[HN Gopher] Buy payphones and retire
___________________________________________________________________
Buy payphones and retire
Author : cratermoon
Score : 453 points
Date : 2024-10-28 16:33 UTC (1 days 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.
| dleink wrote:
| Most of the things I love aren't done at home. I already
| noted there are passions that can't be performed
| individually.
| 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?
| dleink wrote:
| You have won. Yes, if the thing you love specifically
| requires the collection of capital then of course, you
| will have difficulty finding that outside a corporation.
|
| I suspect with analysis this is not the case for the
| majority of folks.
|
| Hardware is a funny example though, because I feel it's
| easier than ever to get some interesting hardware stuff
| going.
| 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.
| TheRealPomax wrote:
| What made you read that comment and go "they're talking
| about everyone" instead of "oh, yeah, those people _also_
| exist, blanket statements don 't make sense in this
| context"?
| 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.
| anonzzzies wrote:
| Well, if that is the definition, then i'm retired for almost
| 25 years now (I sold my first company at 25). But yeah, I saw
| retiring more as the people I know who retired in the
| traditional sense; 'now finally we can travel!' and that
| turns out to be a rather boring and unfulfilling lifestyle.
| the old (70+) people that are happy and not dead, all work
| fulltime in their own companies. From my barkeeper (he is 75)
| to the owner of a 100m euro/year company that makes roofs who
| is 90 and goes to the factory _every day_.
| 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.
| maxwell wrote:
| Makes sense. Also would probably hit into full occupancy
| pretty quickly. I guess you could use it as a warehouse
| for black market goods or something too though.
| 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.
| toyg wrote:
| This. Once the money is digital, in most cases it has
| already been washed - or it didn't really need to be
| washed in the first place.
| 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.
| somat wrote:
| I have always wondered if some of that audiophile gear is
| to hide transactions of illegal goods.
|
| "If you buy this $600 cable and include the code CC in
| the order we will make sure to ship it with some white
| powdery desiccant packages included to protect the cable"
|
| I mean not all of it, there are enough people with more
| money than brains to keep the legitimate(hah, right. I
| guess as legitimate as these sort of companies get)
| companies around. But sometimes you see a product priced
| so outrageous, you think there has to be something else
| going on.
| 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.
| Semaphor wrote:
| Which city is that? Here in the city center of Lubeck, I
| see none of those. And only one new-ish traditional
| vending machine.
| ido wrote:
| I've lived in Berlin for the last 11 years and have never
| seen the phenomena you describe (I wish I had them in my
| neighbourhood!)
| gorbypark wrote:
| I think it has to do with available space, as other
| commenters have mentioned. Here in Valencia, Spain,
| there's a huge amount of unused "retail" space. Most of
| the city is 5-7 floor apartment buildings with the ground
| floor being designed for retail / parking / etc. There
| are many building, outside of the city center that were
| built years ago with their ground floors sitting empty
| since day 1. Many spots that were occupied at some point
| are sitting empty as well. It's pretty cheap to buy or
| lease a space. Anyways, in the last 5 years or so there
| has been a lot of spots being converted into vending
| machine spots. Basically a small area of retail space, no
| front door or wall, and maybe 4 or more vending machines
| in it. I've noticed sometimes even some cafes are carving
| out a little spot of their frontage to install a few
| machines.
| smatija wrote:
| In Slovenia local farmers started using vending machines
| for homegrown milk, eggs, pig fat and similiar produce.
| While they were very rare just a few years ago, now they
| are very commonplace, even in smaller towns.
| 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.
| HPsquared wrote:
| Vending machine in an empty field just reminds me of
| Japan's low crime rate.
| krageon wrote:
| It's not noticeably low when you're from a nice country.
| It'll be very noticeably low when you're from a nightmare
| place.
| j0hnyl wrote:
| There are few places in the world where things won't be
| taken when left unattended.
| hyperhopper wrote:
| NYC is arguably more walkable than anywhere in Japan
| outside of Tokyo, or in my opinion including Tokyo, but
| it doesn't have 0.1% of the vending machines as suburban
| Japan.
|
| Also, what we would call non walkable suburbs or rural
| areas in Japan have more vending machines than anywhere
| in America as well.
| throwaway743 wrote:
| Being from NYC, I'd prefer not touching a vending machine
| that's most likely got piss all over it.
| csomar wrote:
| Everyone is complicating their answer. The answer is
| simple: In the US, these machines will get cracked and
| the ROI will be negative. Same reason why Amazon Go
| didn't work.
| tonyhart7 wrote:
| I think you overcomplicate stuff, its just boil down to
| the culture
|
| Any technical or laws difficulties is just the "easy"
| part
| rsynnott wrote:
| I assume there's something else going on, as outdoor
| vending machines are not a particularly common sight in
| most walkable cities in Europe, say.
| 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.
| Jach wrote:
| On a roadtrip a few years ago I was struck by the design
| of a row of vending machines at a rest stop: entirely
| walled off / caged off by a solid metal security mesh,
| with small holes to just barely let people operate them.
| Very much like this picture: https://s3-media0.fl.yelpcdn
| .com/bphoto/NudVpPKiq1AsWL1CSAa_... So I agree crime and
| theft is a big factor. But it's not enough of an
| explanation, as other high-trust societies (and even more
| parts of the US not that long ago) don't or didn't
| emulate various Japanese aspects, and even in Japan there
| are various "why do they do things this way" aspects that
| would make most sense in a low-trust or corrupt society.
| Some of them can be traced to being an over-reaction,
| like the lack of public trash cans in Tokyo. Increasingly
| I think the real answer to these "why can't place x have
| this unique thing Japan has?" sorts of questions is
| "because it's not Japan" -- you need the whole collection
| of aspects that only came about via Japan's unique
| history, you can't do it by just capturing a few aspects
| like their low crime state. It's an unhelpful answer, but
| at the same time suggests maybe people should look for
| ways to do something better, not emulative. (As much as I
| find the vending machines everywhere in Japan very cool,
| I don't particularly want them.)
| Dalewyn wrote:
| Here's something to blow your mind: Out in the
| countryside, farmers have stalls where they put some of
| the day's harvest for sale. It's completely unmanned
| without surveillance and operates on the honor system;
| customers leave cash in a nearby container and take the
| produce they bought.
|
| Yes, it works beautifully because there are literally no
| bloody assholes uncivilized enough to be thieves.
|
| Vending machines are abundant for the same reason: There
| simply aren't any assholes fucking uncivilized enough to
| loot or otherwise damage/destroy them. The supremely
| civilized culture of Japan manifests in superb security
| and all the good things that are only possible in such an
| environment.
|
| You leave a vending machine outside somewhere in the
| United States of America? Son, that thing is going to get
| freedom'd faster than the US military goes bombing
| deserts for oil. I say that as an American and yes it is
| fucking shameful, but that is the state of affairs.
|
| As an aside, Japan _really_ likes the warm glow of a
| vending machine at night: Dutifully serving its customers
| without complaining and lighting the way; some of them
| come with features to remember repeat customers and their
| preferences, recommend products based on their
| expressions, and some still might even make small talk.
| Yes, Japan loves vending machines.
| Jach wrote:
| The countryside honor system is still present in certain
| parts of the US (sometimes it's even present in suburban
| neighborhoods!), it doesn't blow my mind. (I also have
| living memory of how good things used to be in various
| places, too.) Similarly, there are still many places
| where a vending machine will remain unmolested. What did
| surprise me once while visiting Tokyo was that in several
| game centers the extra prizes to restock the claw/UFO
| machines are often just stored... on top of the machine
| in a bag or basket. Sure, most Japanese are too short to
| reach and steal them, but foreigners frequent those
| places too, and yet people behave.
|
| My favorite vending machine anecdote comes from HN
| several years ago:
| https://news.ycombinator.com/item?id=15412395 The
| pictures from the submitted post are worth revisiting
| too, if they were put up today people would think they
| were AI generated: https://web.archive.org/web/2017100422
| 2639/http://www.spoon-...
|
| Did you know there's an anime where the main character
| dies and gets reincarnated into a fantasy world as a
| vending machine? https://myanimelist.net/anime/52619/Jido
| u_Hanbaiki_ni_Umarek... I got a handful of episodes in
| while it was airing, I'm now reminded to go back and
| finish the season maybe next month, but it was quite a
| bit more charming and interesting than I gave it credit
| for from the premise. Indeed, there is a lot of love for
| vending machines.
| mauvehaus wrote:
| We have honor box farm stands in the USA too. Not
| counting coolers with eggs alone, there are probably half
| a dozen between our home and my wife's office.
|
| This despite the fact that we have numbskulls and
| halfwits in the area. Last year someone knocked down all
| the mailboxes on the nearest paved road. We also picked
| up an absolutely staggering number of Twisted Tea cans
| from the side of the road last Vermont Green Up Day.
| LightBug1 wrote:
| I've seen that on a trip to New Zealand actually. Was
| quite sweet.
|
| A tent full of strawberry punnets, with a little lockbox
| outside to put money in.
| lazyasciiart wrote:
| You've really never seen unattended farm stands in the
| rural US?
| Foreignborn wrote:
| I'm from very rural USA (population: 32). I've only seen
| farm stands in very isolated towns where people generally
| know each other. A lot near my home town have
| disappeared.
|
| In my experience, I've seen unattended farm stands,
| antique stores, and flea markets even in Tokyo.
| PawgerZ wrote:
| Rural Iowa here. I've seen them in populations as big as
| 30,000 (Mason City, Iowa for example)
| 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.
| zdw wrote:
| Japan also has very flexible zoning for residential and
| commercial uses, so nearly anyone can host a vending
| machine as a commercial enterprise, which would generally
| not be allowed in most other places with different laws.
|
| Also, some of them are insanely thin, like 25cm depth for a
| cold drink machine, so they can fit nearly anywhere with a
| power outlet.
| hyperhopper wrote:
| The vast majority of vending machines in Japan are
| allmost as deep as American counterparts. And even if
| not, maybe we could just have more thin vending machines
| here.
|
| Also the zoning issue is just a very clear policy
| failure. I don't think even the most hardcore NIMBY
| suburbanites would complain about being able to get meat
| and dairy steps from their front door in an automated low
| traffic fashion.
| HPsquared wrote:
| The zoning thing again comes back to high trust. Trust
| that businesses aren't going to screw up the
| neighborhood.
| 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
| Ringz wrote:
| Pure capitalism.
| HideousKojima wrote:
| Damn, never knew the USSR, China, North Korea and other
| places managed to abolish theft!
| krageon wrote:
| Low social cohesion and high individuality. Zero or near-
| zero shame built into people for being pieces of shit
| when they're growing up. It's all very "western".
| 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.
| Brian_K_White wrote:
| A few things:
|
| - the machine pays for it's space through rent or share
| of the take obviously
|
| - think of it more like sharing the custom rather than
| giving away the custom. sharing benefits both parties
| just like in any other cooperative deal. the machines are
| something that some customers are attracted to just like
| the regular shelves
|
| - think of it also like an extra employee for free. A
| very stupid employee that can only do one thing, but it
| can always reliably do that one thing without supervision
| or breaks or pay. Some sales would not have happened
| anyway, but the machine took care of some customers by
| itself, and the shop owner makes less from it, but it
| also cost them less, and the total package of amenities
| presented by the shop is more than without the machines.
|
| Some people actively do not want to deal with a clerk
| even if they are fast and good natured and there is no
| one else in line to make them wait. For that matter, not
| just some people but almost everyone feels like that at
| least once in a while, because every day is not a happy
| day. Come to think of it, in that sense, it's not even
| just about sales but about serving a need that costs more
| or less nothing to serve. Your shop is simply a bit more
| useful for everyone around by including a bit of this
| option.
| HPsquared wrote:
| It depends on the machine and what it sells. Some
| machines might actually draw paying customers to the
| store.
| 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.
| hyperhopper wrote:
| By your logic your comment is red, since it's written in
| words and words can be read.
| ndarray wrote:
| No... it's not that the world "can be" 3D, it's that the
| world entirely IS 3D. You could say that my comments is
| 3D and you'd be right, in many ways, since storage
| mediums as well as pixels are technically 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.
| cies wrote:
| Like i said, he likes to tell us stories.
| 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.
| llm_trw wrote:
| >But he turned $25 into $2000 in 3 years. That's around
| 331% profit per year, compounding annually.
|
| You run out of barbers rather quickly.
| 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).
| bdjsiqoocwk wrote:
| He was obviously joking
|
| > As Buffett told Gates in the Omaha candy shop: "It was the
| best business I was ever in. I peaked very early in my business
| career."
| 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.
| le-mark wrote:
| My investments during the Covid dip attest to this. There
| will always be another dip.
| 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.
| le-mark wrote:
| Other ways are writing a hit song, advertising jingle, a
| bestselling novel, a top selling video game. Ways not to
| get rich; a "better c" language and compiler?
| SoftTalker wrote:
| Those things sound like a lot of work to me. Perhaps
| enjoyable work, but work all the same.
| WalterBright wrote:
| Writing compilers is certainly not a probable path to
| getting rich. I do it for other reasons.
| bdjsiqoocwk wrote:
| > there really is no free
|
| > just buy index funds
|
| Sounds like your contradicting yourself. Sounds like index
| funds are in fact a free lunch.
| andai wrote:
| You need free money first!
| bemmu wrote:
| There may be some, but the people who find them have no
| incentive to tell others.
| 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.
| alexjm wrote:
| I saw one city park where they took this one step farther.
| They had a small wooden structure (I think the cover to a
| water valve, from years ago when they used to set up an ice
| skating rink). The open it so rarely they don't even
| padlock it - they just bend open an S shaped link of chain,
| put that where the lock would go, and bend it shut. When
| someone needs to access it, they cut the one link of chain
| with a pair of bolt cutters, and then put on a new one.
| le-mark wrote:
| The keys oh god the keys. Adding to this the hatches on
| armored vehicles are also padlocked (sincgar radios stayed
| in the vehicle). Keeping track of the keys was always a
| massive pita. A lot of privates did a lot of push ups over
| misplaced keys.
| dctoedt wrote:
| Back in the day, on Navy ships it was a punishable offense
| for anyone to have bolt cutters except for the master-at-
| arms people (the ship's internal police force), because
| everyone used padlocks on their personal lockers and also
| on a lot of gear lockers.
| 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.
| ainiriand wrote:
| Funny story of my youth: When the first payphones with digital
| terminal were introduced, I found that you could access the
| operator menu, that was password protected. For months I
| checked different combinations of those 5 secret numbers at
| different terminals after school, in a sequential order. One
| day I was in.
|
| Inside the operator menu you could check how much money there
| was inside the machine, you could make free calls, but you
| could not take the money out. I never managed to take the money
| out without violence.
|
| So I signed a mobile phone contract that gave you some call
| minutes the more calls you received (it was a hit back then, I
| think from Vodafone), and called myself repeatedly from phone
| to phone.
| 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.
| KK7NIL wrote:
| > Because the rate of increase of asset prices is quicker
| than that of other prices, namely labor.
|
| This totally depends on the asset and is nowhere near as
| straightforward as you make it seem. For example,
| companies who mainly sell to consumers and require
| constant capex will generally be negatively impacted by
| inflation.
|
| Your idea that the government will hold up the stock
| market just doesn't up to historical data. 2020 was the
| big exception (and the most recent in memory, hence why
| you and others are so focused on it) but the inflation
| that caused has lead to economic hardship across the
| board.
|
| I agree with you that there's a political force trying to
| prop up the US stock market, but I'm not sure it's as
| simple as "old people and their 401k's!"
| lotsofpulp wrote:
| 2020 was far from an exception.
|
| https://www.thoughtco.com/government-financial-bailout-
| histo...
|
| Push comes to shove, the only question about whether or
| not a bailout will happen (since there is no technical
| hurdle to issuing more money, just changing numbers in a
| database) is are the parties receiving a bailout
| sufficiently influential.
|
| And I argue that people exposed to SP500, whether it be
| by holding it directly or facing the prospects of higher
| taxes because the government pension fund holding SP500
| is not meeting its returns, are now sufficiently
| influential that it is a given that leaders won't allow
| the broad market to be negative for more than a couple
| years.
|
| 2020 isn't even the most recent one. Here's a multi
| employer pension fund bailout from Mar 2021:
|
| https://www.nytimes.com/2021/03/07/business/dealbook/bail
| out...
|
| As an aside, the irony of this specific bailout is the
| main beneficiary, Teamsters' union, came out in support
| of Trump after Democrats saved them.
| jancsika 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.
|
| Target retirement funds transition to a safer _mix_ of
| bonds and stocks as the target date approaches.
|
| Even VTINX has a conservative mix of 30% stocks.
|
| I'd say if you cannot afford to hold _any_ stocks you 're
| probably not yet ready to retire.
| KK7NIL wrote:
| > Even VTINX has a conservative mix of 30% stocks.
|
| Your average retiree does not live off of VTINX.
|
| > I'd say if you cannot afford to hold any stocks you're
| probably not yet ready to retire.
|
| There's so many variables here that it's really not worth
| discussing. I'll just say that investing in stocks for
| retirement is a pretty recent fascination that is far
| less common outside of the US and in poorer regions in
| the US.
|
| Plenty of American retirees (maybe even a majority) own
| little to no stocks and live on a fixed income, making
| them very vulnerable to inflation (which was the whole
| basis of OP's idea that old people are holding up the
| stock market).
| jancsika wrote:
| > There's so many variables here that it's really not
| worth discussing.
|
| Fair enough. I only want to clarify what you wrote: "the
| average retiree should not hold stocks." To be crystal
| clear:
|
| 1. don't go out and buy individual stocks on a lark (good
| advice)
|
| 2. get all worried because your 401k is a conservative
| mix of mutual funds (hopefully index funds, probably
| managed mutual funds) and bonds (bad advice)
|
| > Plenty of American retirees (maybe even a majority) own
| little to no stocks and live on a fixed income
|
| The logically necessary flip-side is all I'm addressing:
| plenty of American retirees hold stocks in a 401k. To
| them I reiterate: don't fuss around with your target
| retirement fund.
| opo wrote:
| >At its worst, 1999 to 2009, SP500 total annual return
| was only -0.2%, per dqdyj.
|
| That might not be adjusting for inflation. According to
| the calculator on moneychimp, with adjusting for
| inflation, the cagr for the S&P 500 over that time period
| was -3.42%. (i.e. $1.00 shrank to 71 cents if invested in
| S&P 500 Jan 1, 2000 to Dec 31, 2009.
|
| >...and it shows that the government is willing to pull
| out all the stops if the market is down just -0.2%.
|
| I imagine the potential collapse of the financial
| markets, was maybe a more important cause of monetary and
| fiscal policy around that time.
|
| http://www.moneychimp.com/features/market_cagr.htm
| lotsofpulp wrote:
| We don't need to adjust for inflation since we are
| comparing nominal returns across the board.
|
| What other investment options were there from 1999 to
| 2009 that had a similar risk profile (implicit backstop
| by government), but also unbounded upside (unlike fixed
| income options)?
|
| > I imagine the potential collapse of the financial
| markets, was maybe a more important cause of monetary and
| fiscal policy around that time.
|
| Because the businesses are so big ABs interconnected now.
| If a mom and pop family business goes out of business,
| that's a few people who need to scramble, they're not
| politically influential enough for a bailout.
|
| If multiple SP500 companies are at risk, then I am going
| to bet Congress is going to shift into high gear to find
| a solution.
| opo wrote:
| >We don't need to adjust for inflation since we are
| comparing nominal returns across the board.
|
| Well there are things like TIPS, so comparing real
| returns across the board might be more helpful. Some of
| the returns from S&P investing will be in the form of
| dividends, so ideally the amount of taxable gains would
| also be included to get a better comparison.
|
| I agree that even with the history of long slumps that
| stocks are still one of the best investments out there.
|
| >If multiple SP500 companies are at risk, then I am going
| to bet Congress is going to shift into high gear to find
| a solution.
|
| I think we might be in agreement that bailouts come down
| to systemic risk and political pull. Silicon Valley bank
| fails and people got all their money bank even if the
| accounts were far above the FDIC limits. Other banks fail
| at about the same time and account holders get only up to
| the FDIC limit. Maybe there was systemic risk there, but
| it feels like political pull was at least involved.
|
| When the dot com bubble burst, many large companies
| failed but there was no concentrated action by Congress
| or the Fed to bail them out. Hence the lost decade for
| S&P 500 investors.
| eru wrote:
| > The S&P500 was flat or negative from 2000 to 2012. And
| this isn't unusual.
|
| Be careful not to mix up the S&P500 index numbers with
| the total return you get from holding the portfolio and
| re-invest dividends. (However, even with the total return
| you can find some longer stretches that are flat or
| negative.)
| eru wrote:
| > It would be bold to bet against a government not
| constantly decreasing the purchasing power of its
| currency to prop up asset prices, [...]
|
| That would only prop up assets prices in nominal terms,
| but doesn't have much to do with your retirement
| planning. (Unless your only alternative to index funds is
| sticking local money under your mattress; and you can't
| even think of sticking gold coins or foreign currencies
| under your mattress, or buy real estate etc.)
| lotsofpulp wrote:
| Correct, but that accomplishes the goal of having a
| hidden tax (although more people are aware of it now) on
| earning income (since labor price increases lag asset
| prices increases).
|
| Just look at who the biggest winners pre and post Covid
| are. If you owned assets pre Covid, you are golden. The
| more you owned, the more guilded you became. Pretty much
| all government policy I see starts with the basis of how
| do we ensure existing asset owners stay ahead of the
| rest.
|
| It's a mechanism to ensure the social order/hierarchy
| persists (which is a combination of wealthier/older/soon
| to be older/beneficiaries of older at the top and labor
| sellers/young/poor at the bottom). Because that is what
| is politically possible (until a catalyst prompts
| revolution).
|
| Reducing purchasing power of currency is one way, but
| another is also replacing goods and services in defined
| benefits with inferior goods and services. For example,
| Medicare/Medicaid used to provide for seeing a doctor,
| whereas now and in the future, you are likely to have to
| see a Nurse Practitioner or Physician Assistant, unless
| you cough up more money for concierge care or direct
| primary care.!
| 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).
| JoshTriplett wrote:
| There was a study
| (https://en.wikipedia.org/wiki/Trinity_study) showing
| that you could count on a 4% withdrawal rate for
| retirement income over any 30-year retirement period,
| including periods spanning the Great Depression and other
| market lows. Most of the time you can count on more; that
| was the _lowest_ across the entire study. And with
| compounding, the difference between "30-year retirement
| period" and "indefinite retirement period" is not much;
| withdraw a bit less, or be able to adapt to prevailing
| conditions, and your retirement portfolio will last
| indefinitely.
| eru wrote:
| Are you talking inflation adjusted or nominal? Total
| returns?
| hunter2_ wrote:
| I guess nominal, because not having kept up with
| inflation would be the main source of it sucking badly. I
| think of it like this:
|
| You lose to inflation badly with uninvested cash. You get
| close to keeping up with inflation with near zero risk
| vehicles (CD or high yield savings account). You hope to
| at least keep up with inflation with medium-low risk
| vehicles (S&P500 or similar funds). You roll the decide
| after that (leverage, timing, stock picking, etc.).
| 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.
| krazii wrote:
| Sure, it is not guaranteed profit, but it is certainly
| not "always a scam" as previous poster put it. It is very
| likely a way to make profit.
| 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?
| s1artibartfast wrote:
| The money that is used to buy the bonds goes to the
| government, and then into the pockets of the citizens.
|
| The bond holders tend to be the tax prayers as well, so
| it is almost like a partial rebate.
| rlayton2 wrote:
| There is a risk, however small, that your bonds won't be
| paid back leading to a large loss.
| eru wrote:
| There's also the very real risk of bigger than expected
| inflation.
| 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.
| ensignavenger wrote:
| The problem for some of those banks wasn't the 30 year
| treasuries, it was that they bought those treasuries with
| other peoples money, and other people did not commit to
| 30 years, so now when the other people come to get their
| money, the bank doesn't have it.
|
| The 30 year treasuries are still doing just fine, in
| accordance to the terms of the treasury when it was
| bought.
| eru wrote:
| The treasury offers no fixed terms for inflation. It's a
| gamble.
| ac29 wrote:
| Inflation adjusted bonds are a thing in the US (though at
| least with TIPS, the real return has occasionally been
| negative).
| 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.
| eru wrote:
| Why does the evil conspiracy that's exploiting those poor
| workers let nobodies like me (and presumably you) buy
| shares that let us participate on equal terms in their
| profits?
|
| The aristocrats of old never felt the need to share the
| wealth like that, did they?
| 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.
| __turbobrew__ wrote:
| I believe your account, and agree that this investment
| has turned out well for you. The last 11 years are not
| normal in my opinion, and I believe the time will come
| where policy changes will make this investment strategy
| much less desirable.
| throwaway2037 wrote:
| Have you looked at the return from S&P 500 in the last 10
| years? 1,964 -> 5,823 is about 11.5% per annum,
| compounded. It is one of the biggest bull markets in 100
| years. And you are telling us that your investment
| properties are sustaining the same returns? Unbelievable.
| Neither is sustainable.
| SirMaster wrote:
| Yes. I feel like you are not understanding anything about
| what these investments entail.
|
| A struggling apartment complex property in an up an
| coming area is purchased and I put money into that deal.
| I am only say 100 or 200K of an otherwise ~10 million
| investment. The complex is massively overhauled, new
| facilities are built, units are completely refurbished,
| the on-site staff are replaced, bad tenants not paying
| are evicted, and new vetted tenants are found. The whole
| place is re-branded and then after all this is complete
| is sold for a substantial profit. All while making income
| from rents during the time the property is held.
|
| It's a LOT of work. Not by me as I am just an investor,
| but by the managing partners who spent months or longer
| searching or and analyzing the area and working with the
| bank for the loan and then doing all that work to
| completely overhaul the place.
|
| When you find and invest with a management partner who
| has been doing this awhile and has a proven track record
| yes the returns are as good as I am saying.
| 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.
| SirMaster wrote:
| When I learned how a lot of the government policies
| worked it just kinda blew my mind. Yes you are
| effectively 4x leveraging your investment with a way
| lower risk than doing something like that in the stock
| market. You are certainly leveraging other people's money
| in a way. Plus the tax deductions on asset depreciation
| are wild.
|
| Maybe it won't last forever, but I'll pursue it while it
| works.
| __turbobrew__ wrote:
| Yea I think that is the crux of it. You are using social
| programs designed to keep a roof over people's head for
| financial gain.
| lotsofpulp wrote:
| If the social program was designed to keep a roof over
| people's head, then it would simply give people cash, or
| a roof.
|
| The fact that the social program involves extending lines
| of credit means that the design was not to keep a roof
| over people's head, but rather enrich existing asset
| owners and indebt future ones to get them chained to the
| treadmill. Similar to cutting funding for higher
| education and replacing it with student loans.
| __turbobrew__ wrote:
| Maybe I am wrong about the purpose of subsidized loans
| for housing but the result is the same -- public costs,
| private profits.
|
| Will gen Z see they are at the bottom of a pyramid that
| ceases to exist with their generation?
| TeMPOraL wrote:
| > _If the social program was designed to keep a roof over
| people's head, then it would simply give people cash, or
| a roof._
|
| Except it wouldn't happen, because it would get killed by
| even louder whining about giving free money to the lazy
| do-littles. Every social program has to have a layer of
| appeasing the people who only feel they're part of a
| society when it benefits them.
| 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.
| SirMaster wrote:
| It's 6% income plus a doubling of the investment.
|
| 100K after 5 years became about 230K. 30K of passive
| income that was essentially tax free because of the
| offset from the depreciation of the property and the
| assets within the property that depreciate at a
| significantly faster rate than the rental property.
|
| And then with all the improvements made to the property
| and the increase in rent that the substantial improvement
| could garner, selling the revamped property nets roughly
| double the initial investment, which if put into a new
| property within 90 days also incurs no tax for the
| transaction.
|
| But I am also not even accounting for investing any of
| that income. Just with the roughly doubling every roughly
| 5 years, 100K in ownership stake can become 1.6M after 25
| years. I started with 100K and already had a property
| that sold, and then did it again, and it's currently
| invested as a roughly $400K stake 11 years after I
| started with a yearly income of around 24K on the 3rd
| property that I am now invested in and so far things seem
| on track as normal.
| Ctyra wrote:
| Do you mind sharing some details on what kind of real
| estate investments these are?
| SirMaster wrote:
| Multi-family, so apartment complexes. The deals are for
| tens of millions of dollars, and you can usually join in
| for as little as 75K.
|
| But you either need to be an accredited investor, or know
| one of the managers of the deal before the deal is set
| and they let you join. They are typically allowed to
| bring in a certain percentage of the deal from non-
| accredited investors that they know.
|
| What's nice is once you go through a full deal cycle
| usually 5-6 years, and they sell, you become an
| accredited investor for having gone through that and that
| makes it much easier to find and join another deal
| without having to know the managing partners personally
| beforehand.
|
| Like one of the deals I am in is primarily managed by
| this guy. And he has a very large personal stake of
| several million.
|
| https://thinkmultifamily.com/
|
| He's got way more money on the line than me in the deal,
| and so he cares very much about making the property
| successful for himself and selling at the right time etc
| and I am really just along for the ride essentially.
|
| Here is one of the other main managing partners of
| another deal I am invested with.
|
| https://raisere.com/
| ac29 wrote:
| >additionally the total investment about doubles in
| roughly 5 years
|
| According to data at FRED
| (https://fred.stlouisfed.org/series/MSPUS), the median US
| home price has gone from $320k to $420k in the past 5
| years (an increase of around 30%).
|
| So, I guess good for you that you happen to have done so
| much better than the median, but your results are
| atypical at best, and misleading at worst.
| SirMaster wrote:
| This is not home prices, this is apartment complexes that
| I am talking about. They are tens of million dollar
| investment deals and you can join in with usually as
| little as 75K in what I am referring to.
|
| My results are not atypical for this sector from
| everything I have seen and all the other investors I know
| doing similar deals.
|
| You aren't just waiting for the value to go up... They
| buy sort of struggling properties that are otherwise in
| good areas and show potential and using the investment
| capital they improve the property. A ton of research and
| market analysis goes into picking the right place etc.
| Like installing a pool, gym, basketball courts, security
| gates, renovating and refurbishing all the units etc.
| Renaming and completely rebranding the property. Hiring
| whole new management team for the on-site stuff to better
| handle tenant needs.
|
| And yes you raise the rents and also get occupancy up.
| After all this then you sell the property for
| significantly more.
| throwaway2037 wrote:
| Thank you to share this data. 320->240 in 5 years is 5.6%
| compounded. It is hard for home prices to outpace a
| combination of inflation and real economic growth rates
| for very long. As some point, home prices stall out
| because buyers cannot get enough leverage from mortgages.
| SirMaster wrote:
| This has nothing to do with houses.
|
| This is buying multi-million dollar struggling apartment
| complexes and completely overhauling them and then
| selling them, and then repeating at a whole new location.
| throwaway2037 wrote:
| > the total investment about doubles in roughly 5 years
|
| And: > 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
|
| 5 years * 6K/year is 30K profit rental income. That
| leaves 70k in capital gains. ROI calculator tells me that
| is 11+% per year: 100K->170K in 5 years. Jesus, what
| market? And, how sustainable is that level of return?
| And, will this continue for 25+ years. You make it sound
| so simple. If any of this were true, then (I guess) a
| miniscule number of people could afford to buy homes
| after 25+ years!
| SirMaster wrote:
| There are no capital gains taxes, or well any taxes are
| offset by the depreciation.
|
| For example on a 100K investment in the first year you
| get about 40-50K of depreciation on your K-1. This is
| possible because the investment deal managers bring in a
| firm to account for all the "stuff" in the units like
| appliances and things and these things depreciate quickly
| as is coded into laws.
|
| These deprecations offset any taxes that would normally
| be incurred.
|
| Also when the property is sold, if the money from the
| sale is invested into a new property within 90 says there
| is also no tax incurred on that large transaction.
|
| The single deal roughly doubles the return, plus the
| passive income each year. You are taking that doubled
| profit and putting that money into a completely new deal
| and different property and they are doing the same ~5
| year complete revamp and sale.
|
| Here are one of the managers of one of the deals I am
| invested in. I am only 100K out of several million
| invested, and the mangers have a much larger stake, so
| they have way more on the line to do well in turning the
| property around and did their due diligence to find a
| place to buy that was undervalued.
|
| https://raisere.com/strategy
|
| I hope that helps you understand what I am talking about
| a bit better.
| 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.
| eru wrote:
| Also just compensation for the opportunity cost of not
| having access to your capital for a while.
| 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...
| eru wrote:
| There was a US housing bust in the late 2000s, but there
| was never a bubble in the mid 2000s. Contrary to popular
| opinion.
|
| Otherwise I agree that in principle and in general all
| else being equal increasing prices lead to lower returns.
| samatman wrote:
| This is also true of being a doctor, practicing law,
| growing fruit, programming computers, driving a cab,
| creating art, making music, running a car wash, and crab
| fishing.
| blagie wrote:
| It doesn't.
|
| Passive income usually requires a burst of highly-
| productive time at the beginning.
|
| If you invent a machine which does farming with no human
| labor, and I invent a factory which makes your machines
| with no human labor, and so on down the line:
|
| 1) Human productivity jumps to infinity
|
| 2) No one needs to work
|
| 3) We all collect passive income, growing exponentially*
|
| Most passive income is some subset of that. If you write
| a book read by millions, or invent something saving
| lives, that's continuing to generate real value for the
| world. Even if you work very, very hard, while scrimping
| and saving, so you don't have to work later, everything
| works out okay (so long as there are kids willing to work
| hard).
|
| * With different exponents, until we have a class of
| ultrarich and ultrapoor, until the revolution, with
| either the poor masses being killed by high tech, or the
| rich by the human masses
| aiforecastthway wrote:
| _> No, that 's just investing._
|
| Yes. Investing is passive income. If you have $20M and your
| lifestyle requires no more than $800K/yr of income taxed a
| waaaaay lower rates than the working stiffs pay on the
| same, then a 4% return more than suffices to live off of
| income that is waaaaay more passive than most passive
| income frauds even come close to promising.
|
| The difference between "investing" and "passive income" is
| mostly just the difference between blue blood and the new
| rich. A tale as old as time.
|
| Working men of the world uniting would be an utter
| disaster, so instead they're persuaded at any cost to
| choose sides in this absurd dichotomy between two sets of
| do-nothings.
| eru wrote:
| Why would working men of the world uniting be a disaster
| for my ETF? Don't the working men need machines and
| capital to work?
|
| > If you have $20M and your lifestyle requires no more
| than $800K/yr of income taxed a waaaaay lower rates than
| the working stiffs pay on the same, then a 4% return more
| than suffices to live off of income that is waaaaay more
| passive than most passive income frauds even come close
| to promising.
|
| Assuming you are in eg the US than a 4% nominal return is
| actually taxed quite severely in real terms, ie after you
| adjust for inflation.
|
| That's because capital gains taxes and taxes on interest
| don't account for inflation.
| throwaway2037 wrote:
| My comment is _very_ specific about the ultra rich who
| use tax sheltering to reduce taxable burden on passive
| income from bonds: In the US, there is (was?) a special
| class of municipal (state /local) bonds call "triple tax-
| free"/TTF, where the owner can receive interest, but pay
| no federal, state, or local taxes. Of course, there are
| limits, but it is a big business, and the buyers are
| almost always ultra rich. To be clear, under the
| Alternative Minimum Tax (AMT) rules in the US, I doubt
| you can pay zero taxes, but you can certainly greatly
| reduce your taxable burden using TTF muni bonds.
|
| Ref:
| https://www.investopedia.com/terms/t/tripletaxfree.asp
| eru wrote:
| Well, you can also use the buy-borrow-die strategy in the
| US to avoid capital gains taxes.
|
| Here in my adopted home of Singapore we don't have such
| silly things as capital gains taxes. Makes things a lot
| simpler for the average person who doesn't want to pay
| for the lawyers and accountants.
| NeoTar wrote:
| The average person doesn't pay capital gains tax - at
| least in the UK; there is a 12 3000 GBP allowance per
| year of gains which means that you need to have
| significant assets (think top 10% of the country) before
| it becomes an issue.
| tomooot wrote:
| Not PS12300 any more, PS6000 last year and currently
| PS3000.
| blagie wrote:
| Investing is passive income, but most passive income
| isn't investing.
|
| * A way to generate passive income, for example, are
| royalties on a book you wrote.
|
| * Semi-passive income might be $50k speaking gigs after
| e.g. being the PotUS.
|
| In a financed world, perhaps I can make a financial
| instrument out of future royalties, but for most people,
| it's not the same.
| tbihl wrote:
| >If you have $20M and your lifestyle requires no more
| than $800K/yr of income taxed a waaaaay lower rates than
| the working stiffs pay on the same,
|
| Won't somebody think of the "working stiffs" who have to
| slave away for their $800k/yr!?
| ochoseis wrote:
| > Bonds have (relatively) low returns but almost 0 risk
|
| Each of the asset classes you listed has risks. Bonds are
| subject to term (i.e. inflation) and credit (i.e. default)
| risk.
|
| Bonds may be less volatile than equities and commodities,
| but they can definitely go down (e.g. 2022).
|
| The only free lunch in investing is diversification.
| ipaddr wrote:
| Some bonds go down and others have floors.
| jon_richards wrote:
| Sure, there's no free lunch, but there is the beat-you-
| up-and-take-your-lunch-money of _not_ investing.
|
| Bonds may have gone down, but they still paid out. Unless
| people sold at a loss for liquidity or could've timed the
| market and bought low, they were better off than people
| stashing money in a mattress or most bank accounts.
| eru wrote:
| Yes, holding cash also has risks.
| jon_richards wrote:
| That's not really my point. I think one thing that gets
| lost in the "everything has different levels of risk"
| discussion is that many risk/reward profiles are _bad_.
| Calling everything a tradeoff is misleading. Banks are
| more than happy to capitalize on laziness and lack of
| knowledge (an American is more likely to change their
| spouse than their bank), so the balance between risk and
| reward gets thrown out of whack.
|
| The simple term for this is Sharpe Ratio
| https://en.wikipedia.org/wiki/Sharpe_ratio
|
| If you want to get really deep into investment theory,
| Beta implies basically everything is a good investment in
| small enough amounts
| https://en.wikipedia.org/wiki/Beta_(finance)
|
| Though in practice, Beta is mostly irrelevant beyond a
| relatively simple portfolio
| https://finance.yahoo.com/news/warren-buffett-myth-more-
| why-...
| 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.
| yoyohello13 wrote:
| Big bad government enforcing those pesky human rights.
| jayd16 wrote:
| I think people understand that, for example, investing in
| schools generates more value than you put in.
| eru wrote:
| I appreciate your point in general, but I doubt the
| specific one you made. At least for the US.
|
| The US ever larger amounts of money per pupil (around
| $17,280 per pupil annually these days according to the
| Internet), but educational outcomes haven't really
| changed much over the decades. Whether you measure that
| in absolute terms or by international comparison.
| immibis wrote:
| Are they investing or just wasting money?
| eru wrote:
| They are certainly trying to.
| eru wrote:
| Yes, feeding an orphan is consumption (not investing),
| just like buying a yacht with your money.
|
| Rich people do these kinds of things all the time.
| immibis wrote:
| And it has zero value since the orphan doesn't pay.
| eru wrote:
| Neither does the yacht.
| HPsquared wrote:
| This kind of thing is best analyzed using the subjective
| theory of value.
| 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.
| throwaway2037 wrote:
| About your second paragraph, to be fair, most passive income
| schemes involve starting capital (a large amount). Then, this
| capital is invested into _relatively_ safe or low-vol assets
| (investment property, gov't bonds, utility stocks for divs),
| and passive income is received. Alternatively, you could buy
| something like a stable, middle-aged oil or natural gas rig.
| Or managed, commercial forest. Or rights to media to receive
| royalties. Yes, scams can exist in any investment scheme, but
| the previously mentioned ones are accessible, and safe for
| 1-5% of people with sufficient capital.
|
| What bothers me the most about the endless YouTube videos and
| "financial advice" blog posts about passive income: They fail
| to explain how you acquire the initial capital! Frequently,
| they saved millions from a previous job, like a Wall Street
| trader/salesperson or a senior FAANG engineer.
|
| I liked this video from Plain Bagel, "The Passive Income
| Scam": https://www.youtube.com/watch?v=AqZbO8Ojhmw
| 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.
| ElFitz wrote:
| It might indeed be easier to develop automated
| surveillance, reinforce police states, and isolate
| themselves, than create working robot-plumbers, automated
| 3 star worthy kitchens, and self-cleaning boat decks.
|
| And it might be cheaper for them than UBI.
| andai wrote:
| To clarify, the "human labor no longer exists in a
| meaningful way" thing depends (as far as I can tell) on
| "robots are able to perform all human labor", so their
| yacht would be cleaned by robots. Though I imagine they
| might hire humans anyway, as some kind of status symbol!
| (Artisanal, like hand-crafted items today.)
| ElFitz wrote:
| Yes. But I'd be afraid we might reach mass unemployment
| before we get to robots performing well on infinite
| variations of what would otherwise be simple tasks, but
| in wide arrays of utterly unpredictable environments and
| situations.
| Jach wrote:
| Existing welfare schemes do a lot to approximate a UBI
| scheme, just with a lot more overhead, paperwork, moral
| grandstanding, various other inefficiencies that lower the
| useful amounts, and stress for all involved. Still, if a
| UBI scheme were implemented today instead, I don't think
| much would change from the current status quo. It would
| probably provide for living comfortably enough, but not
| enough to buy whatever desired luxury or experience at any
| given moment. That's sufficient for a market to form.
| Whether labor activities like fixing toilets or cleaning
| yachts survive depends on the market price for such labor.
| Some activities will go away (like a well-swept shop)
| because the price floor is too high and automation hasn't
| caught up or been made cheap enough, some will just become
| more expensive, more and more will get automated over time.
| Wytwwww wrote:
| > It would probably provide for living comfortably
|
| Not if we increase the amount of money compared to what's
| currently spent on welfare by several times. Or if we
| don't and just replace current targeted welfare schemes
| with UBI the people who can't actually work will just be
| reduced to extreme poverty.
|
| e.g. US Federal revenue is ~$13k and spending $18k per
| capita and that includes everything. Even if it were
| somehow possible to double tax revenue with no negative
| outcomes it would hardly be sufficient.
| morgante wrote:
| > If everyone receives a sufficient basic income, who will
| fix their toilets or clean their yachts?
|
| Obviously in this scenario we have robots that fix toilets
| and clean yachts. That's not even farfetched.
| ElFitz wrote:
| > If the answer is 'no one', then I'm afraid we'll need
| significant advances in automation and robotics [...]
|
| I would also add that many activities would seem much
| simpler to automate, even today. Such as cobalt mining.
| And yet, we can't seem to be bothered.
| 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.
| refurb wrote:
| Or, what has already happened through the massive
| technological advances of the past thousand years, AI and
| robots replace human labor, and humans spend their time doing
| something else, whether being the person in charge of the
| robots, or breaking into an entirely new area of work that
| never existed before.
|
| It's the same argument that was made back before printing
| presses, the cotton Ginny, tractors, cars, etc, etc.
| 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.
| mcmoor wrote:
| Communists will say this is still rent seeking and the
| tractor should be seized and given to the farmer.
| eru wrote:
| Good luck keeping the guy who builds the tractors
| motivated.
| thrance wrote:
| But wouldn't it be even better if the farmer bought the
| tractor on a loan? Now the farmer keeps the entirety of
| his production and the guy that would have rented the
| tractor also has to work, further improving society.
| wezdog1 wrote:
| Where does the interest go
| thrance wrote:
| To the person that made the loan, to compensate them for
| the risk they took. No need for anyone to profit from the
| work of another forever.
| sokoloff wrote:
| That's the decision to be made by the farmer either
| selling equity or taking a loan.
|
| From the perspective of the banker/lender, they're still
| living off someone else's labor (which is fine for me
| since it's the result of a voluntary exchange for
| something else of value, but it seems like it's not for
| some upthread posters).
| mtizim wrote:
| Both can be true.
|
| - Investing provides benefits for society at large -
| Investors are exploiting the labour of others for their own
| gain
|
| (but also your examples only work in a very weird worldview
| where everything is privatised, but I don't want to bother
| discussing that on this website)
| 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.
| BurningFrog wrote:
| The money is given voluntarily, so no one is "taking"
| anything.
| thrance wrote:
| No one is giving up anything voluntarily. Do you think
| workers in the global South are willingly working for
| meager wages (i.e. giving away most of the wealth they
| generate) or do you think they are somehow constrained into
| it?
| seizethecheese wrote:
| > Money doesn't work, people do!
|
| Not really true at all. Production is almost always a
| combination of labor and capital. Consider a restaurant.
| People are working there but so is a stove, aka capital aka
| money.
| ithkuil wrote:
| Who made and maintained the stove?
| 0xEF wrote:
| I think you misunderstood what capital is. See, one does
| not become a Capitalist without taking advantage of others.
| Most people don't have the initial capital to build the
| stove and sell it to other Capitalists, so they end up, as
| in your example, just another piece of equipment doing the
| actual work in the restaurant alongside the stove. The
| Capitalist and their money do no actual work, but finance
| the work being done then profit from it with stolen wages
| and artificial inflation, which is why your steak costs
| you, the customer, $15 USD to enjoy when the reality is it
| took a collective $5 to actually produce.
|
| So the original reply is correct; money does not work,
| people do.
| CaptainFever wrote:
| No, you misunderstand what capital is.
|
| > While money itself may be construed as capital, capital
| is more often associated with cash that is being put to
| work for productive or investment purposes. In general,
| capital is a critical component of running a business
| from day to day and financing its future growth.
|
| https://www.investopedia.com/terms/c/capital.asp
|
| What you're espousing is the outdated view of the Labour
| Theory of Value. To see why this is wrong, imagine a
| bottle of grape juice that gets forgotten, which turns
| into wine and gains value. Yet no work was put into it.
|
| Please, please stop repeating century-old outdated
| theories that has been disproven.
|
| https://www.investopedia.com/terms/l/labor-theory-of-
| value.a...
| 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?
| throwaway2037 wrote:
| > It is what makes the concept of "retirement" possible.
|
| Sorry, I disagree. What makes retirement possible in highly
| advanced economies is a national pension. In the US and many
| other rich countries, a huge portion of elderly, retired
| people _only_ live from national pension. It is scary how
| many poor, elderly people exist when you look closely. The
| vast majority of Americans will retire with zero or
| "peanuts" in their 401K, or spend it down very quickly, then
| become 100% dependent upon national pension ("Social
| Security") or their family/children/charity.
|
| On a personal note, each time one of my co-workers shares
| about their retirement savings, I am shocked by the tiny
| amounts. They will retire into "virtual" poverty compared to
| their current compensation. They are living for today, not
| tomorrow.
| simonebrunozzi wrote:
| I would agree with you, but you seem to forget the concept of
| "cohorts" applied to this.
|
| You could have people from age 20 to 40 working for everyone
| else; and people from 40 onwards to live on passive income. You
| would still have ~60% of the current workforce. Not impossible.
| MiguelVieira wrote:
| See also
|
| https://en.wikipedia.org/wiki/Paradox_of_thrift
| BurningFrog wrote:
| The categorical imperative is a useful philosophical tool, but
| it's very easily misused.
|
| I'll go to the grocery store tomorrow. Is that moral?
|
| Well if all 8 billion people also went to that grocery store at
| the same time, it would be a horrific tragedy, probably with
| billions dead.
|
| The actual principle is about whether the principle or maxim
| behind the action can be consistently applied as a universal
| law.
| kortilla wrote:
| I don't think people generally agree that rent is a bad thing.
| Providing housing has value
| sbochins wrote:
| It's pretty easy for me to envision a world where nobody makes
| anything and nothing comes to a halt. It's just a matter of
| adding automation in places where we didn't previously have it.
| lumost wrote:
| I suspect the appeal of this in its present state is that
| passive income confers a sense of security to millennials. Our
| jobs are inherently temporary, and at some point in tech fields
| - it is likely that you won't have an easy time finding the
| next one.
|
| Given that loss of income would lead to massive penalties in
| lifestyle up to expulsion from life's basics... It's obvious
| why the winning strategy would be to acquire a secure income
| stream within your control.
| dataflow wrote:
| Basically every sentence I read in this comment has an enormous
| hole in the logic or premise.
|
| > On the other hand, if everyone had access to this capability
| then society and civilization would grind to a halt.
|
| This is a non-sequitur. The world isn't binary. Whether this
| happens depends entirely on _how much_ passive income people
| can generate, and a whole host of other factors that are
| unaccounted for.
|
| > People make things; if people don't make things, then we
| don't eat, we don't drink.
|
| Again, your premise is flawed. Giving everyone (say) a dollar a
| month doesn't mean people will stop making things. It depends
| how much they earn, and a ton of other factors.
|
| > The categorical imperative roughly says that something is
| moral only if its universal adoption would benefit society.
|
| No, that's not what it says. What is says is that the rules you
| live by should be universally applicable. Positive or negative
| effects on society are beside the point.
|
| > So there is a break there.
|
| This is a giant leap in your logic. You have neither shown that
| this wouldn't benefit society, nor that there would be a break
| if it didn't.
| lawrenceyan wrote:
| Don't let this make you shy away from the idea of investing
| though! Remember that fiat currency as a general concept
| ensures that your base unit of value is constantly
| depreciating.
|
| Even if there was zero growth in the overall economy, because
| of how we've structured our financial system, asset prices as a
| whole will always go up because they are pegged to a
| depreciating unit of value.
| caturopath wrote:
| > if everyone had access to this capability then society and
| civilization would grind to a halt
|
| No it wouldn't. The scenario is not an actual one.
|
| Passive income comes from someone benefiting from something you
| own and paying for it. It must still be benefiting for them to
| pay for it. If things had ground to a halt, no one would be
| getting anything, so they wouldn't pay for it.
|
| It's like if I said that people running faster and faster would
| eventually result in them running faster than the speed of
| light. No it wouldn't: I'm just extrapolating a model out of
| its domain of applicability.
|
| > Or maybe only if you couple it with the categorical
| imperitive.
|
| It also requires taking 'collecting passive income' as a moral
| act. If I took 'being a car mechanic' as a moral act, I could
| explain how awful it would be if everyone became car mechanics:
| there would be no farmers or nurses. But that's a poor analysis
| of the morality of occupation. This application is absurd and
| your application is not, but there is a decision on your part
| that wasn't among your premises.
| farts_mckensy wrote:
| Just call it what it is, rent seeking behavior. It's parasitic.
| Gigachad wrote:
| Most "passive income" schemes are really just front loading all
| of the work. Producing way more than you consume in return, and
| then collecting the benefit later.
| kortilla wrote:
| With this narrow definition nearly any income is "immoral". If
| everyone became a heart surgeon society would grind to a halt
| as well.
|
| The amount of labor, active or passive, isn't really relevant
| in an absolute sense. It's about meeting society's demands.
|
| I happily pay for electricity that is fully generated by
| machines. Yet if everyone built solar or wind we'd be fucked.
|
| Your argument is really trying to push the "income without
| direct labor is immoral" narrative. But there is nothing there
| to really support it other than an example of a massive
| imbalance wiping out society, which is not specific to labor.
| xivzgrev wrote:
| Imagine a future where every person owns a personal robot who
| does their current job for them, and the person gets paid.
|
| That's not inherently evil is it? It sounds pretty nice.
|
| The evil comes in people squeezing others. Whoever make the
| robots obviously have a lot of power, corporations would
| quickly find ways to cut out the "parasitic" humans and get the
| robot labor, etc.
| kdmccormick wrote:
| I agree with your parallel to rent seeking. Rent seeking is
| indeed both (a) arguably immoral and (b) seemingly inescapable
| in a society which respects property rights.
|
| The theory of Georgism [1] suggests a way that we could
| eliminate rent seeking: by taxing ownership of all common
| resources at the value of the rent they would demand. That way,
| property owners, telephone operators, etc. would be rewarded
| for their labor in development and upkeep of the property, but
| would not be rewarded for ownership of the property itself.
|
| [1] https://en.wikipedia.org/wiki/Georgism
| bufferoverflow wrote:
| Rent seeking is not immoral. You own something. You choose to
| let others use it for a fee per month or per day. Some other
| person _voluntarily_ thinks your deal is good and agrees to
| pay to use your something.
|
| Sure, you can come up with some obscure examples of rent
| seeking being immoral, like charging a dehydrated dying
| person $1000 per glass of water, but that's not what we're
| discussing here.
|
| If you disagree, let's make a deal where I get to use all of
| your stuff for free forever.
| BriggyDwiggs42 wrote:
| I'd argue rent seeking, whether moral or not, leads to a
| bad system with a class of people with vast wealth and no
| need to work, and a class of people largely without access
| to the same manner of income who have to labor for a
| living.
| samatman wrote:
| You're misinformed. You're describing rental, it's an
| understandable mistake, but despite the shared etymology,
| rent seeking is something entirely different.
|
| It is by definition any scheme which extracts wealth
| without providing value. Renting apartments, or equipment,
| is not rent seeking. Putting a barrier in a river and
| refusing to allow passage of cargo without a tax, that, is
| rent seeking.
|
| If you agree with me that a scheme to extract the wealth of
| others, while providing no value in return, is immoral,
| then rent seeking is, in fact, immoral.
| kdmccormick wrote:
| Bad comparison. I am not seeking rent on any of my stuff.
|
| Now, if I hoarded a bunch of stuff that other people needed
| and then charged them for access to it, that'd be rent
| seeking.
|
| > Sure, you can come up with some obscure examples of rent
| seeking being immoral, like charging a dehydrated dying
| person $1000 per glass of water, but that's not what we're
| discussing here.
|
| This is in fact what we're discussing, and your strawman
| example is ironically very on the nose. Except it's not
| water, it's housing. People are being forced to move away
| from my city or sleep on the street because the average
| unit rent is $3400 a month. The beneficiaries of this
| system are property owners who spend _some_ money on
| development and upkeep (which they deserve to profit from)
| but largely just rake in passive income from having been
| lucky enough to buy when prices were low.
| coding123 wrote:
| Actually I believe it did break the world but we haven't
| noticed yet.
| ipsum2 wrote:
| What is a "scissor concept"? Google returns no results.
| CaptainFever wrote:
| Maybe it is a reference to this?
| https://slatestarcodex.com/2018/10/30/sort-by-controversial/
| martin82 wrote:
| Nonsense. If everyone in society had a passive income (ie
| because we can program robots and they do the producing) it
| would be amazing.
|
| Everyone is causing production, earning money, and then
| spending that money on the things that everyone else decided to
| produce.
| android521 wrote:
| hopefully, in the future, robots will do most work in society.
| Humans can just learn, exercise, eat, create/build/consume for
| fun and curiosity.
| portaouflop wrote:
| Hopefully this dystopia will never come to pass.
| tarkin2 wrote:
| Reinvesting money from stocks and shares is passive income,
| right? It's hard to say investing is immoral.
|
| It benefits society if universally adopted, albeit only as a
| part of an individuals economic activity.
|
| Passive income as the only economic activity doesn't pass the
| categorical imperative test though: it just creates a
| stratified hierarchy of owners and workers.
| mxkopy wrote:
| As others have stated I don't believe this is a good faith
| definition of passive income. What do you do with your time now
| that you don't have to work? If you decided to sleep all day
| and spend money on consumption, I would call you ill. At some
| point you'll probably want to do something productive, not
| because you want to get paid but because that's just what
| people tend to do at some point.
|
| I do think a society where this is the only type of work being
| done is possible. It's not free money or perpetual motion, just
| efficient at matching people's natural inclinations to demand
| (and automation could fill in the gaps).
| throwaway2037 wrote:
| I like your point. When I see the term "passive income", I
| immediately convert it to "rent seeking". _Some_ amount of rent
| seeking will always exist in any capitalist system, but there
| is a limit where it becomes inefficient. However, most
| capitalist systems are self-adapting _enough_ , such that when
| too much of one type of rent seeking appears, eventually new
| joiners are priced out with zero or negative returns. A simple
| example to understand is rental property: In many big cities,
| the ROE on rental cashflow can be nearly zero. (However, there
| is still a good chance for capital appreciation.)
| fragmede wrote:
| The original definition that's been hopelessly muddied
| (language evolves, so eh; I find the etymology interesting)
| of rent-seeking was that of powerful business men using
| politics to get benefits. Like a subsidy for their product or
| some regulation passed that favors them.
| 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.
| Zanni wrote:
| I worked as a telephone operator a couple of summers and pay
| phones were a pain in the ass. The protocol for a long-distance
| call (and this was back when long distance was expensive, up to
| to a couple of dollars/minute), you'd collect for three minutes
| up front and refund if they went under. If the call went longer,
| the caller was expected to stay on the line and pay the balance,
| which could be considerable. Often they just bailed. There was
| one exchange near a military base where we'd have to handle
| lengthy long-distance calls from lovesick/homesick recruits, and
| so many of them bailed out at the end of call that we took to
| breaking in every three minutes to collect more coins. Worst part
| of the job.
| whatusername wrote:
| Fun thing with payphones - at least in Australia -- Telstra is
| investing in upgrading them (at least the ones in the cities).
| They aren't very useful as phones - but they are incredibly well
| situated billboards that you can plaster ads on top of.
|
| https://www.smh.com.au/national/nsw/first-came-the-giant-adv...
| snarfy wrote:
| In the mid 90's I knew a guy with a few soda machines. I recall
| him saying he would buy soda from Costco and made about 8-10k/yr
| from each machine. The machines were about 2k each. I think he
| had 4 machines for about 40k/yr passive revenue.
| sWW26 wrote:
| How did the soda get from Costco to the machines, how was the
| cash collected? Might be low effort but don't think you can
| call it passive revenue.
| TruffleLabs wrote:
| Vending machines are not passive! They need repair, management of
| the money, if they sell goods then they need restocking (and that
| restock needs to be purchased), and you have to negotiate for
| location location location.
|
| And if coins are involved there is work to collect the coins and
| get them to the bank.
|
| Lastly, running a vending machines company requires regular
| involvement to make sure everything is running.
| slumberlust wrote:
| Same can be said of any type of 'passive' income. In general, I
| take passive to imply you get out more than you put in. It's
| the ratio of time invested to time physically working.
| nuancebydefault wrote:
| Hmm then everybody who is able to set aside some money, has a
| passive income. How lucky i am!
| avree wrote:
| Yes, that is why it's called "passive investing", because
| it creates a "passive income".
| mhuffman wrote:
| This is still passive. This is similar to owning 10 apartment
| buildings. You have to hire managers to deal with all the day-
| to-day, but there is still money left over. You just have to
| make sure that they aren't stealing from you. Similar to a lot
| of investments, which I would also consider passive income.
| Even with stocks, you can't just sleep or you could end up in a
| bad way, but you are also not putting in 8 to 12 (or more
| sometimes) hours of work a day like a small business.
___________________________________________________________________
(page generated 2024-10-29 23:02 UTC)