3 Simple Ways to Generate Passive Income from a Singaporean Perspective

I have been investing in US Stocks ever since i started my investment journey in 2008.

Most Personal Finance Blogs in Singapore that I managed to read up are extensively researched on Dividend Stock in Singapore Market.

This blog would aim to share and document my investment journey on Growth Stock in the US Market from a Singaporean perspective.

Some blogs such as this does an excellent explanation on How to buy US Stocks in Singapore.

2008 was my first step into the working world but i had already started to read up on investments with the intention to let my passive income to exceed my expenses.

In order to achieve the Passive Income > Expenses, there are basically 3 ways:

1. 1. Business Owner
2. 2. Property Investment
3. 3. Stock Investment

Given today's economic situation where jobs are no longer guaranteed and we increasingly leaned towards a gig economy or heavy reliance on personal branding to push your products.

Business Owner

Running a business on the side while working full time requires effort and discipline. We all have 24 hours a day and how we spent it is really up to us and the motivation and passion to create a business is massive.

Unless you have the energy and time to spare or be motivated enough to create, it is quite unlikely a salaried worker like you and me would venture here. Even if you have a business idea, it would take a substantial amount of time and effort. However, it's not impossible.

Property Investment

Well in Singapore to invest property in Singapore in this current restrictions and economic climate is rather challenging and definitely require substantial cash upfront if you are single and not married or not a Singaporean.

Again, it's not impossible because i did managed to buy a private property before 35 years old. the property was bought when i was 33 years old, 2 years ahead of schedule.

There are many ways to enter Property Investment and it can be discussed in detail on the 3 Basic Strategies to Buy Property in Singapore for Millenials.

Stock Investment

For salaried workers who just entered the workforce, investing in stocks is one of the surest way to safeguard your future and retirement. Heck! if you do it right and started off very aggressive with the proper guidance and real hard core discipline like my idol and this real discipline warrior.

I have a study analysis on my 2 Singapore Idols in Stock Investment. That would be covered in a detail table here.

One of the ways to know if you have invested well is to keep check on a reference point. In my case, I use the S&P 500 as my reference. My strategy when i started out in 2008 was to be aggressive in US Stocks. It was exciting and scary at the same time in 2008.

There will be more details on my Stock Investment Strategies to share with you. First, we need to figure out a method to understand how we fared from 2008 to 2019. Since we will be using S&P 500 as the base reference, we would need to identify its Annualised Rate of Return.

S&P Index data are all easily obtainable from Yahoo Finance and is computed in this table below.

1. How this is compute: we first have to calculate the Starting Value and its Ending Value of the each year. Detail explanation are over here.

Over the past 12 years from 2008 to 2012, the S&P 500 is gaining 7.22% each year.

This means your investments would compound 7.22% each year and that is a extremely good hedge against inflation.

Obviously this Rate of Return is doing much better than putting money in a bank account.

One more great reason not to park your money in a bank.

How to Outperform S&P 500 Index from a Singaporean Perspective

Most chatter on the internet suggests that being able to get an Annualised Rate of Return of 15% on your investment would be possible. This will mean that you would have to be aggressive on your investments.

10.92% Rate of Return Year on Year on my Investment shows you that it is definitely possible.

The approach i used over these 12 years have been rather laid back and it's been 3 simple rules that govern my investment strategy and I hope to share it with you in detail. For a start, let's briefly run through the 3 simple rules:

1. 1) Visualise your End Goal
2. 
   
3. 2) Work Backwards on your Strategy Plan
4. 3) Buy and Keep

You need to have a Target. In my case, i require my Investment Portfolio to be valued at USD 1 million by 55 years old.

If my Investment grows 10.92% yearly, i would need to pump in yearly a certain amount to ensure the Portfolio keeps its Yearly Target. i will share the details in an upcoming post.

Once you figure out your End Goal or Target and the yearly investment you would need to save, you start to work backwards on what you can save in a year, in a month, in a day. This helps to put your End Goal in a perspective.

With your war chest of savings ready, this is where the real work begins. I will lay out the simple methods of what and how to buy US Stocks in a separate post.

The next post I will share the Stocks that I have invested to show how we can Outperform S&P 500 Index.

tschuss~