If you want to invest for retirement, there are only two ways you can make money
- Investing for capital gain
- Investing for passive income
With all the fluffy advocation by the media nowadays, income investing seems the way to go. But in reality, that is not likely where you can start with. Why?
If you understand a bit about income investing, you know that you will be lucky enough if you can receive 4% to 5% consistent investment income. You may also start to realize that many Singaporeans invest into properties for rental income, but end up with less than 2% rental yield.
Let’s say you want to earn a simple $2,500 per month income from your investment portfolio, you will need at least $600,000 initial investment capital to start with ($2,500 * 12 month / 5%).
Do you have $600,000 cash?
If not, your first step to invest for retirement is not to pursue income, but to accumulate enough retirement capital. In this post, I will explain to you the foundations of building your retirement funds through investments.