In Singapore, the principles of making your money work for you are similar to anywhere else in the world, but there are some unique opportunities and strategies you can take advantage of in the local context. Here are 13 powerful ways to get your money working harder for you in Singapore:
- Start Investing Early (The Power of Compounding)
Singapore’s Central Provident Fund (CPF) is a great place to start building your wealth, especially with its high interest rates (up to 5% for ordinary accounts). But beyond CPF, investing in stocks, mutual funds, or Exchange-Traded Funds (ETFs) can help your money grow exponentially over time. The earlier you start, the more you benefit from compounding interest, which makes a big difference in the long run.
- Maximise Your CPF Contributions
The CPF is a mandatory retirement savings scheme in Singapore, but you can also take full advantage of it. Besides the Ordinary Account (OA) for housing and the Special Account (SA) for retirement, consider topping up your Retirement Account (RA) and contributing voluntarily to your CPF to earn attractive risk-free returns. You can also take advantage of the Tax Relief from topping up your own and your family members’ CPF accounts.
- Invest in Singapore Real Estate
Singapore’s real estate market has historically been a solid performer. Buying property, whether for rental income or long-term capital appreciation, can significantly boost your wealth.
Alternatively, you can invest in Real Estate Investment Trusts (REITs) listed on the Singapore Exchange (SGX) to get exposure to real estate without the need to purchase property directly.
- Dividend Stocks on SGX
Singapore is home to many established, dividend-paying companies like DBS, SingTel, and Keppel Corp. These stocks can provide regular income through dividends. Reinvesting these dividends into more stocks can accelerate your wealth-building efforts, benefiting from the power of compound growth.
- Peer-to-Peer (P2P) Lending
Singapore has a growing P2P lending scene, with platforms like Funding Societies and MoolahSense allowing you to lend money to businesses or individuals in exchange for interest. This is a great way to earn higher returns compared to traditional savings accounts or bonds, though it does come with more risk.
- Create Multiple Streams of Income
Don’t rely solely on your salary. Consider side hustles or freelance opportunities. Popular side gigs in Singapore include food delivery (GrabFood, Foodpanda), freelance writing or graphic design, and even starting a small online business. Multiple income streams can help you reach your financial goals faster.
- Invest in Yourself Through Education
Singapore has a thriving ecosystem of educational opportunities, both online and offline. Invest in upgrading your skills through certifications in high-demand fields like finance, tech, or healthcare. Platforms like SkillsFuture also offer subsidies for many training programs, making it easier to improve your earning potential.
- Automate Your Savings
Set up an automated savings plan through your bank or investment platform. Apps like StashAway or AutoWealth allow you to automate your investments, while tools like OCBC 360 or DBS Multiplier can help you grow your savings by automatically transferring funds into higher-interest accounts. Consistency is key, and automation ensures you don’t skip a month.
- High-Yield Savings Accounts & Fixed Deposits
While interest rates on regular savings accounts are low, banks in Singapore often offer high-yield savings accounts (like the OCBC 360 Account or UOB One Account) that offer bonus interest rates if you meet certain conditions. Additionally, fixed deposits can provide a safe, predictable way to grow your money at higher rates.
- Start an Online Business or E-Commerce Store
Singapore is an ideal base for starting an e-commerce business, thanks to its well-established infrastructure and access to international markets. Whether it’s selling on platforms like Shopee, Lazada, or Carousell, or starting your own online store, e-commerce allows you to leverage your skills and passions for additional income.
- Take Advantage of Cashback and Rewards Programs
Singapore has numerous credit cards that offer cashback or rewards for everyday spending. Cards like the DBS Live Fresh Card or OCBC 365 Card offer cashback on groceries, dining, and even online shopping. These programs can help you save money on regular purchases while still earning rewards.
- Invest in Gold and Precious Metals
Singapore is a hub for gold trading and precious metals investments. You can invest in physical gold or use platforms like The Royal Mint or GoldSilver to buy and store gold. Gold is considered a safe haven during economic uncertainty, and in Singapore, the GST on gold is exempt, making it an attractive asset for wealth preservation. - Optimize Your Taxes
Singapore has a relatively low tax rate compared to many countries, but there are still ways to reduce your tax burden. You can contribute to your CPF, participate in voluntary CPF top-ups, and make use of tax reliefs like donations or parenthood tax rebates. It’s also worth working with a financial planner to maximise your tax efficiency and ensure that you’re not overpaying.
Bonus Tip:
Adopt a Long-Term Mindset
Whether you’re investing in stocks, real estate, or starting a business, the key to growing wealth in Singapore is patience and consistency. Wealth doesn’t happen overnight, but with a clear strategy, discipline, and time, your money will gradually work harder for you. Stay committed to your goals and allow your investments to grow.
By taking advantage of these strategies, you can build a strong financial foundation, create new sources of income, and ultimately make your money work for you in the dynamic and thriving environment that Singapore offers.