Beginner’s Guide on How to Make Passive Income in Singapore

Have you ever wondered what life would be like if you didn’t have to work for every dollar you earn? That is where passive income comes in. You have probably come across many “digital marketing” gurus preaching about making money while you sleep. But is that really true?

As a born and bred Singaporean and having been an entrepreneur since 2023, I have tried out several ventures, and I want to help set your foundation straight. By the end of this post, you will know exactly what passive income is and how to get started as a beginner.

In this article, we will go through how to make passive income in Singapore.

What is Passive Income?

Before we get into the nitty-gritty and actually help you get started with passive income, it is important to understand what exactly passive income is.

There are three types of income: active income, passive income, and portfolio income (or what I like to call investments).

Active Income 

This is what most of us are familiar with. It is when you trade time for money — think of your 9-to-5 job, freelancing, or running a business that requires your constant involvement. If you stop working, your income stops too.

Passive Income

Passive income, on the other hand, requires a lot of upfront work where you need to trade your time for money. However, as its name suggests, the money will become passive over time. This is something you work hard on at the beginning, but it doesn’t require much effort to maintain in the long run.

Portfolio Income

Portfolio income is income earned through investments, like dividends from stocks, crypto, T-bills, bonds, or rental income from property. You are still “making money work for you,” but it is not the same as passive income. It doesn’t require hard work upfront or need you to trade your time for money. You invest a significant sum at the beginning, go on with your life, and let the money bring back “friends.”

Why Create Passive Income Streams?

Now that we have sorted that out, you might be wondering — why bother creating passive income streams when you already have a job that pays the bills? Well, let’s look at some benefits:

• More Free Time: With passive income, you get to spend more time doing what you love — whether it is pursuing hobbies, spending time with family, or travelling around the world.
• Financial Security: Passive income is a safety net. If you ever lose your job, these income streams keep you afloat. And yeah, with what is going on with the economy, a recession is bound to come, and it never hurts to have a Plan B to support yourself and your family.
• Achieving Financial Freedom Faster: With multiple streams of income, you get closer to your goal of financial freedom and might even retire early.

Why Passive Income is Important in Singapore?

In Singapore, the cost of living is one of the highest in the world. Between housing, food, and just getting around, money flies out of our wallets faster than you can say “EHHHHH.”

Passive income can be a game-changer, helping you keep up with rising costs, save for the future, and build the comfortable lifestyle that you desire.

Types of Passive Income in Singapore

There are plenty of passive income streams you can explore in Singapore. Let’s dive into a few popular ones and see which suits you best!

1. Affiliate Marketing

First on the list is affiliate marketing, where you earn commissions by promoting other people’s products or services.

Basically, you sign up for an affiliate program (e.g., Shopee, Amazon), get a unique affiliate link, and share it through your blog, YouTube channel, or social media. Every time someone clicks on your link and makes a purchase, you earn a commission. Cha-ching!

Even if you are based in Singapore, it doesn’t limit which affiliate programs you can sign up for as long as you have an audience you can share with.

Setting Expectations: Affiliate marketing is not a get-rich-quick scheme. If you don’t have an existing audience base, it may be hard to hit your income goals from this stream. But that doesn’t mean you can’t start. Pinterest is a popular channel for people who want to go into affiliates but have no audience when they first started.

If sales are your thing, affiliate marketing may just be it.

2. E-commerce

Second on the list is e-commerce. E-commerce is all about selling products online, and you don’t have to stop at physical goods. Digital products and print-on-demand (POD) items are great ways to make passive income without needing to manage inventory.

In Singapore, platforms like Shopee, Lazada, and even Carousell are popular. But to expand your reach, think globally with platforms like Etsy or even selling on platforms like Teachable, Stanstore, or Beacons (where you have to drive the audience there yourself).

I have personally tried Etsy for digital products, and it is a fantastic way to promote your products to an international audience. (Singapore is way too small; think big!)

Resource for you: How to sell on Etsy in Singapore with 5 simple steps?

While it is possible to start an e-commerce store with zero knowledge, having these skills can be an added advantage:

• Design skills — Especially if selling digital products/POD, creating viral designs that people love can be a game-changer.
• SEO — This will be your best friend for bringing customers to your store without promoting it actively.
• E-commerce experience — Prior experience in your corporate role can help you with site merchandising, pricing, and promotion strategies.

3. YouTube Channel

Starting a YouTube channel is another great option for building passive income. YouTube pays you based on the number of views your videos receive and the ads displayed on them. You can also earn through sponsorships and affiliate links.

That being said, YouTube does have monetization requirements. You need at least 1,000 subscribers and 4,000 hours of watch time in the last 12 months, or 1,000 subscribers with 10 million valid public Shorts views in the last 90 days to start earning from ads.

This means you will need to put in effort at the start to meet these requirements. However, once you have established yourself and built a consistent audience, the money will continue to flow, allowing you to focus on creating content more consistently over time.

I know what you may be thinking: “Isn’t this way too tedious?” Yes and no. If you love filming, a simple YouTube channel focused on vlogging or romanticising your life might come naturally to you. If you love to travel, consider creating travel vlogs. Since you are already filming during your travels, this can be a breeze! Or, if you are an expert in your field and like sharing opinions, consider reaction videos or reviews, which are also low-effort options.

Your videos don’t necessarily need to be educational or involve heavy video editing. Think outside the box and choose a format that suits you.

Also, you definitely don’t need a fancy setup. Start with your phone, a basic mic, and good lighting. As your channel grows, you can upgrade your equipment.

4. Blogging

Blogs are another fantastic way to earn passive income. There are several monetization options for bloggers:

• Display Ads: You can earn money by allowing ads to be displayed on your site. Just scroll through this article, and you will see them. Starting out, you can sign up for Google AdSense, and as your traffic increases, switch to ad networks like Mediavine for higher RPM (Revenue Per Mille).
• Affiliate Marketing: When you are just starting, affiliates will likely make up most of your earnings. You basically promote products through your blog posts using affiliate links.
• Sponsored Content: As your blog becomes more established, brands may reach out to collaborate on sponsored posts, providing another source of income.
• Selling Your Own Products: Use your blog as a platform to sell eBooks, courses, or merchandise.

In the long term, blogging can be a highly rewarding passive income stream. However, you need to be aware that blogging requires patience and is more about delayed gratification rather than instant results. You may see little progress at the beginning, but when things start to pick up, you will realize it was all worth it (speaking from experience!).

Blogging requires consistent effort in creating content and understanding SEO. SEO is everything when it comes to ranking high in search engines. If you are interested in blogging, I have written a Step-by-Step Guide to Starting a Blog to help you get started.

If you are feeling a bit overwhelmed with all this information, don’t worry. Start by figuring out your existing skills and knowledge with a simple 10-minute exercise. From there, choose the type of passive income that aligns best with your strengths.

And remember, start small and build from there.

This article highlights how to make passive income in Singapore.

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