As a student living in Singapore, a monthly allowance of S$100 just isn’t enough. You could easily spend it all in one afternoon at a restaurant or shopping for a pair of sneakers. Many of your friends may work part-time jobs, like tutoring or babysitting to supplement their allowances. If you’re busy with school and an internship, here are a few other ways to multiply your allowance. Here are 5 tips on how you can earn passive income as a student.
1. Invest in STI ETF
ETF stands for exchange traded fund, which are listed and traded on a stock exchange. By buying shares of the ETF, you have small ownership of the total fund. Typically, an ETF tracks a stock index, and Singapore has its own called the Straits Times Index (STI). The STI tracks the performance of the top 30 companies listed on the stock exchange in Singapore.
For beginners who are just getting started on their investment journey, STI-ETF is a low cost, low-risk way to invest your money in top-performing local companies with a regional presence. You’ll have a diverse portfolio of ETF in companies across different industries in Singapore. If you’re 18 years old and above, you can start investing in STI ETF with major banks in Singapore such as POSB/DBS, OCBC, UOB. These banks offer investment savings plans which you access to blue-chip ETFs from as low as S$100 a month with up to 3% p.a returns. While you’ll only see significant gains in 3 to 5 years, this helps to grow your savings long-term, and also protects your money against Singapore’s yearly inflation rate of ~0.4%.
2. Invest in personal development
As a student, the most important investment you can really make is in yourself. With education and skills in fields with high growth and salary potential such as IT, UI/UX design, investment banking, law, or medicine, you’ll be able to set aside a bigger capital for future investments, giving you greater returns. You can also acquire hobbies that have the potential for monetisation so that you can make money doing something fun.
3. Make use of your existing skills
If you already have existing skills, you can monetise them and earn passive income on streaming platforms like Twitch, where gamers livestream themselves playing games while their viewers/followers donate money, essentially paying the streamers for content of themselves having fun. However, with thousands of streamers out there, you have to carve out a niche and play to your strengths. Whether you’re a good looking charismatic gamer girl or a funny guy with impressive gameplays, identify your niche and build an audience around it.
There are also other online platforms to earn passive income off of. You can become a Youtuber or Instagrammer with comedy, dance, music, cooking, cooking, mukbang, or tutorials. Granted, coming up with and executing content ideas as well as cutting and editing videos take effort, but when your old videos start gaining eyeballs as you create new ones, that’s when the passive income starts rolling in. Even if you stop uploading videos, you’ll still earn passive income as long as your existing videos continue gaining views.
4. Sell digital art on NFT platforms
Are you an artist or art hobbyist? Sell your digital art on digital art marketplaces, where your art will be tokenised and linked to Non-fungible tokens (NFT) that contain unique ownership data that is easily verifiable and can be traced back to you. Built using one of two Ethereum token standards (ERC-721 and ERC-1155), NFT platforms are opportunities for you to accumulate Ethereum by selling your art.
Without an auction house or art gallery taking a cut of your profits, NFT platforms also allow you to keep a bigger portion of your earnings. Buyers can also sell, trade or hold the art as long term investments. According to Coindesk, “there has been a total of S$174 million spent on NFTs” since 2017, and the NFT space will only grow with the continued rise of cryptocurrency awareness.
5. Don’t fall prey for get-rich-quick schemes
As a young impressionable student without much income, it’s easy to fall for scams that promise you wealth in a short period of time. These exist in the form of multilevel marketing (MLM) companies selling seemingly harmless products like beauty and skincare products, spa packages and health supplements.
These companies make money by recruiting salespeople who are paid solely through commission. The salespeople or members usually pay a fee upfront for their products and are then told that they could cover the fee from commissions by recruiting new members. Watch out for these red flags and never get involved in these schemes.
Conclusion: There’s no passive income without capital
Before you can earn passive income, you have to put in the work, be it through monetising your hobbies, learning, personal development or using existing savings as capital for investments. While some of the suggestions on this list require a fair amount of time and passion, this is non-monetary capital that will give you greater returns in the long run.
Besides capital, you’ll also need patience as you wait for your money to grow passively. If you’re starting to invest in riskier markets like cryptocurrency, make sure you do your research before diving in. Never invest your entire life savings and only invest what you can afford to lose.
This article is contributed by ValueChampion Singapore
