbers for hundreds of coin phones and was
| particularly a fan of COCOTs because most of them were poorly
| designed and you could make free calls using tactics like: hit
| the switchhook quickly ten times and complete a call by talking
| to the operator. (I practiced and was good at that)
| bitwize wrote:
| ...Don't ask! https://youtube.com/watch?v=ITfQGEASYvU
| eigenvalue wrote:
| You should basically always be very suspicious when someone is
| trying to sell you a way to earn very attractive returns without
| a lot of risk or without time and effort intensive management.
| There is a lot of capital out there in the world looking for a
| return. If the returns really were so attractive on a risk-
| adjusted basis, and you could deploy a fair amount of capital
| without building a large organization and incurring a bunch of
| fixed operating expenses, why wouldn't someone who is a proven
| successful operator in that field just raise more capital
| themselves and keep more of the profits?
|
| Even when the propositions look plausible on the surface, there
| is usually some hidden gotcha that prevents it from being
| scalable. For example, the economics only work if you can find a
| really good location that meets a bunch of requirements, and
| there simply aren't that many of those "good" locations left. Or
| it turns out that it requires very intensive management to deal
| with broken equipment, theft, vandalism, etc.
| jonatron wrote:
| In London, we had I-Plus Kiosks, a long forgotten waste of money.
| http://news.bbc.co.uk/1/hi/technology/3058209.stm (2003) and
| http://news.bbc.co.uk/1/hi/sci/tech/1691434.stm (2001) . IIRC,
| the council thought it'd be a good use of taxpayer's money.
___________________________________________________________________
(page generated 2024-10-28 23:00 UTC)