As the economy slows and cost of living continues to rise, some of us might feel that we should find new ways to make more money to support our lifestyle or even fund our early retirement.
Truth to be told, true passive income doesn’t exist – a lot of alternative sources of income apart from your main employment income is made through hours of upfront work, education before you start seeing results of making the income source passive.
In this post, I’d like to share my experience in several ways on how a fresh graduate with not much initial resources and money can get started to build a stream of alternative sources of income.
Dividend and interest income
The most popular secondary income source is through dividend income from stocks and interest income from bonds and cash in bank.
As you might already know by now, dividend income arises from investing in dividend paying companies which pay a return on your investment at a certain frequency, it could be every year or every quarter – as a form of shareholder returns – which you can then choose to reinvest or spend it.
While the concept is simple, dividend income requires a high initial capital to be of significance. For example, dividend paying companies pay roughly 2-4% annually while REITs pay roughly 4-6% annually in dividends.
A $100K investment would yield roughly $2-6K a year, translating to between $166 and $500 a month in passive income, assuming the dividend yield remains constant.
As you can see, to make enough monthly passive income to be useful to cover your expenses, you’d first need to build up a significant sum of capital – something that might require several years of employment income and savings to build.
Income from hobbies and gigs
To help build that initial nest egg, you can consider monetising your hobbies. For example, if you like photography, you can start by building a portfolio sharing your work online, get gigs such as covering events, graduation, or weddings for a small fee, or maybe even run photobooths at events.
When I was in junior college and university, I started monetising my photography skills through a combination of paid graduation and outdoor photoshoots – getting my brand/name out through a combination of social media, freshmen orientation camps and word-of-mouth.
As I shared my photos online through social media, demand went up, I could further increase my prices, work less but earn more at the same time – helping me balance school demands and making extra pocket money.
If you’re not a photographer, there are plenty of other opportunities to monetise your hobbies. If you like to bake, and if you bake well, you could sell your cakes and cupcakes at birthday parties, school (e.g. welcome teas) and company events. You could run baking classes, form an interest group and invite people who want to learn baking over for a class.
If you like playing music, you can also advertise your services and start a class, teach younger children how to get started. You can also play at friends’ weddings or birthday parties as a paid gig.
There are many ways to do it and earn extra pocket money – there are always people out there looking out for those who can do these kind of tasks, but you could get your name out, it’s one step in the door for an income opportunity.
Income from part-time jobs
Giving tuition to students, or working as a part-time private car driver/food delivery rider can also help you with another income source when you have a bit of spare time at night or over the weekends.
Tuition rates in Singapore have hovered between $25 for primary school kids to $70 per hour for tertiary school kids. Assuming a 2 hour weekly tutoring for one kid, you can expect to make a minimum $200 per month from tutoring.
Part time food delivery is also another very popular option today as riders can earn around $6-$10 per delivery plus incentives and sign up bonuses. I personally know of someone who makes roughly $300 a weekend doing part time food delivery!
With all part-time jobs, finding extra time to commit and work might not be suitable for everyone. For example, those who work very long hours or have family commitments will find trouble doing part-time jobs.
Income from selling products/e-commerce
If you’re savvy enough, you can earn a secondary income selling or reselling products online. These days, online shopping is so prevalent and you don’t need much to set up an online store to start selling items, making the barrier to entry very low.
Shopee, Lazada, Qoo10 and Amazon have seller programmes that can help you get started quickly. These platforms offer the reach of tens of thousands of shoppers but may take a small commission per sale.
You can also choose to do it yourself through setting up an e-commerce store all by yourself. There are a few options such as Shopify or WordPress.
For those looking for a free way to sell even used products online, Carousell and Facebook Marketplace are great places to sell your pre-owned items for extra money. Depending on the scale and growth of your business, you might reach the limitations of these platform quickly.
There are also people who sell created products such as e-books, courses and online content for money. Through platforms like Udemy, many content creators have resorted to web platforms to sell courses for a small fee.
Setting up an online store or selling products online requires time, effort and marketing skills to compete against thousands of other sellers in the same space who are also vying for the sale.
Income from blogging
Blogging can be a great platform for making passive income – especially through ad placements and sponsored posts. Although attention has moved towards newer and trendier platforms like Instagram and YouTube, blogs remain attractive for finding written content.
Bloggers usually make some money through selling advertising spaces or affiliate programmes. For example, Google Adsense pay bloggers for displaying relevant ads on their websites which drive clicks.
Affiliate programmes are also another popular way that bloggers use to earn a small commission for every sale made through an affiliate link. Unlike sponsored posts, bloggers might use affiliate links only if they believe in the product, as they are not paid immediately when they make a post.
For those keen on starting a blog or website, Bluehost is a very popular international host with great reviews and easy setup. If you like a Singapore-based web host, I recommend Limenex as they have excellent customer support and affordable plans too. Note that these are just pure webhosts and they require a little bit of technical knowledge to get started.
WordPress offers a free option to get started blogging immediately but it gets expensive for expanded features such as installing plugins and using custom URLs.
Income from advertising
These days, advertising income forms a bulk of many young influencers’ revenues, especially on modern media platforms like YouTube and Instagram.
Depending on how valuable your audience are in driving revenues, brands can pay several cents to several dollars to deliver tailored advertising to your audience.
Ads can be paid per view or per click, depending on how the terms of the agreement are structured. For those who already have a strong following, advertising can bring in lots of money as well.
There you have it…
As you can already tell, building a sustainable secondary source of income requires a lot of work and the process will not be easy. To those who have successfully made it, the rewards that follow will be worth the effort.