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5 Ways To Earn Passive Income In Singapore

Start adding to your retirement income today by building passive income streams


Building sources of passive income will provide financial freedom when we are older and no longer working. Very often, people think about the amounts they would need every year and dismiss trying to even start earning passive income.

The trick to building it to a sufficient amount is to continuously add to it and reinvesting all the returns until a point that we accumulate enough to be able to survive an entire year on the annual returns of our passive income.

This “shake-leg-and-collect-money” dream very often remains a dream for most Singaporeans. But what we do today can make a significant impact on how well we can retire. Let us present five things everyone can do to start their passive income journey.

1. Invest In Stocks

Of course, you already knew this one.

The fact is that you have to put your money to work to earn more money for you. The question of where to invest then arises. The market is volatile and the oil & gas industry looks doomed. However, by constantly adding to and reinvesting money on strong blue-chip stocks via the STI ETF or REITs, you will be able to average your cost and grow your investments.

Read More: How Does ETFs Investing Really Work in Singapore? 

2. Rental Income

This is one of the most commonly understood methods to receive passive income in Singapore. You buy a property and rent it out to collect income.

There are only two problems with this, 1) you have to live in one property, which means you need a to buy a second property and 2) properties in Singapore are crazily expensive.

The most logical ways to overcome this is to buy additional properties when prices are low (and if we can afford it), as we saw in 2001 and 2008. Or we should rent out a room in our properties, either through Airbnb or an agent.

However, people should note the extra stress and added costs associated with rental properties. You have to deal with agents and tenants to rent out your property, you have to fix anything that breaks in the property, you have to pay conservancy charges and property tax. And not forgetting stamp duty when you buy the property and also the agent fees when you rent out the property.

Read More: Will Singapore’s Property Prices Continue Falling? 

3. Bonds

Bonds are a good way to protect yourself from default risk of companies as it provides superior claims over stocks.

Strong bonds such as the Singapore Savings Bonds offer a rate close to 2.5% per annum if you save for the maximum 10 years or the ABF Singapore Bond Index Fund which also returns close to 2.5% per annum. There are also corporate bonds that offer better returns. Do note that the higher the returns, the higher the risk usually.

Read More: Wow! Bonds!

4. Peer-To-Peer Lending

This is a new financial product in the market that is quickly gaining ground. Essentially, you are the bank and you are lending to companies that require loans. The concerns here are that ordinary people cannot properly discern the risk associated with companies and that the companies who usually need this type of funding cannot attain loans from banks. This means that they are riskier companies.

Nonetheless, it’s an interesting and lucrative way to add to your passive income stream with returns of more than about  8.88% to 20% per annum via  MoolahSense  and  2.2% to 2.5% per month via Capital Match.

Read More: 3 Reasons Why Peer-To-Peer Lending Should Be In Your Portfolio 

5. Annuities

Annuities are a fixed and regular sum that insurance companies pay to you for the rest of your life upon retirement. This is an extremely safe way to ensure you have passive income coming every month.

The thing is to ensure that you invest in these products young if you are considering it as the rate of compounding will be more evident. Also, these products are usually meant for people who do not have a very sophisticated understanding of the financial industry and investing.

The last thing to consider is that, and as with any insurance products, surrendering the policy will mean you forego a substantial amount of money which could be disastrous to your retirement plans.

Read More: Understanding A Retirement Product – AXA Retire Happy 

There you have it, five ways to boost your passive income for your retirement. Before we end off, we’d like to tell you about one additional way that you could add to your passive income. And no, we’re not going to sell you anything at this point! In today’s digital age, creating Intellectual Property is fast becoming another way to generate passive income. Whether you’re an app creator, a photographer, a writer or even just a reseller or selling your junk on eBay and Carousell, a digital platform can aid in your accumulation of passive income.

Tell us if you have other ways to earn passive income and continue following us on Facebook

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