Building passive income is one of the best ways to supplement your salary and support your retirement. Here are a few practical options, including their pros and cons.
Mention retirement planning, and most people imagine saving diligently in their CPF accounts or stashing away money in a bank. While that’s a good start, inflation and rising living costs in Singapore mean that simply relying on savings may not be enough. That’s where passive income comes in.
Passive income refers to money earned with minimal ongoing effort. Unlike active work, where you trade hours for dollars, passive income is designed to keep flowing even when you’re not working—whether you’re travelling, spending time with family, or enjoying retirement.
By building passive income streams early, you can:
- Diversify your earnings beyond your main job.
- Offset rising expenses such as healthcare, utilities, or food prices.
- Build a cushion that reduces stress around retirement.
The goal isn’t to replace your full-time income overnight but to gradually add different streams so they complement your CPF Life payouts or personal savings.
Table of Contents:
- Dividend stocks & REITs
- Bond ladders & fixed income
- Side businesses that can be automated
- Digital products
- Balancing active work and passive income growth
Dividend Stocks and REITs
One of the most popular passive income strategies in Singapore is investing in dividend stocks and Real Estate Investment Trusts (REITs).
When companies or REITs generate profits, they distribute a portion as dividends to shareholders. Many Singapore-listed REITs, for example, pay quarterly distributions, making them attractive to income-seeking investors.
Syfe’s REIT+ portfolio comprises the top 20 Singapore REITs and offers broad exposure across key property sectors. Currently, the portfolio offers a projected annual yield of 5.49% and returns are surging this year.
| Pros | Cons |
| Regular, predictable cash flow | Dividends are not guaranteed; payouts can fluctuate with market conditions |
| Potential for capital appreciation if the stock or REIT grows in value | REITs are sensitive to interest rate movements and property cycles |
| Relatively easy to access via brokerage accounts or ETFs | Requires careful selection and monitoring of companies |
To diversify risk, consider an index fund or ETF that tracks dividend-paying companies or a basket of REITs rather than betting on a single stock. Syfe REIT+ offers a diversification strategy while reducing the hassle. Alternatively, Syfe Brokerage allows you to invest in individual REITs or build your personalised basket of S-REITs.
Opening a brokerage account in Singapore is straightforward, with fees depending on the broker. Many now allow fractional share investing, lowering the upfront capital required.
Bond Ladders and Fixed Income
Another classic approach to passive income is through bonds and fixed income securities. For retirees or conservative investors, fixed income can serve as a stabilising anchor within a broader portfolio.
Bonds are essentially loans you make to governments or corporations. In return, they pay you interest (known as coupons) over a fixed period. By building a bond ladder—holding bonds with staggered maturity dates—you can create a steady stream of income while reducing reinvestment risk.
| Pros | Cons |
| Lower volatility than stocks | Generally lower yields compared to equities or REITs |
| Predictable returns if held to maturity | Corporate bonds carry default risk |
| Options like Singapore Savings Bonds (SSBs) are safe and accessible for retail investors | Rising interest rates can reduce the value of existing bonds if sold early |
Corporate bonds have a higher barrier to entry in terms of the price and SSBs (which allow you to start with as little as S$500) are currently seeing low yields. Managed portfolios, such as Syfe’s Income+, are therefore a more appealing option as they offer a diversification strategy, low entry point for smaller amounts, and a regular payout of 5.0%-6.0%.
Side Businesses That Can Be Automated
Not all passive income has to come from financial instruments. Automated side businesses can also generate recurring cash flow. Examples include dropshipping or e-commerce stores with outsourced fulfilment, rental income from properties or car-sharing platforms, and subscription-based services (e.g., digital newsletters or online memberships).
| Pros | Cons |
| Higher income potential if the business scales successfully | Requires significant upfront effort to set up |
| Greater control compared to investing in external companies | “Passive” only after automation and outsourcing are in place |
| Opportunity to turn hobbies or skills into income streams | Market competition can be intense |
Setup costs can range from a few hundred dollars (for a digital newsletter) to hundreds of thousands (for rental property). So start small with something that doesn’t demand heavy capital. For instance, a side e-commerce store can be built with minimal coding skills today using platforms like Shopify or Lazada.
Digital Products
In today’s digital-first world, royalties and digital products are a fast-growing form of passive income. You create something once—like an e-book, stock photos, music, or online courses—and earn royalties each time it’s purchased or licensed. Setup costs are relatively low—mainly time, effort, and minimal platform fees.
| Pros | Cons |
| Infinite scalability—a product can be sold globally without extra effort | Initial creation takes time and effort |
| Low ongoing costs after the initial creation | Highly competitive—many people are publishing digital products |
| Opportunity to monetise skills or expertise | Income may be inconsistent unless marketing is strong |
Leverage platforms like Amazon Kindle (for e-books), Udemy (for courses), or Shutterstock (for photos). Even if each sale is small, income can accumulate over time.
Balancing Active Work With Passive Income Growth
It’s important to remember that passive income is not completely effortless—at least not at the start. Most streams require time, capital, or both before they become self-sustaining.
Here’s how to balance building passive income alongside your full-time work:
- Start small and scale up: Begin with low-barrier investments like dividend ETFs or SSBs.
- Reinvest your earnings: Use dividends or bond coupons to purchase more assets and compound your returns.
- Diversify your streams: Don’t rely on just one method. A mix of financial instruments and digital income can give you more resilience.
- Automate where possible: From auto-investing into managed portfolios to selling print-on-demand marketplaces, automation frees your time.
- Review regularly: Market conditions change, and what worked in one phase of life may not suit another.
Syfe Income+: Making Passive Income More Accessible
For Singaporeans who prefer a hands-off approach, managed investment solutions can provide exposure to income-generating assets without the hassle of researching individual bonds or stocks.
One such option is Syfe Income+, a professionally managed bond portfolio that aims to deliver regular passive income. By diversifying across high-quality global bonds, Income+ is designed to give investors consistent payouts while managing risk. It has a projected annual yield of 5.0%–6.0%, and calls for no lock-in, no withdrawal penalties, and no minimum balance.
This approach is especially appealing if you:
- Want predictable cash flow without monitoring markets daily
- Prefer a ready-made portfolio managed by experts
- Are looking to supplement CPF Life or other retirement income sources
- Would like to keep your funds liquid.
With solutions like Income+, you can start building passive income streams with ease and make your retirement more secure.
Conclusion
Passive income helps you build financial resilience over time. From dividend stocks and bonds to side hustles and digital royalties, Singaporeans have more options today than ever before. The key is to start early, stay consistent, and balance ambition with realistic expectations.
You must be logged in to post a comment.