How to safely make extra income?

Updated: Dec 29, 2019


The more your money works for you, the less you have to work for money. ― Idowu Koyenikan

Greetings! Once again, it’s me, posting quality content from my knowledge and experiences, hoping to bring some value to your life.


I am currently undergoing 2 weeks of reservist in camp training and using my precious sleeping hours at night to create this post. While it is fun to don my uniform, meet some old buddies and shoot my rifle in the jungle, I wondered how I was able to withstand the 22 months when serving National Service full time.


Anyway, in this short period of stay, I realise many of my army buddies have different professions now. Some of them are entrepreneur, air steward, teacher, engineer, auditor, sales agent, IT personnel, remisier, real estate investor, start-up founder etc. Due to the variety in professions, conversations are never boring.


However, there is a common phenomenon – some of my army buddies who are in stable good paying career, seem to be less informed when it comes to personal finances as compared to entrepreneurs, investors and finance related professionals. They do not have the time or interests to study about investments. While I understand that they are worried of the risks in investments and prefer stability due to family commitments, they are unaware that there are many low risks instruments in the market that offer better returns as compared to ordinary savings accounts that provides a measly 0.05% interest per annum. They like the idea of passive income, but have little idea how to make them.


Therefore, in this post, I will share with you 4 things that I do to make my money work to make extra income while I sleep. They may or may not be the best out there in the market, but I assure you that I have done my due diligence and have benefited from using them. I do also welcome you to share better ideas in the comment section so that we can keep good information within this community.


1) Open a salary crediting savers account such as DBS/POSB Multiplier Account


Who haven’t heard of DBS/POSB bank in Singapore? The DBS/POSB Multiplier account is a special account that offers substantially higher interests for the first $50,000 of savings. The interest is credited into your account monthly. By setting up a GIRO for your salary to be credited into the Multiplier account every month, as well as spend a minimum of $1 on DBS/POSB credit card (I use my POSB Everyday credit card for monthly Netflix subscription), I was able to earn 1.85% of interest per annum.



That means with $50,000 in your account, a regular pay check of more than $3,000 and a credit card expenditure, you will get approximately $77 a month in your bank. Now that’s a free hotel buffet every month! For more information on how to calculate the interest, please refer to the following website: https://www.dbs.com.sg/personal/landing/dbs-multiplier/.


Also, do note that this account is protected by Singapore Deposit Insurance Corporation (SDIC) for up to $50,000 just like your regular savings account, meaning to say if DBS goes bankrupt, your $50,000 savings will be protected. For more information, please refer to: https://www.sdic.org.sg/SDIC/apps/services/www/SDICSecureApp/desktopbrowser/default/. In any case, there isn’t a reason to keep so much cash in a single account. I recommend transferring anything above $50,000 to another bank account or do other investments.


On top of that this account allows you to hold multi-currency without any transaction costs which is great for a US stock trader like myself.


Besides DBS/POSB Multiplier account, there are several similar accounts out there (OCBC 360, UOB One) which offer higher interest rates. However, these accounts require many criteria to be met (such as minimum credit card spending, utility bills consolidation, housing loan, investment etc.) to receive the higher interest rates which I dislike.


Action required: Go to your DBS/POSB ibanking online or a local branch, open a multiplier account and talk to your HR to credit the salary into this new account. Apply for any reasonable credit card with DBS/POSB and spent $1 using the credit card every month (best on a monthly subscription expense). Voilà, free hotel buffet every month!


2) Open a fixed deposit account (sometimes known as timed deposit account)


This is the simplest financial instrument that has existed for a long time and is popularly used by our parents. Basically, you save your money with the bank for a fixed period (usually 1 year) and you can earn a preferential interest rate of up to 1.95% (as of 6 Dec 18). To put that into perspective, if you have $50,000 savings in a fixed deposit account for a year, a 1.95% interest will earn you $975 a year. Compare that to the regular savings account that offers 0.05% per annum – you will only get $25 in a year. Pathetic!


Similarly, this account is also protected by SDIC for up to $50,000 and you can always withdraw the cash during emergencies. The only penalty for early withdrawal is you will lose the preferential $975 interest for the year, and your capital of $50,000 is safe. Nevertheless, it is still better than getting $25 for your savings after a year, isn’t it? There are several fixed deposits account offered by banks, and you can refer to the following website for the best ones: http://www.moneylobang.com/fixed-term-deposit.php .


Action: Go to the bank’s website or branch, open a fixed deposit account, transfer your money in and wait for a year. Easy!


3) Subscribe to a cashback credit card such as Standard Chartered Unlimited Cashback


There are so many credit cards in the market, which should I get?

For me, besides the POSB Everyday Card that I applied for the DBS Multiplier account interest, I have another credit card: Standard Chartered Unlimited Cashback credit card.




As the name suggests, I can get 1.5% cashback on all expenditure without a limit when I pay with my credit card. Basically, everything I buy (grab, ntuc, movies, subscription service, ezlink card, restaurants, anything that receive payments via pay wave/credit card), I get 1.5% discount and the money is returned to me at the end of the month.


In addition, this card can be used as an EZ-link card and an ERP/Carpark vehicle IU cash card. It comes with an EZ-reload function which means that it will automatically top up once the cash value in the card depletes. This means that you will no longer be stuck in the MRT or carpark gantries or receive traffic fines due to insufficient credit in your cash card when driving through the ERP.


One more tip – I linked my Samsung Pay to my Standard Chartered Unlimited Cashback credit card which enables me to flash my phone instead of my card to pay (quite cool). Paying through Samsung Pay also earns me rewards which enables me to claim for free stuff like Thiong Bahru bakeries, free KFC meal, desserts etc. (Talk about being cheapo, love it). I think there are a couple of other paying mechanisms such as Android Pay or Apply Pay that offers such service and freebies too.


It is true that there are other credit cards in the market which offers better benefits, but usually they have a cashback cap or that you need to spend a minimum sum a month on your credit card to enjoy the cashback. Personally, I hate to be restricted to these requirements. As the saying goes, cash is king! Unlimited cash is… I don’t know, god?

Last thing to note is that although credit cards charges an annual premium of $100-$200, it can be waived easily as long as you spend regularly on the credit card. This is the common understanding and practice.


Action: Talk to me to get the member referral fee for the Standard Chartered Unlimited Cashback credit card. Then go to https://www.sc.com/sg/credit-cards/unlimited-cashback-credit-card/ to apply for the credit card. Currently, they are holding a promotion (ending 31 Dec 18) that provides up to $200 cashback for new card holders. If you are thinking of applying for this credit card, please let me know as there is a referral cashback of $50 if I refer you in. I will gladly split 50:50 with you. For more information on the referral: https://www.sc.com/sg/terms-and-conditions/credit-cards-mgm/


4) Open a brokerage account such as Saxo Capital Markets


If you are looking to begin your stock investing journey, the first thing you need to do is to open a reputable and low commission brokerage. For me, my first brokerage account is Saxo Capital Markets (SCM). It offers one of the lowest minimum commission per trade (0.12%, min $15) in Singapore and it has excellent support services in Singapore. I visited its office situated in Raffles Place and it was grand. For more information in comparing brokerage, refer to: https://blog.seedly.sg/the-ultimate-cheatsheet-cheapest-stock-brokerage-in-singapore/. What I like about SCM is that its platform allows you to buy both Singapore and international stocks. It has sophisticated buy/sell orders, good charting display and user-friendly platform. The platform sets itself apart from other local brokerage with its professional trading platform. For example, although other brokerage such as DBS Vickers cash account offer similar commission, I tried their platform and to my surprise, the platform do not even have a stop loss sell order option (omg) which is critical for stocks investing.


Action: Talk to me to get the promotional referral fee, then proceed to bring your IC to SCM office to open the account. The whole process takes only about an hour. If you are looking to invest in international stocks, talk to the relationship manager that you want to open a foreign currency trading account as well. Currently it is offering a promotional referral fee (https://www.home.saxo/en-sg/accounts/referral), meaning that you will get $150 by opening the account and I will get $350. You may doubt and say: “Wah Lao, you trying to earn referral fee then recommend me this brokerage is it?”. My reasoning is that we all have vested interest in our actions and I am establishing a win-win opportunity that benefits the both of us. I have done my due diligence in research to recommend this brokerage and I implore that you read the links provided above to confirm. Feel free to drop me a message, if you want to understand more. Referral promotion ends in 31 Dec 18. Cheers!


That concludes my 4 recommendations. They are low risks endeavours that requires minimum effort and allows your savings to remain liquid and protected while allowing you to earn some extra income. I will recommend that you don’t dwell into investing or trading if you haven’t grab these low hanging fruits. It is always important to manage your personal finance first before dwelling into other riskier ventures. Personally, I avoid insurance related products and topping up CPF account due to liquidity issue. They can provide higher returns, but it depends on whether you will be comfortable with leaving money locked in for a long period of time. I am tempted to deposit my money into the CPF savings account for compounding the guaranteed interests to leave inheritance for my kids, if any in the future. As of now, I am still considering.


Anyway, it is amusing to see some insurance products require lock-in period for years and they produce a return that is less than some of the savers account and fixed deposits mentioned above in my recommendations. Also, early withdrawal from these insurance products will often result in a substantial loss of the capital invested. So, beware and read your terms and conditions wisely to ensure that your capital will be guaranteed and understand how long the lock-in period will be. Last, but not least, AVOID ALL “get rich quick” schemes.

There are risks and costs to action. But they are far less than the long range risks of comfortable inaction - John F. Kennedy

Although the 4 recommendations aren’t the wisest when it comes to beating inflation, it beats saving in a basic savings account or holding cash under your mattress. It is recommended for absolute non-risk takers. Some action is better than no action, manage your finance first by grabbing these low hanging fruits and enjoy the process of having money flowing into your account while you sleep. Adiós!

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