Money saving
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4 Truly Passive Income Streams the Average Singaporean Should Be Taking Advantage Of
source:
http://blog.moneysmart.sg/invest/4-trul ... antage-of/
Having a steady stream of passive income sounds like a dream, because it effectively means you get to earn money for doing nothing.
Unfortunately, many people who claim to be able to generate passive income aren’t exactly being as passive about it as they let on. For instance, many webmasters and bloggers claim to earn passive income through their sites but fail to mention that they spend tens of hours each week writing blog posts and analysing site traffic.
Stock or forex day traders might make it sound as if they’re making money out of nothing, until you realise they spend hours in front of the computer each day with their hearts in their mouths. If you have a day job and are unwilling to commit too much time and effort into making passive income, here are some ideas that require minimal effort.
1. Rent Out a Room
If you’ve got enough money to buy multiple properties, you could probably just become a landlord by trade and stop working altogether, living off your rental income. On the other hand, even if you’re not exactly Mr Moneybags, you might still have the opportunity to rent out a room or two in your existing home. A friend of mine even volunteered to sleep in the living room so he could rent out his bedroom for the spare cash.
If you’ve got some money to invest you might want to consider purchasing commercial property (which is often cheaper than residential), either on your own if you can afford it or together with friends or relatives. While it does take a bit of effort to view potential properties and deal with tenants, with the help of an agent your effort can be kept minimal.
2. Buy Dividend Stocks
Making money off the stock market isn’t something that yields fruit immediately, and prudent investors often find themselves holding on to stocks for years. If you do happen to enter the stock market at a time when the price is right, purchasing dividend stocks can be a good way to obtain a bit of passive income until you finally sell them off.
You will typically receive your dividends on a quarterly or annual basis, and this money can just be credited directly into your bank account. At the same time, monitor the stock prices in case you want to sell your shares at a profit.
3. Credit Card Rewards
Cash back and rewards that banks give you for using their credit cards can be a legitimate source of passive income, especially considering credit cards give you as much as 5% or more on your spending. The beauty of credit card rewards is that you don’t even have to be spending on your own stuff to qualify for the rewards. Pick up the tab at a restaurant meal for a big group and then have everyone else pay you in cash, and you get cash back on the entire sum.
The same goes for ordering stuff online together with a large group of people. And when it comes to big ticket items like wedding banquet reservations or air tickets, you can get significant amount of money back.
Here are some of the most generous cash back credit cards on the market.
•OCBC FRANK – 6% cash back on online purchases including air tickets (maximum of $60 cashback a month) – apply here.
•American Express True Cashback Card – 5% cashback on unlimited spending in first 3 months, 1.5% cashback on unlimited spending thereafter – apply here.
•ANZ Optimum World Mastercard – 5% cash rebates on one category of your choice (dining and leisure / travel / shopping / groceries) each quarter, 1% cash rebate on everything else – apply here.
4. Bank Interest
The banking interest rate in Singapore is notoriously low, especially if you stick with the default POSB / UOB savings account that yields a negligible amount of interest each year. However, if you do your research, you will find that there are a number of high interest bank accounts that give you interest rates of up to 2%+. With a 2% interest rate, you would be getting $2,000 a year for every $100,000 deposit.
Check out this article elsewhere on MoneySmart for an overview of some of the better high interest savings accounts in Singapore. Of course, which one you ultimately pick depends a great deal on your income and your banking habits. Still, once you go to the trouble of opening the account, the only thing you have to do is sit back and collect your interest payments. -
Following
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$1.38m - that's how much you need to retire: Online poll
Saving for retirement is the top priority among affluent Singaporeans, well ahead of putting cash aside for a rainy day and education, according to a recent online poll.
It found that the ideal retirement nest-egg is estimated to be about $1.38 million, although respondents varied in how they arrived at this figure. About 55 per cent sought professional financial advice before investing while 13 per cent derived it from the media.
But around 25 per cent relied on guesswork, which is \"alarming\", said Mr Chris Gill, general manager, Southeast Asia at Friends Provident International, which conducted the poll in May of around 500 affluent and aspiring-affluent investors in Singapore and a similar number in Hong Kong.
It defined affluent here as having $200,000 to $1 million in investable assets while those with $80,000 to $199,999 were deemed \"aspiring affluent\".
Mr Gill noted: \"Our view is that there is a tendency to underestimate the amount needed for retirement even among the well-off.
\"Aside from the high costs of living, longer life expectancy and increasing costs in medical bills, the impact of inflation is another important aspect for consideration.\"
He stressed the importance of speaking to a professional financial adviser to gain a better understanding of financial planning needs.
There is still much work to be done. The survey found that 80 per cent want to do more outside of their CPF savings for their retirement plan, while nearly 60 per cent indicated that they were not saving enough for retirement even when factoring in non-CPF savings.
Only 40 per cent of the respondents here were confident about saving enough for retirement, higher than the 18 per cent of the respondents in Hong Kong.
The survey found that 66 per cent of respondents said they did not feel financially secure while 57 per cent felt they were not savvy about investing and related areas.
The findings were similar in Hong Kong, where the average retirement goal of the well-off was $1.65 million. They are also more prepared to take a chance, with 26 per cent opting for high-risk and high-return products compared with 11 per cent in Singapore.
Still, a balanced investment strategy, with a mix of potentially high- and low-risk products, is preferred by individuals across Singapore and Hong Kong as a means to achieve better, safer returns in the long run.
source: http://www.straitstimes.com/business/13 ... nline-poll -
How can having 200K to 1 million investable assets mean affluent??? Many affluent around liao…
Something wrong with the research… -
Is $1.38 million meant for only 1 person?
Its good to have $1.38 million but I don’t think so much is required for retirement unless you plan to retire at 30 years old.
JMHO!!! -
As the survey is conducted by Friends Provident International, part of the Aviva Group, the motive may be to get the affluent to contact them for financial planning and advice on retirement planning. The estimated sum of $1.38 mil will put retirement out of reach for many…
IMHO, if one is willing to change the lifestyle, for example, to cook and eat more at home, cut down on expensive holidays, and clear the car and housing loans before retirement, the retirement expenses could be kept low at less than $3,000 per month. Assuming that one retires at 67 and can expect to live to 82, that should still come to less than $1 mil even with an annual inflation of 3%.
I started planning for my retirement in my late 20s and hope everyone can do their best and not take things for granted. To be safe, the anticipated support from our children should be excluded. -
lee_yl:
I started planning for my retirement in my late 20s and hope everyone can do their best and not take things for granted. To be safe, the anticipated support from our children should be excluded.
Gd advice!
Any extra money fr gahman or children will be a bonus but let us take them out of our equation of retirement planning at this moment. -
starlight1968sg:
It should have never been in the equation as they are variables. I started saving for retirement in my mid 20s. Can relax a bit more now already. No longer stressed about money.lee_yl:
I started planning for my retirement in my late 20s and hope everyone can do their best and not take things for granted. To be safe, the anticipated support from our children should be excluded.
Gd advice!
Any extra money fr gahman or children will be a bonus but let us take them out of our equation of retirement planning at this moment.
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