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9 Ways to Generate Passive Income in Singapore (Learn this before anyone else!)

Singapore may be small and warm, but when it comes to making money, it’s certainly enticing! Here are 9 ways to generate passive income in Singapore that can help boost your earnings. 

 

1. Property Rental

Being a landlord can be highly rewarding. In Singapore, rental yields, especially for HDB flats, are quite attractive. For example, a flat in Punggol purchased for SGD 500,000 can rent out a single room for SGD 1,000 or the entire flat for SGD 3,600, giving a rental yield of 8.64%. Despite additional costs like property maintenance and taxes, many in Singapore opt to rent out spare rooms for extra income.

 

2. Stock Dividends

Singapore’s stock market offers various options, including local, Hong Kong, US, and Australian stocks. Stocks like DBS Bank provide stable dividends yielding around 5.4%. Unlike US dividend stocks, dividends from Singapore stocks are not taxed, making them an excellent choice for passive income.

 

3. Real Estate Investment Trusts (REITs)

With tighter property purchase regulations and additional stamp duties discouraging foreign buyers, REITs have gained popularity. Singapore ranks third globally in the REIT market. REITs offer regular dividend payouts, either quarterly or semi-annually, and are favoured by local investors for their stable returns.

 

4. Dividend-Paying Funds

For those preferring consistent cash inflows, dividend-paying funds are ideal. Some funds provide monthly dividends, with good ones yielding up to 8% annually. However, the principal value can fluctuate, so timing your entry is crucial.

 

5. Investment-Linked Policies (ILPs)

ILPs offer a solution for those uncertain about market volatility and timing their investments. They provide access to funds typically reserved for high-net-worth individuals, along with attractive start-up bonuses that cushion market fluctuations. Regular contributions of small amount from your income can build a substantial fund over time. Modern ILPs are flexible, allowing partial withdrawals and premium holidays.

 

6. Private Equity Investments

Singapore hosts numerous private equity funds, known as alternative investments. These are typically independent of market trends and available to high-net-worth individuals, with minimum investments starting from SGD 100,000. Thorough analysis is essential before opting for these investments.

 

7. Central Provident Fund (CPF)

CPF is a significant retirement asset for Singaporeans, comprising the Ordinary Account (OA), Special Account (SA), and Medisave Account (MA). OA earns 2.5% interest, while SA and MA earn 4%. While previously popular for topping up due to attractive SA rates, the government’s 2023 decision to close SA accounts after age 55 has reduced incentives for additional contributions.

 

8. Savings Insurance

Singapore offers savings insurance plans in SGD and USD, featuring options for dividend payouts or partial withdrawals. SGD plans generally offer lower returns due to investment restrictions, whereas USD plans are less restricted with higher returns. Popular providers include Singlife, INCOME, and AIA.

 

9. Cryptocurrency

Bitcoin has seen a resurgence, capturing attention from the crypto community and drawing new investors. Although highly volatile and speculative, Bitcoin can yield significant returns. For cautious investors, Bitcoin ETFs, funds, or private equity options are available.

 

Conclusion

Singapore presents a wide range of passive income opportunities, from property rentals and stock dividends to sophisticated options like REITs, ILPs, private equity, and cryptocurrency. Exploring these avenues can diversify your income streams and enhance your financial stability.

If you need professional financial advice to build your passive income in Singapore, contact me now to discuss over a coffee or request a personalised proposal.

Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

Published By:

Lidwina Teo 维娜

With over 5 years of experience in client service industries, I come to understand and appreciate the importance of high-quality customer service and customer experience. The key is to always prioritize the best interests of customers, ensuring their needs and expectations are met with professionalism.

The passion for client service extends into my current role where I strive to deliver personalized financial planning services. With more than 150 business partners in our company, I can help you achieve your financial goals by analyzing various financial products and offering tailored financial advice. 

Contact me now to request for a quotation or schedule a coffee session for further discussion. See you soon!

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  • Financial Alliance Pte Ltd ( “FAPL”) is licensed by the Monetary Authority of Singapore (“MAS”) and allowed to conduct financial advisory activities in accordance with the Financial Advisers Act (Cap. 110) (“FAA”) and the Securities & Futures Act (Cap. 289) (“SFA”) within the jurisdiction of the Republic of Singapore and in accordance with the licenses granted by MAS
  • 鑫盟理财私人有限公司( “鑫盟理财”)持有由新加坡金融管理局(“MAS”)所颁发的牌照，并许可在新加坡共和国境内依据财务顾问法（第110章）和证券与期货交易法（第289章）进行财务咨询等相关业务
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In compliance with the Personal Data Protection Act, Financial Alliance Pte Ltd (“FAPL”) seek your consent to collect and use your personal data (e.g. name, NRIC, contact numbers, mailing addresses, email addresses and photograph) for the purposes of and in accordance with FAPL’s Data Protection Policy, which can be found on FAPL’s website at https://fa.com.sg/data-protection-policy/.

根据《个人数据保护法》，鑫盟理财私人有限公司征求您的同意向您收集并使用您的个人信息。鑫盟理财将根据公司的个人数据保护政策所阐述的用途使用您的个人资料（例如姓名，证件号码，联系电话，邮寄地址，电邮地址和照片）。 该政策可在本公司网站上查寻，网址为 https://fa.com.sg/data-protection-policy/.

By submitting this form, you are deemed to have read and understood FAPL’s Personal Data Policy.

提交此表格，即表示您已阅读并理解鑫盟理财私人有限公司的个人数据政策