Ask HN: How to start earning $500/month in passive income in next 12-18 months?
I am a Ruby on Rails developer from Bangalore, India. Currently working for a startup in Bangalore as a full time employee.
Few months ago there were lots of posts on HN related to passive income. This gave me thought about having passive income which will give enough freedom to work on my own ideas/project fulltime.
In India one can easily live on $500/month, so keeping that in mind I have setup a timeline of 12-18 months(which I think should be enough) to generate that much amount.
Right now I don't have any savings which I can invest to earn and I've free time available around weekends.I am working on few ideas of my own, but those will not necessarily generate income.
So what would you do suggest me to do?
203 comments
[ 3.3 ms ] story [ 102 ms ] threadSelling apps? Ad based revenue? SaaS?
As an EU citizen can't I just relocate there and collect without ever having contributed to french social security?
Doesn't seem to make much sense...
Note that how much you get is barely enough to live (but it fulfills its goal which it to reduce poverty).
(and there's a good chance the program will be scraped at some point, since while it fulfilled its goal with reducing poverty, it didn't have much impact in term of employment and there is still a ceiling effect even so it was supposed to remove them).
(and I'm not sure which part of reducing poverty doesn't make much sense, and as a EU citizen you can profit from any wellfare system within the EU)
So a stock priced at 100 doller-pounds and a yield of five percent could be expected to hand a stockholder 5 doller-pounds a year.
Obviously, this is an instantaneous snapshot, based on the price now and the dividend then, trying to give an idea of something that might be expected to happen in the future. So it's by no means any kind of guarantee; it is, however, an easy starting place before looking deeper into the stock to see if you really could expect a good yield going into the future.
Pardon me, but that is more or less the opposite of the traditional received wisdom.
High dividend stocks come in two varieties:
* Low-growth, mature, typically capital-intensive companies, especially those in highly-regulated industries. Think power generation, some real estate investments, and so on. Since stock price appreciation is not in the cards, dividends are the only returns an investor can expect and thus are higher. These are typically the safest stocks, although "safety" is relative; stocks are more risky than most other investments.
* A dividend-paying company whose stock price has been depressed, typically due to specific events: poor management decisions, a bad environment, competition, or what have you. These are typically considered "value" investments; the stock price has been pushed down, usually for good reasons, but also usually, too far. The dividend on these is unlikely to be maintainable---management will usually reduce it as part of doing something to get the company back on its feet or whatever. However, the investment itself is not particularly unsafe, in my personal opinion. See Buffet's "The Superinvestors of Graham-Doddsville" for some other people who feel likewise.
The second group is probably not what the poster wants and I would be uncomfortable focusing solely on the first since those kinds of industries are typically economically linked.
On the other hand, you do have to know what you mean by "high dividend". Thanks to the "dividends are doubly-taxed" lunacy, and double thanks to the "growth is everything" mentality, dividends are very low or non-existent. Anything above, say, 4% (to pull a number out of my flying monkeys) is probably a return of capital, not a return on capital; the money you get as dividends includes a partial payment of your original investment and you cannot expect to get your original investment back when you sell it. In fact, it will disappear entirely over time. And anything over 1.5% to 2% (again with the flying-monkey-numbers) probably represents the value investment situation rather than something sustainable. The 6% mentioned by the grandparent probably is indeed pretty risky.
Also, the bond market is usually considered safer than stocks, with a higher interest "dividend". But I don't really know much about that.
This should not be considered financial advice, I'm some random dude on the internet. Look carefully before you leap, try to learn what you're doing before you try to do it, and try to stick with reputable instruction. There is a crap-ton of bad information out there.
[Did I write something particularly controversial?]
Royal Dutch Shell gives a yield of 4.3%. http://ycharts.com/companies/RDS.B/dividend_yield
In 2010, it's yield was 6.5%.
It isn't inconceivable in 18 months time it'll be back near 6%.
It's all about timing.
I'm sure there are other high dividend stocks which are similarly non-risky, high yielding and produces a non-volatile source of income. 6% is on the high side, but isn't impossible.
You also don't have to look for USD denominated investments. The Commonwealth Bank of Australia (Australia's largest bank), gives a dividend yield of close to 5%.
https://www.commbank.com.au/about-us/shareholders/shareholde...
The share price had risen over 50% over the past 4 years so if you had bought it 4 years ago instead the yield would be much more attractive.
Yields are low currently only because the entire market is currently on the high side of the cycle. When it turns back down, that's when you go in and pick up your 6%, which may be 18 months from now (though could be more, or less).
EDIT: If you're really going to do this I recommend diversifying your investment into 3-4 high dividend stocks in different industries - since dividends do vary as the economic cycle in each industry moves up and down.
I rent my parents' house in a medium-sized midwest US city; I get around $650/month after property management expenses. After taxes, insurance, maintenance expenses, and the occasional empty period, I'm not getting anywhere near that out of it. But it is still profitable, passive, and the investment needed to increase my income (in other words, buying more property) would not really be excessive.
Then you sell exclusive, limited access to the list. The internet is virtually littered with small SaaS applications which are targeted toward small businesses. They are selling software for bookkeeping, time tracking, shift planning, appointment reminders, practice management, etc. These SaaS products have LTV numbers such that direct calling is worth their time.
Random ideas:
- Start something like skoshbox.com, but with Indian goodies. You may not realize it, but foreign countries crave Indian tastes and flavors. I would probably pay for a monthly delivery of Indian spices and sweets.
- Start a podcast on a passion of yours. Offer free newsletter and video lessons, then charge for premium content or up-to-date episodes and consulting.
- Omegle meets paint. A collaborative canvas for children of different nationalities to meet on the Internet. No chat, no video/audio – just the canvas. Revenue may come from ads, sponsors, educational programs within the platform.
EDIT: to whoever downvoted my post, may I ask why?
Would you be selling small kits of spices to prepare a meal, with a recipe delivered at the same time?
This is a time intensive operation. As of now, I m not convinced the returns would be high enough.
Granted it's not truly passive income, rather semi-passive. That said, with minimal monthly efforts, the money comes in each month.
If you can contract for $80/hour for US/EU clients (really possible), you'll need to work only 40 hours to cover a 6 month expenses.
But that won't probably be enough for one month, once you start earning it. You've been warned ;)
Do you have more info/advice about that? I've often flirted with the idea of online freelancing for overseas companies... But a lot of the freelancing sites either seem too dodgy/cheap, or elitist about "github" commits and the like.
Now how to get the clients. I'll leave you to figure out that part on your own.
Those clients will then give you repeat business or they might bring new contacts for you.
Finding good devs in India is a big pain for the guys in US/UK. So if your client is happy with your service, he will recommend you to others.
I used to be a freelance PHP dev sitting in India back in the old days of rentacoder.com
What the OP wants is a higher pay, so he gets more free time.
http://www.stansberryradio.com/James-Altucher/Latest-Episode...
Make a beautiful webpage with a mystic style and offer all kinds of incense, scents, shivas, buddhas, elephants, spiritual stuff all over the world.
In no time you'll be as big as amazon.
- Take advantage of growing e-commerce in India - sell other peoples product ... buy directly from manufacturer and sell it to consumers thru platforms like Flipkart, Snapdeal, etc. ... most of the manufacturer in tier-2 and 3 cities dont have a clue about e-comm selling so help them out and make a good return...
- Start affiliate business (selling other people's products/service) online...
- Create your own product/service and sell it thru your own e-comm store or thru Amazon or Ebay or Yahoo stores.
- Start writing a blog and make it so popular with your amazing content that you can make money thru Ads, affiliate marketing and/or by email marketing.
- You can also start a drop-ship store and sell to the consumers in north-america, europe and/or australia.
- there are small businesses on sale on Flippa (however you need to learn how to find a good one) that can easily make you $6k a year .... find a business that is of your interest/passion ....
Good Luck!
Same with "buy from the manufacturer" - unless you have a lot of storage space, and enough money to hold a lot of inventory, you can't even get into that business. That's assuming the product can even be stored for long periods of time without depreciating (pretty much all of electronics is out of the question then).
Many of Flippa businesses have fake numbers, be very careful. They buy traffic to get Analytics, and when they get a few months of it, they post it on Flippa.
Buying from Manufacturer: again its a haven if you can find a niche product ... there are millions of manufacturers in small cities in india who create fantastic products ... you do little bit of research about what is selling or trending and start with small inventory .... some investment for trial and error is required but not difficult to catch a niche in couple of months ...
Flippa: now a days flippa has become more careful about listing fake sites - there are many tools ... one of the is services offered by Centurica ... they do thorough due-diligence for you (especially revenue and profit claims)...
Such as?
For some types of purchase I do a lot of research to find the right item for me. I actually enjoy the researching process so an affiliate site is a good match for me. A big part of the work is providing useful content which you can only do after performing good research.
My site is a huge searchable catalog of products with affiliate links to Amazon if they're for sale on Amazon, otherwise I provide non-affiliate links to wherever they are for sale. Most affiliate sites are based on product reviews but my site's approach is to provide more search options with more accurate data (data that is often incorrect on Amazon).
If I estimate the hours I've put into it so far I'm surely making less than $1 per hour for my time but as the earnings increase and my new hours decrease it might eventually be a wise investment.
Professional affiliate marketers have multiple niches/sites with multiple ways of revenue generation from each sites ....after some success they have a very good idea which niche is really a big profit maker if spent more time/energy on it and based on 80/20 formula they get rid of the niches that is not profitable compared to effort required.
Also it is an SEO experiment, all my traffic (97%) is Google organic.
It's ~4 months old, has 75k hits/month and generate USD 60. It still growth 100% month over month.
I need some months to return the money I invested (designer, domain, ...), but I don't even count my time. I'm learning more from this project than with anything else I already did.
Tough this is not passive income this might give an idea: Billing $20/hr (that's what we get in Bangalore), getting $500 a month from a single client is very easy. But finding few more clients will get you more than what you want. You will also get a lot of time. Toughest part is getting the client, good clients usually come from your contacts.
Another thought, finding customers for your SaSS product will not be difficult if you have a good circle, attend conferences and workshops in Bangalore which will build you this circle.
I do a day job as openstack dev, freelance on django, and also working on my own ideas - I am doing this to pursue my passion of traveling(digital nomad). :)
Just one correction, it is not because you're in Bangalore, but because you're asking $20/hr. I suggest next time ask 4-5x more and see what happens...
Also, you aren't limited to Bangalore or India... especially if you're a webdev. Try finding some remote gigs.
I have built up a wealth of knowledge through years of study. I have experimented with most forms of passive income over 20 years and found that most of them don't meet the requirements of "passive income".
(presumably you don't tell them the way to generate passive income is by telling others how to generate passive income because that would saturate the passive income training market no?)
[0] - http://www.johnchow.com/
(1) I would say focus first on value rather than money. I delivered my service for free or on trial basis for almost 6 months before clients signed up to pay.
(2) As a freelancer, focus on long-term retainer relationships, built on your value-proposition. And work with clients who have solid reliable cash flows. This way, your income would be guaranteed via 1-2 year contracts.
(3) Please stay away from consumer focused businesses/services if you are looking for small side income (this can be your focus for your big main start-up idea). B2B is always better. The only exception I think is if you get lucky in the app economy or if you could build 1m+ page-view site (Amit Agarwal)