passive income singapore

Best Ways to Earn Passive Income in Singapore this 2022

Nowadays, many Singaporeans have become more aware and cautious of handling and growing their finances. Yet, knowing that time is more valuable than money, they’d want ways to grow their money without wasting precious time. An excellent and appealing way to do this is through building a passive income.

Passive income has become a sought-after approach to building wealth and escaping the paycheck-to-paycheck lifestyle. It could also be the end to a non-rewarding 9-to-5 job for some by securing retirement funds earlier. In reality, it is also one of the affluent’s ways to grow their assets and become even more prosperous.

So, If you want to work less and make more, then this post is for you. We’ve listed the best and easiest ways for you to earn passive income in Singapore this 2022.

Things to Consider Beforehand

Creating new income sources involves careful consideration to ensure that your investments and plans yield successfully. While there are many ways to generate passive income, finding the perfect fit is not easy.

So, before heading to that, let us look at the many essential things to consider when building your passive income portfolio.

1. What Are Your Skills And Resources?

Building a new source of income stream will also require some skills and resources. With passive income, initially, you will need to invest in monitoring and updating resources you plan to use in the process.

An example of sources that will need skills is the creation of digital products like e-books, templates, and courses. On the other hand, some that will require resources are income, stocks, and real-estate investments. Read more on how to invest in Singapore.

2. How Much Time Will This Require From You?

In the initial stages, building the source will take some time. But, once built and established, it won’t consume much time. Additionally, you can find many ways to make a passive income stream online. This method is perfect for those who want to build one that is not location-dependent, further allowing you to save time on travel.

3. How Much Effort Will This Require From You?

Unlike a conventional job that requires full attention, you don’t need to sweat it hard to generate passive income. Usually, this type of income requires little-to-no effort and can earn you money while you sleep.

4. How Much Upfront Capital Will This Require From You?

The upfront capital will depend on your chosen source of passive income. If you already have properties you plan to rent out, you don’t need not spend much on capital. However, if you invest in stocks to earn dividends, you’ll have to invest a certain amount of money to buy some shares.

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How To Earn Passive Income In Singapore

Earning income while sleeping or doing nothing sounds like a dream. But anyone can make it happen with the proper knowledge and serious commitment. And, if you’re looking for great ideas with minimal effort to earn more money, you’re in the right spot. Below are some proven ways to build passive income in Singapore:

1. Start A Dropshipping Store

Many Singaporeans use the internet to search and shop for products, making online selling and advertising through social media a big trend. With this, sellers found dropshipping an excellent alternative way to do online business and earn money.

One advantage of dropshipping is that you won’t have to invest in a physical inventory of your products. This business model involves e-commerce, and your primary role is to market and sell orders. On the other hand, your supplier will take charge of the stocks and the packing and delivery of orders.

Other benefits from choosing dropshipping as a way to earn are:

  • Low start-up costs
  • Low overhead expenses
  •  Location-independent business
  • Easy-to-scale business

You can also start your dropshipping business with only a few easy steps.

  1. Find a niche and dropshipping suppliers. Choose a reliable supplier that can cater to the market’s demands.
  2. Build an e-commerce store from a reputable hosting platform. Some popular platforms in Singapore are Shopify and Oberlo.
  3. Market and sell to potential customers. Focus on building a customer base, market your products, and close sales.
  4. Pass the sales order to your supplier for fulfillment. Usually, the supplier will also handle customer service concerns and product returns.

Singapore’s e-commerce market revenue is projected to reach US$ 7,293M this year. With Singapore’s flourishing growth in e-commerce, now is the right time to engage in dropshipping.

2.  Invest Your Money In Dividend Stocks And Mutual Funds

You can also generate passive income through a dividend portfolio or a mutual fund. And for those with capital to support, these could be the simplest ways to generate an income passively through dividends.

  • Dividend-Yielding Stocks

By purchasing stocks, you will regularly receive cash or dividends from these. These dividends are instantly credited to your bank account. You can also choose to withdraw shareholders’ dividends or re-invest them to get additional shares and earn more through compounding interests.

To protect your investment, choose blue-chip stocks from top companies with good records of paying out to investors and high dividend yields. You also need to pay attention to the economic trends as this could also affect prices in the stock market.

  • Exchange-Traded Funds (ETFs)

ETFs are an excellent alternative to individual stocks and a perfect fit for busy lifestyles. ETFs track the market as a whole and are a safer choice for those who cannot commit to studying and monitoring individual stocks.

To start, you’ll just need to invest a lump sum and find a bank that can do the work for you. Note, however, that while ETFs are more passively managed, they can earn lower fees than individual stocks.

Still, both these types of income investments will require you to monitor performance from time to time. Watching the prices will also be helpful if you want to buy or sell your shares at any time.

3. Buy High-Quality Bonds

Bonds come with lower risk factors than stocks and funds mainly because of market volatility. With bonds, the borrower will pay you back a fixed interest amount after a specific time, depending on the agreement.

Singapore Savings Bonds (SSB) is the best example of a high-quality bond. With SSB, you’d be signing a contract with the most credible institution in Singapore, which is the government. Thus, there is a zero risk of getting defaulted.  It also guarantees the total return of capital which you can withdraw anytime with no penalty.

Indeed, government bonds like SSB provide Singaporeans with a safe and flexible option to passively grow their money. Bonds are issued every month through the Monetary Authority of Singapore (MAS). The holding period is ten years, and the minimum investment is S$500.

SSB provides an opportunity for income investing and allows you to focus on generating income from your investments. However, income investors tend to find other sources to consider because of low rates.

4. Deposit Your Money With High-Yielding Savings Deposit Accounts

Bank interests can also earn you passive income. However, your savings accounts usually only yield small interest amounts depending on your bank. These interest rates are so low that you can’t even consider them a reliable source of passive earnings.

Some banks could get you as high as more than 2% if you research further. However, this method is only beneficial for those who have considerable amounts in their savings account with this rate.

Here are a few high-yielding savings accounts and their corresponding interest rates:

  •       Maybank Save Up – 0.15% to 2.75%
  •       SCB Bonus Saver – 0.21% to 2.38%
  •       BOC Smart Saver – 0.30% to 1.7%
  •       DBS Multiplier – 0.40% to 1%
  •       CIMB Fast Saver – 0.30% to 1%

Additionally, rates will also be applicable under certain conditions, such as minimum deposits or transactions.

5. Create And Monetize On Your Social Media Or Blog Content

Another way to create passive income online is through starting a blog or growing your social media account. You can monetize both by earning from affiliate links, sponsored ads, and selling products and services.

Start by finding an affiliate program and review their program or payment overview. Next, choose products or services that might be relevant to your blog’s content. Affiliate marketers get paid every time they drive a sale through their blog or social media accounts. So, promote affiliate links actively on your site and earn a portion of the sale.

Creating a successful blog site does not happen overnight, and it will require upfront work to generate audience traffic. But don’t worry, as many tools can help you build organic traffic. In no time, you will be enjoying a long-term income stream by just working a few hours or so a month.

6. Buy And Rent Out A Real Property

Like the other methods, buying and renting out property also involves upfront work at the start. Creating passive earnings through a real estate investment can be through:

  • Rental Income

You can earn rental income from real-estate properties by following these steps:

  • Select a suitable property. Choose one that is located in a reputable area or neighborhood. Properties near schools and public transportation are always an ideal choice.
  • Advertise and choose the right tenants. Try to find responsible tenants with an excellent financial background as well.
  • Proper rental management. Includes choosing a reputable insurance company. It also ensures that rentals cover maintenance, renovations, property insurance, and mortgage.

If you play your cards right, your rental income will allow you to have a steady stream for years to come. However, if you start using loan money, you need to be more cautious in handling this type of investment.

  • Real Estate Investment Trusts (REITs)

You can also earn passively by investing in REIT companies. With a REIT, you don’t have to physically purchase and manage the property. Generally, REITs also yield higher dividend rates because they distribute a large portion of their taxable income yearly.

However, REITs are traded like other stocks, so they are also subject to market volatility and fluctuations.

Conclusion

Many of us desire to enjoy a comfortable life without working hard until our senior years. And having additional passive income streams is a great way to achieve this. So, start building your passive income today and enjoy life without having to worry about finances in the future.

Key Takeaways:

  • Creating multiple income streams can give you a sense of security and peace of mind.
  • For beginners, find the right investment fit by consulting financial experts.
  • Income from passive sources has the potential to grow more than regular savings.

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