EARN A SECOND INCOME
Without lifting a finger
EARN AS YOU SAVE. Everyone needs emergency funds. Constance Lim, an independent financial adviser who also volunteers as a financial education trainer at the Association of Women for Action and Research, recommends a year’s worth of your daily expenses. Put your money in a savings account that offers tiered interest rates – you earn higher interest the more you save.
But she says this can’t be your main source of passive income. “Our inflation rate is generally pegged at two to three per cent annually. And
MAKE YOUR BLOG WORK FOR YOU. Use your blog – or create one – to earn spare cash through Internet marketing. Sandy Jadeja, a wealth coach from London and speaker at the recent A Good Life! Wealth Creation Workshop, says it’s one of the easiest ways to make money online. “For instance, if a popular blogger commands a readership of
40,000 a day, companies can pay a fee to place an ad or create a link to their own website, on this person’s blog. If you have multiple ads, that’s a good steady stream of income.”
It isn’t expensive (it starts from $10 a year) or hard to register your own domain, although building a strong online presence can take up to a year or more of consistent blogging and self-advertising. Designing a good website also requires time and effort. BUY AN INVESTMENT PROPERTY. This might not be affordable for most of us, but Constance says you should still keep it in mind. “Rental income is one of the surest and safest ways of earning a second income. But you need to build your investment nest egg first as the capital outlay is huge. When the opportunity arises – and when property prices dip – you can look into this option.”
… Blue-chip companies If you’re new to investing, it’s “safer” to invest in listed companies on the Singapore Stock Exchange. Better
“It’s okay to make some mistakes when you start out. That’s why the money you use should be money you’re prepared to lose.” – Constance Lim
yet, invest in blue-chip companies.
Constance says: “These are companies that are important to the economy and deemed financially sound. They face little price fluctuation and don’t tend to go belly-up when the economy is down. They generally grow with the economy too.”
When an economic crisis hits, share prices of blue-chip companies may take a beating – which is a good time to buy before they pick up again, says Constance. “But blue-chip stocks sell at a minimum of one lot of 1,000 shares. So if one share costs $16, you’ll need to fork out $16,000 to make an investment.” She suggests looking at banks that offer investment-savings plans to buy into blue-chip stocks – from as little as $100 a month. … Unit trusts To immediately build a diverse portfolio, buy unit trusts – a basket of stocks professionally picked and managed by fund managers. These can include government bonds, stocks and other financial commodities.
Constance says: “This is a relatively low-risk investment with safe returns, which requires almost zero monitoring on your part. It’s cheaper than buying individual stocks, but you may need to account for other costs – management fees you pay to your fund manager – which may eat into your returns.” … Exchange-traded funds (ETFs) These are funds that invest in a stock market index. “Your returns will mirror however much the stock market index is worth. ETFs are cheaper to buy than unit trusts because your fund managers don’t need to study and pick the stocks to beat the market index, but they pay you less in dividends,” says Constance.
in a low interest rate environment of 0.5 to 1 per cent, leaving your money in the bank won’t earn you enough to keep up with inflation over time.”