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Passive Income: 5 Realistic Ways To Earn Money While You Sleep

As American business magnate Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.”.

Indeed, with movements like 1M65 and Financial Independence, Retire Early (FIRE) gaining traction, earning passive income is one of the best ways you can get closer to your financial goals. While making money while you sleep might sound too good to be true, living in the digital era certainly makes this doable.

Of course, you will still have to set up the initial work – and once that’s up and running, you can actually create an income stream while you sleep. Depending on your individual goals, talent, and whether you have any upfront cash for investment. Here are 5 realistic ways you can earn money while snoozing:

1. Being a landlord

In Singapore, the buoyant rental market is still not showing any signs of slowing down. In fact, rents have been rising further in the last quarter of 2022.

If you have an extra property to rent out, it would no doubt be a great source of income. But of course, things aren’t as straightforward in order for this avenue of passive income to work. Firstly, you will have to pay your mortgage, which could be higher than the rent you charge. Additionally, there is also housing insurance and other repair fees required in the event that things break down.

Secondly, you will also require upfront cash to purchase your property, and it may take a while for you to recoup your investment, but this option does not require much work and effort as compared to running an online business for instance.

2. Starting an online business

Starting an online business is definitely a feasible way of generating extra income, and you can even receive orders while you sleep. However, expect competition to be stiff in this digital world. Running a successful online business does require work and effort, and may take a few tries before you can find something you’re passionate about, and helps you make money. While this option sure isn’t for the faint-hearted, aspiring entrepreneurs can use this as a stepping stone to eventually achieve financial freedom.

3. Investing with robo advisors

Robo advisors are digital platforms that provide automated, algorithm-driven financial planning services with minimal human supervision.

With low advisor fees and minimum capital required, robo advisors can be a good way for you to passively invest – since these robo advisors will manage your investments and rebalance your portfolio when needed, all according to your preferences and risk appetite. Robo advisors can also be a good way for you to diversify your portfolio.

However, using a robo advisor also means that you’re not able to customise the investments in your portfolio, since this is up to the algorithm. Further, most robo advisors invest in US and global ETFs (Exchange Traded Funds), which means that your investments are subjected to USD conversion (at spot rate) and currency conversion charges from the broker.

Find out more about robo advisors here.

4. Open a high-yield savings account

With major banks in Singapore increasing their savings account interest rates as a result of the rising rate environment, opening a high-yield savings account can help you make money while you sleep.

If you are a salaried worker, you can consider one of these savings accounts:

Savings accountBase Interest rate
Minimum balance
BOC SmartSaver2.40%S$1,500
DBS Multiplier Account1.80%
No minimum balance requirement until 29 years old (subsequently S$3,000)
OCBC 360 Account2.60%S$3,000
Standard Chartered Bonus$aver3.80%S$3,000
UOB One Account3.85%S$1,000

5. Invest in dividend-paying stocks

A stock dividend is a stock of companies that make regular distributions to their shareholders, generally in the form of cash payments. Dividend stocks can be a useful passive income stream, and the best dividend stocks can also help boost your wealth in the long run.

Like robo advisors, dividend-paying stocks allow you to earn money by investing your money. However, dividend-paying stocks can help you reap better profits if you put in more effort into it. Additionally, dividends allow you to get cash from the companies you buy, whereas you will have to sell your ETFs with robo advisors in order to get the money.

As you do your research into dividend stocks, take note that you shouldn’t invest solely based on yield alone. It’s also important to analyse the stock’s dividend track record and growth rate, along with company fundamentals. You can use trading platforms such as moomoo, Tiger Trade and Webull to invest in stocks.

Making money while you sleep no longer has to be just a dream

You snooze, you lose? Not anymore! Earning money while you sleep no longer has to just be a dream. Although there is no shortcut to becoming rich overnight, making passive income during your sleep can be the next best thing.

Additionally, it always pays off if you invest more time in setting up passive income streams. Since you don’t have much to lose, these extra income streams could even generate additional cash for you every year without the overtime requirement.

Do you have more ideas on generating passive income streams? Share with us at ask@plannerbee.co!

Read more: Achieving Work-Life Balance: Tips for Managing Finances and Enjoying Life

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