Buy payphones and retire

https://computer.rip/2024-10-26-buy-payphones-and-retire.html

by cratermoon • 2 years ago

476 342 2 years ago

anonzzzies2• 2 years ago

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• 2 years ago

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• 2 years ago

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.

TheRealPomax3• 2 years ago

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.

asveikau4• 2 years ago

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.

hinkley2• 2 years ago

Ponzi schemes are pure financial instruments. If a product is involved it’s called an MLM.

jabroni_salad• 2 years ago

Do you already have financial independence? Not being able to understand why retiring would be desirable sounds like an incredibly privileged opinion.

forinti• 2 years ago

You might not want to retire, but your body (or mind) might have other ideas.

mock-possum• 2 years ago

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.

anonzzzies2• 2 years ago

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• 2 years ago

Don't humblebrag.

Scoundreller• 2 years ago

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.

asveikau4• 2 years ago

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• 2 years ago

Yeah, same thought. Their attractiveness for laundering money may be diminishing.

stult• 2 years ago

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).

0cf8612b2e1e3• 2 years ago

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.

hyperhopper5• 2 years ago

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?

monero-xmr• 2 years ago

Or you put it out and a week later someone has bashed it to pieces with a baseball bat

bbarn2• 2 years ago

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.

bongodongobob3• 2 years ago

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• 2 years ago

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• 2 years ago

What’s triangular shaped, 3D, and rhymes with Eeramid Scheme.

hyperhopper5• 2 years ago

Not a Pyramid scheme, that's for sure because that's a concept, which means it's not 3D.

ndarray2• 2 years ago

The world is 3D and instances of pyramid schemes exist in the world, making them 3D.

nsbshssh3• 2 years ago

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• 2 years ago

Ah, but people with turnkey, profitable businesses don't tend to sell them.
Something is up.

Who would have thought?

jbaczuk• 2 years ago

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.

warner252• 2 years ago

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• 2 years ago

That tiled background is from this gem of a video, starting at 4:50

https://youtu.be/tc4ROCJYbm0?si=Q2OpRvvjebTPrV-p&t=290

nsbshssh3• 2 years ago

That is a gem!

btilly2• 2 years ago

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.

cies2• 2 years ago

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• 2 years ago

Best doesn’t need to mean best investment. Best could simply mean what he enjoyed most. He likely thinks fondly of a simpler time.

Der_Einzige• 2 years ago

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.

btilly2• 2 years ago

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.)

jgalt212• 2 years ago

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).

bdjsiqoocwk2• 2 years ago

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.”

cryptozeus3• 2 years ago

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• 2 years ago

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.

cryptozeus3• 2 years ago

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.

SoftTalker2• 2 years ago

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.

cryptozeus3• 2 years ago

Very true, I did exactly this.

WalterBright3• 2 years ago

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.

bdjsiqoocwk2• 2 years ago

there really is no free
just buy index funds

Sounds like your contradicting yourself. Sounds like index funds are in fact a free lunch.

bemmu• 2 years ago

There may be some, but the people who find them have no incentive to tell others.

ChrisMarshallNY• 2 years ago

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.

WalterBright3• 2 years ago

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.

warner252• 2 years ago

This reminds me of storing equipment and supplies at the platoon level in the Army. The Army owns a huge number of shipping containers, like they're pervasive on any Army base, just part of the landscape. Basically every platoon keeps most of its stuff in these containers instead of proper buildings (minus weapons and ammunition, unless deployed somewhere, and then the shipping containers become arms rooms too). It also just makes it easier to deploy all the stuff, because it's already loaded up to go. Anyway, they're all "secured" with padlocks. Because of personnel turnover and poor bookkeeping, the right keys always seemed to be missing, so every platoon also had a set of bolt cutters. The padlocks were constantly being chopped off whenever people needed to look for things, conduct an inventory, etc. and then replaced with new padlocks. Taking a step back, it was crazy and didn't instill much confidence.

Izkata• 2 years ago

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• 2 years ago

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• 2 years ago

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• 2 years ago

"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.

andai5• 2 years ago

just put up some initial capital in exchange for even more money back

Isn't that how index funds work?

hifromwork2• 2 years ago

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.

markus_zhang2• 2 years ago

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.

m463• 2 years ago

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• 2 years ago

put up some initial capital in exchange for even more money back

The "even more money back" part is, in principle, compensation for you gathering the capital together and taking on the risk of losing. Not that it works out that way in practice.

miki123211• 2 years ago

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.

jayd163• 2 years ago

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.

kmeisthax• 2 years ago

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.

throwaway20377• 2 years ago

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_• 2 years ago

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.

andai5• 2 years ago

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.

ElFitz4• 2 years ago

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.

thrance6• 2 years ago

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• 2 years ago

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.

seizethecheese2• 2 years ago

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• 2 years ago

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.

thrance6• 2 years ago

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• 2 years ago

Passive income for all is post scarcity, luxury space communism, ala Star Trek.

tomcar288• 2 years ago

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_• 2 years ago

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• 2 years ago

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.

jayd163• 2 years ago

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• 2 years ago

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

thrance6• 2 years ago

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.

sokoloff2• 2 years ago

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.

user90131313• 2 years ago

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.

BurningFrog2• 2 years ago

The money is given voluntarily, so no one is "taking" anything.

seizethecheese2• 2 years ago

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.

tgv• 2 years ago

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• 2 years ago

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• 2 years ago

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_• 2 years ago

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?

throwaway20377• 2 years ago

    > 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• 2 years ago

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• 2 years ago

BurningFrog2• 2 years ago

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.

kortilla2• 2 years ago

I don’t think people generally agree that rent is a bad thing. Providing housing has value

sbochins• 2 years ago

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• 2 years ago

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• 2 years ago

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• 2 years ago

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• 2 years ago

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• 2 years ago

Just call it what it is, rent seeking behavior. It's parasitic.

Gigachad• 2 years ago

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.

kortilla2• 2 years ago

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• 2 years ago

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.

kdmccormick2• 2 years ago

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• 2 years ago

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.

coding123• 2 years ago

Actually I believe it did break the world but we haven't noticed yet.

ipsum2• 2 years ago

What is a "scissor concept"? Google returns no results.

CaptainFever2• 2 years ago

Maybe it is a reference to this? https://slatestarcodex.com/2018/10/30/sort-by-controversial/

martin82• 2 years ago

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• 2 years ago

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• 2 years ago

Hopefully this dystopia will never come to pass.

tarkin2• 2 years ago

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• 2 years ago

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).

throwaway20377• 2 years ago

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• 2 years ago

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• 2 years ago

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• 2 years ago

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• 2 years ago

...Don't ask! https://youtube.com/watch?v=ITfQGEASYvU

eigenvalue• 2 years ago

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• 2 years ago

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• 2 years ago

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• 2 years ago

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...

emmelaich• 2 years ago

They also provide wifi -- https://fon.com/ marketed as Telstra Air.

snarfy• 2 years ago

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• 2 years ago

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• 2 years ago

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• 2 years ago

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• 2 years ago

Hmm then everybody who is able to set aside some money, has a passive income. How lucky i am!

mhuffman• 2 years ago

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.

cman1444• 2 years ago

Clearly it's a spectrum with one side being low intensity/low return, and the other being high intensity/high return. The only question is to ask yourself where you want to be on that spectrum.

onetokeoverthe• 2 years ago

Place the vending machines/pay phones inside other locations...train stations, etc.

LoveMortuus• 2 years ago

I already know of dividends, but besides that and interest, I don't really know of many others.

Would love to hear some ideas for passive income that you have encountered and have experienced.

Buy payphones and retire

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