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How to Build a Passive Income of S$1,000 per month in Singapore

Building a passive income of S$1,000 per month in Singapore is achievable with a strategic approach and disciplined saving and investing. Before making informed decisions, you need to consider your investment risk, time, and desired rate of return. Here’s a step-by-step guide:

 

1. Start with a Savings Plan

  • Set Aside Capital: Begin by saving a portion of your income each month. Aim to set aside at least 15-30% of your earnings consistently.
  • Emergency Fund: Before investing, ensure you have an emergency fund of 3-6 months’ worth of expenses in a high-yield savings account.

 

2. Explore Fixed Deposits and Bonds

  • Singapore Savings Bonds (SSBs): SSBs are a low-risk investment option with returns of around 2-3% per annum, and they can be a part of your passive income portfolio.
  • Fixed Deposits: While not the highest yielding, fixed deposits offer secure and predictable returns, especially when looking for safe capital growth.

 

3. Leverage CPF Life for Guaranteed Income

  • CPF Life: The CPF Life scheme provides a guaranteed monthly payout for life starting from age 65. By maximizing your CPF contributions, especially to your Retirement Account (RA), you can secure a significant portion of your passive income in retirement.
  • Retirement Sum: The amount of monthly payouts depends on the retirement sum you have set aside. Aim to achieve the Full Retirement Sum (FRS) or Enhanced Retirement Sum (ERS) for higher payouts.

 

4. Utilize Robo-Advisors

  • Automated Investing: You can explore platforms that allow you to invest in a diversified portfolio with minimal effort. They offer tailored portfolios based on your risk tolerance and goals.
  • Consistent Contributions: Regularly contribute to your robo-advisor account to build your investment over time.

 

5. Invest in Unit Trusts

  • Unit Trusts: Consider unit trusts that focus on income generation, such as those investing in global dividend stocks or bonds.
  • Goal: To generate S$1,000 monthly, you’ll need to accumulate approximately S$200,000 in unit trusts yielding an average dividend of 6% annually.

 

6. Real Estate Investment

  • Rental Income: If you have more capital, consider investing in a rental property. A well-located HDB or condominium unit can generate monthly rental income, though initial costs are high.
  • REITs vs. Direct Property Investment: If direct property investment is too costly, REITs offer a more accessible alternative with lower capital requirements.

 

7. Create and Sell Digital Products

  • E-books, Online Courses, or Apps: If you have expertise in a particular area, creating digital products can provide a steady stream of passive income.
  • Minimal Upkeep: After the initial creation, digital products require minimal ongoing maintenance, making them a good source of passive income.

 

8. Build & Monitor a Dividend Growth Portfolio

  • Focus on Growth: Invest in companies with a history of increasing dividends. Over time, the compounding effect can significantly boost your monthly income.
  • Reinvest Dividends: Reinvest your dividends to buy more shares, accelerating the growth of your passive income.
  • Regular Reviews: Assess your portfolio’s performance every 6-12 months and rebalance it if necessary to stay aligned with your income goals.
  • Diversification: Ensure your investments are diversified across different asset classes to reduce risk.

 

What’s Next?

Building a passive income of S$1,000 per month requires time, patience, and disciplined investing. Start small, stay consistent, and leverage the power of compounding to grow your investments.

If you are unsure of which investment type is suitable for your risk profile, send your enquiry to my WhatsApp (+65 8680 2340) or email (lidwinateo@fapl.sg). I will provide a personalised financial proposal for you.

Look forward to your message!

 

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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  • It does not take into account the specific investment objectives, financial situation or particular needs of any particular person.
  • 此类文件和信息不会把-个人投资目标，财务状况或其特定需求等考虑在内。
  • It does not constitute the making available of, or an offer or solicitation by FAPL to buy or sell or subscribe for any such capital markets product or to enter into a transaction or to participate in any particular trading or investment strategy nor an advice or a recommendation with respect to such financial products.
  • 鑫盟理财向该人士提供此类文件和信息将不构成要约或招揽购买或出售或认购任何此类资本市场产品，或达成交易或参与任何特定的投资策略，也不构成有关此类金融产品的建议或推荐。
  • These documents may not be published, circulated, reproduced or distributed in whole or in part to any other person without FAPL’s prior written consent.
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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