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 8 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 cryptocurrency
Bitcoin (BTC) is the world’s first digital currency without a central bank. As the oldest and largest cryptocurrency in the world, its value has continued rising over the past decade. After an announcement that Tesla purchased US$1.5 billion worth of Bitcoin (BTC), the cryptocurrency has since reached its all-time high of US$58,000, as institutional and corporate investors have also started pouring money into the crypto sphere. While it may be unachievable for retail investors to own one whole Bitcoin at the moment, you can still own a small fraction of it for a few hundred dollars. Bitcoin has been touted as a store of value in the digital era, and could even hit US$100,000 at some point. With Apple Pay now supporting Bitcoin payment, signs point to mass adoption of the cryptocurrency in the future.
Besides Bitcoin, there’s also Ethereum (ETH), which also recently hit its all-time high of US$2000. ETH serves as a means of payment for crypto transaction fees between exchanges and wallets. There are hundreds of cryptocurrencies out there, and some are backed with solid projects with real-world usage, such as Aave (AAVE), a peer-to-peer lending platform on Ethereum, Binancecoin (BNB), a token launched by Binance online exchange, native to the Binance blockchain which reduces transaction fees on the exchange.
For beginners, invest and dollar cost average a fraction of your savings into safe and stable cryptocurrencies like BTC and ETH. In your spare time, study trading and practice without real money using demo accounts like eToro, TradingView, Plus500 just to name a few.
When you’re more financially stable in the future after earning a regular salary, you’ll have the knowledge to analyse charts, start trading and form strategies. The crypto market is very volatile and like with any investments, there are risks involved, and it’s important to do your due diligence and research on the product before putting your money in it.
3. 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.
4. Invest with a robo advisor
For a low-cost alternative to traditional financial advisors, stash your money with robo advisors for small investments which doesn’t charge you a fee if you’re investing less than S$50,000. Alternatively, you can also invest with DBS’s digiPortfolio with a minimum initial investment of S$1,000, or Saxo’s Regular Savings Plan which gives you access to managed portfolios with a monthly investment of just S$100 and minimum initial investment of S$2,000. However, note that most robo advisors charge an annual fee between 0.5% to 1%, so pick one with the lowest annual fee according to how much you can afford to invest.
5. 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.
6. 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.
7. 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.
8. Earn free cryptocurrency
If you’re not ready to invest, there are several risk-free and cost-free ways to accumulate cryptocurrencies. Game sites, crypto exchanges, and price tracking sites offer opportunities to earn crypto while learning about crypto. On Coinbase Earn, all you have to do is watch a video explaining how a project works, answer some questions about it and earn about US$30 in different cryptocurrencies. Similarly, you can also earn free crypto on CoinMarket Cap Earn by finishing courses on different projects to earn their coins.
A more fun way to earn free coins is to play games like WeNano (similar to Pokemon Go), NanoQuakeJs, MyCryptoHeroes, DeCentraland, and Brave Frontier Heroes. If you’re using the Brave browser, you can also earn its native coin BAT just by browsing and seeing ads.
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, a personal finance research firm