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Make your money work for you: How millennials can generate multiple income streams
Whether you’re a beginner or looking to diversify your portfolio, HSBC’s suite of banking services can help you get that bread and grow your wealth
HSBC reports that Singaporean millennials want to retire earlier, improve their lifestyle and are increasingly willing to relocate for better well-being. PHOTO: HSBC
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Singaporean millennials are viewing retirement through a new lens. While many aspire to retire earlier and achieve a better lifestyle, less than 50 per cent feel prepared to do so. Generating passive income is another one of the top life goals for millennials, according to HSBC's latest Quality of Life report. For these internationally minded 25- to 39-year-olds, creating steady streams of income that keep flowing is only going to become more important over the next five to 10 years, so they need to start laying the groundwork right now to strike the right balance between pursuing a quality lifestyle and preparing for retirement.
But what is passive income?
Passive income is revenue that takes negligible effort to acquire, as opposed to active income, which is earned as part of your day job, whether that is being an entrepreneur, working in a company or doing anything else that requires ongoing effort. Passive income is crucial if your goal is to have multiple income streams.
One simple way to start generating passive income is by putting your money in a high-yielding savings account. By doing so, you can leverage the power of compound interest to grow your wealth over time without the need for active investing. Compound interest is the interest earned on both your initial principal and the accumulated interest from previous periods, allowing your money to grow exponentially over time.
When choosing a savings account, look for one with a competitive interest rate and low fees to maximise your returns. HSBC’s Everyday Global Account, for example, can help you earn attractive interest on your savings while offering fee-free ATM withdrawals and retail transactions in multiple currencies.
Alternatively, consider investments that carry lower volatility and provide a stable cash return, such as dividend stocks, bonds/certificates of deposit and life insurance plans.
Harness the power of compounding
There are many sources of passive cash flows, like collecting rent, side hustles or investing. So, it is worth considering what investment options are out there and taking action to get the ball rolling on passive income generation. No matter what strategy you choose, maximising your income streams and earning passively can free up more time for you to pursue what you really want.
“When it comes to building sustainable passive income streams, individuals should start investing as soon as possible to harness the power of compounding,” says Mr Jeffrey Yap, head of Investments and Wealth Solutions South-east Asia, HSBC Global Private Banking & Wealth.
“Having a trusted partner can further empower individuals to invest with confidence – starting with a comprehensive assessment of their financials and risk appetite, before building a robust portfolio poised to maximise gains for the future.”
Start with a plan in mind
To take on your wealth journey with confidence, it is crucial to first lay down a solid foundation and strategy that you can build on. Start by detailing your life goals and current financials; separating your needs from wants and ranking your goals in terms of priority. Some of the goals that millennials today have can range from going on yearly vacations and paying off an HDB flat to having money for an occasional dinner treat and indulging in their hobbies.
As you are establishing these goals and getting a clearer idea of your risk appetite, it is important to start making a mindset shift to proactively plan and manage your finances. Tap on financial calculators and budgeting tools such as HSBC’s Grow My Wealth Calculator, to better understand how your money can grow with potential returns as you save and invest towards your goals. You can also equip yourself with expert tips from the Let's Talk Wealth series and if you are an HSBC customer, explore its Wealth Insights Hub for the latest in global market insights.
Should you require additional support in your wealth journey, it is always good to ask the experts. HSBC’s relationship managers can offer their expertise, providing wealth and insurance product recommendations based on your financial needs analysis and risk appetite, so that you are empowered to make the most of your money and live life on your own terms, no matter what stage you are at in your wealth journey.
“If you’re just starting out on your investment journey, seek multiple opinions from professionals, fearlessly asking questions to gain clarity before making any decision. Having an independent and objective advisor who you trust to tailor the best investment approach for you can help take the load off your wealth journey,” Mr Yap adds.
Millennial getting advice on how to grow passive income
Support wherever you are
HSBC's relationship managers can also be a pillar of support to millennials, who value experiences and personal growth, and are looking to make a move seamlessly across continents. The same HSBC survey found that 26 per cent of Singaporeans plan to relocate at some point in their lives, with 38 per cent of this group being millennials. For this demographic, relocation is an opportunity for an enhanced quality of life and professional advancement.
Understanding these aspirations, HSBC is uniquely positioned to support millennials in navigating the financial intricacies of international relocation, ensuring that their wealth continues to flourish as they embark on new horizons. HSBC's Everyday Global Account provides the flexibility and mobility that globally minded individuals need. With this account, customers can seamlessly manage their finances across borders, whether they are settling into a new country for work, embarking on a long-term adventure, or simply exploring new cultures.
Turn your goals into reality with an HSBC Everyday Global Account and grow your wealth the smart way. Start an HSBC Premier relationship to access a suite of rewards and wealth solutions with unparalleled service and enjoy up to S$27,100* in rewards.
*Terms and conditions apply. SGD deposits are insured up to S$100,000 by SDIC.
Disclaimer:
This material is for information only and not meant to be relied on for any investment or advisory purposes nor is it an offer by HSBC Bank (Singapore) Limited of any products or services. It is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. The specific investment objectives, personal situation and particular needs of any person have not been taken into consideration. Before you make any investment decision, you may wish to seek advice from a financial consultant before making any investment decisions. If you choose not to do so, you should consider whether the investment is suitable for you.
