Possible to earn passive income without investing in stocks?
 

As above :(

Many many friends and relatives who invested in stocks and were burnt badly in 1997 and 2008. So I don't dare :(

Can't even dream of renting out property :(

Money never enough, how? :(

Passive income is a misnomer. All Passive income still require some upfront work and risk taking (eg. if investing in stocks, property and business). I have a few friends who wrote books and earn a little royalty from their book sales. But these royalty income are pittance unless you can write great novels or books that are required texts used in schools. And it takes quite a bit of effort to write those books.

So first all, perish the thought about receiving income without effort. Even to interest from Fixed Deposits (FDs), you first need that deposit - money which comes from somewhere which is very likely to be from work and savings.

For myself I do have the following sources of "passive" incomes:

1. Interest from FDs and Bonds - around $20,000 a year
2. Dividends from shares - around $60,000 a year (before the Covid crisis)
3. Rental income - $36,000 a year (gross, ie still need to deduct the condo fees, property tax, income tax etc...)
4. Interest earned in CPF OA & SA - $29,000 last year (I am above 55 yo, so I could withdraw this interest if I choose to)

To reach the above stage, there was a full 30 years of working, saving and investing. It is all active and hard work. And there is quite a bit of risk taking except for FDs and CPF which are secure.

So if you were to look at my situation now, you would only see the above income as "passive". And you are not entirely wrong but it would be wrong to ignore the hard work and risk taking that it took to build this up.

Having said that, it does feel very good and satisfying to be receiving these other incomes over and above your salary income. At this quite mature and established stage, you will also notice that your wealth growth rate increases. Your networth grows faster.

So you need to have right mindset (mental model) about "passive" income. You need to be prepared to do a lot of "heavy lifting" upfront. Once that this is in place, you can then sit back, "chillax" and enjoy the 'fruits". Good luck.

Didn't know boomers visit these forums too, good write up tho

Hi, could you share more on your online shopping mall? Thank you!

I have been jodless for nearly 1 year, I got no marnee :(

Even buy clothes got to think 3x :(

$500 minimum for the ssb ish too much to swallow for me :(

Never heard of Stashaway, will look at it, thanks for sic :(

You are very right. The problem is, I really don't understand even simple finance concepts :(

That's why I'm trying to think of simple ways to earn income that don't require so much thinking :(

Hence why I said I dare not invest in stocks, I'm very very afraid of making the wrong call. My parents themselves lost 6-figure sum playing stocks in 2008, despite attending many courses and having a stocks adviser :(

Are chiu in 20s-30s? If so, what's your side income strategy? :(

Hi, I'm the OP, yes I'm 25.

Based on what you have provided so far best for you not to touch investments as you have neither capital nor knowledge/mindset. You should focus on increasing your income first. The market crashes from time to time but if you stayed invested throughout you would have made money.

My side income strategy is investing and tutoring. Since I only just graduated, I'm slowly building up. Current investment side income only $100 per month dividends.

Is chiur name Imran or Dominic? :(

No wonder you're so pushy.

No thanks.

If you're very risk averse, can consider parking your money in CPF or in high quality bonds. Bonds are generally considered as safer than stocks (but not entirely risk free!). Tradeoff is that returns are also correspondingly lower.

If you are OK with moderate risk taking and have a long investment horizon (10years and up), suggest you can explore Dollar Cost Averaging (DCA) into low cost index funds. Simple, fuss-free and doesn't require much effort in monitoring.

At the end of the day, your returns are proportional to the amount of risk you are willing to take.

Thanks for your advice I scared scarli buy bond then end up like hyflux :(

What is long investment horizon? :(

You can look at the Singapore Savings Bonds issued by SG govt, can apply through Internet banking. Or you can look at buying A35 Bond etf from a broker, which is a basket of bonds issued by govt and govt-linked entities e.g. HDB, LTA etc. Sg govt quite unlikely to uplorry anytime soon, unlike Hyflux. But of cos, low risk = low returns la.

But got to be aware that during this period, bond returns will be quite low cos everyone is pulling out of equities. For eg. SSB returns are at about 1%/yr now. It was at 2+% if you bought it a year ago.

Long investment horizon equals 10years or more.

There are many financial products, but the 'least intimidating' way to start off investing in stocks is to buy those listed on the SGX. Of course every investment has risks and you decide how much risk you can stomach. To me this is least intimidating because the process is clear cut and the chances of you being 'cheated' is very low.

1. Take the sgx modules necessary to open a CDP account.
2. Open an account with your chosen brokerage firm (DBS vickers, UOB, etc)
3. Buy your stocks via your brokerage firm app.
4. If you are keeping for long term, the stocks must be delivered to your CDP within 3 days and they are under your name.
5. Profit / Loss depends on when you sell, and the only fees you pay are to your broker, GST and clearing fees to SGX.


This is a good time to think about buying stocks because most of them have lost a 25 to 30% of their pre-covid value. People say the 'safer' blue-chip stocks are majority owned by Temasek, like Singtel. Not saying that just because there is Temasek, your investment is totally safe. If for some reason they decide to bail and sell off, the value will likely plunge. However, if there is one thing I have learnt from observation, bad times dont last forever.

Which leads me to your parents losing a lot and you are afraid of 'playing stocks'. My take on why many people say or have parents who 'lost a lot' is they probably bought expecting prices to go up, but panicked and sold off when the stock prices plunged in times of crises.

A more rational response would be to evaluate whether the company can weather the crisis and grow in future and if you can hold off cashing out for a few years. Using Singtel as an example, chances of it collapsing are very slim and yes there are competitors, but even if its price plunges for the whole of this year and longer, I am confident it would recover. And it did indeed recover from its ~ $3.50 plunge to ~ $2.50 in 2008, although over the next decade.

To be frank though, there is no way you can live off dividends investing in SGX stocks unless you have a lot of money lying around, which from your post seems unlikely.

Got to take modules before can open a CDP account?! :(

Very difficult to study for or not? :(

My maths CMI one :(

Bloody hell, I hate link builders like you, especially when you guys write WOT :mad:

Go find a proper job :mad:

You another one, don't know how to read is it? :mad:

I said money not enough, how to buy property? :mad:

My blunt advice is forget about passive income. Go spend 100% effort on getting a job, and a job you can do well in.

Passive income is for people who have leftover savings from income, and want to know how to grow that savings. The limiting factor for you is job income, not how to invest.

what we are looking for is financial freedom. which means passive income is greater than active income. Currently, my passive income is greater than my full time job. I have found the tool to create this passive income for myself and those who are closest to me. Those who are interested in generating your own passive income, drop me a message and i will share more. Cheers!

Have u considered an alternative as to investing in wine as an asset which is still a relatively new concept, well at least in Singapore, hence it is seldom discussed.
Good news is that many major financial advisors are recommending fine wines as investments to their clients.
Even companies like Morgan Stanley are encouraging investors to diversify with wine, reason being it is a stable asset, regardless of the geopolitical, cultural, and economic challenges that equity market investors are likely to face.
When we speak of investments, what comes to your mind first?
Stocks bonds equity.
Alternative investments? Antiques, watches, vintage cars, paintings, which I can safely say caters to the well-heeled individuals.

Introducing fine wine, quite simply plays on a different field to these types of investments, with a relatively low-entry cost.
While stocks can rise and fall for any reason, including a simple Tweet by a prominent politician, the value of fine wine is determined by plain old supply and demand.
Demand for fine wine around the globe is rising, especially as more developing countries develop a taste for luxury products.
The fact that wine has been a popular product for millennia is a testament to its stability in uncertain economic conditions.
I could go on and on about the advantages but a quick google search will do the deed if you are keen.

Fine wine investment has virtually zero correlation with the stock market, making it stable even during times of economic uncertainty. During the recession of 2007/8 the S&P 500 plunged 38.5%. In contrast, the Liv-ex 1000, the market-leading index for fine wine, dipped by just 0.6%. The same pattern emerged in March 2020 when the S&P 500 fell by 25% while the Liv-ex 1000 slipped barely 4%.

sign me up

I am interested to know more.

What a load of rubbish. Investing in stock without doing research is downright gambling. And if you do tons of research then it is not "passive".