One of the biggest fears that salaried workers have is losing our jobs, especially if we are the sole breadwinners where the families only relied on only one source of income. It will be a 100% loss of income as compared to lower percentage loss in families where both spouses are working.
In this article, I wish to share my 3 sources of income that can help me tide through the difficult period if I should lose my main job. The combined total of these 3 sources of income is not anywhere close to my main income source but it should help a little in paying for our family’s basic needs. So, I hope it is good reference for you if you are interested to build multiple streams of income.
Income Source 1: Singapore Savings Bond (SSB)
My first source of (passive) income comes from the interest earned from Singapore Savings Bond (SSB).
The Singapore Savings Bonds (SSBs) are a type of Singapore Government Securities that are issued for investors who want to participate in the Singapore Government Securities (SGS) market but in smaller denominations.
The capital is guaranteed (you won’t lose what you have invested), the interest payout is guaranteed (fixed at the time of purchase) and will reach maturity after 10 years. However, it can be redeemed any month (partial or full) during the 10-year tenure at a minimum multiple of $500.
I have currently 90k in SSB at this time of writing and will get a payout of S$2.8k in 2024, which is about 3.1% annual returns, which also works out to an average of SGD234 per month.
Income Source 2: Interest from Brokerage (IBKR)
In my brokerage account, Interactive Brokers (IBKR), I have around USD81.91k of cash holdings. I convert most of my cash in my account to USD to earn a higher interest of 4.83% (on any amount in the account minus the first USD10,000). Do note that your net asset value must be more than 100k or the interest will be of a lower tier.
Based on the interest calculator, I should get USD3473.25 in 2024, which works out to USD289.35 or SGD385 per month.
I quite like the idea of putting my spare cash in my brokerage account to earn that 4.24% average interest when it is idling, because it is quite easy to withdraw if I need cash immediately. The withdrawal process takes about a day or two and I will receive the cash in my bank account after that.
This is even faster than redeeming SSB as the payout is only on the 2nd day of the following month when the bond is redeemed. There is a minimum 6 days wait as the last day to redeem SSB is on the 4th last day of the month.
With the above two passive income sources, my average monthly return in 2024 works out to be SGD619 (USD465.4).
Income Source 3: Options Trading
My 3rd source of sideline income comes from the returns from options trading. This source of income is neither passive nor stable, i.e. there may be months where I ended up with losses instead of gains.
However, I am looking to stabilize my gains so that I can generate a steady stream of income every month. For 2023, I have positive returns for 8 out of 12 months. In the past 3 years, I have positive returns on 28 out of 35 months.
I am still -48k down on my options earnings because my losses (when they happened) were significantly higher than my gains, though the frequency is lower. Most of my losses that happened were due to the LEAPS CALL and Vertical Spreads contracts that I bought in 2022 and 2023.
Thus, moving forward, I would not trade such huge contracts and instead focus on the smaller contracts and take profits regularly as they happen. My goal is to achieve anything between SGD2k to 3k in average monthly income through options trading.
Together with the passive income of $619, I hope to generate around $2.6 to $3.6k of extra monthly income as my financial safety net. It is definitely not enough to replace my full-time job, but it should help a little for me to tide through.
Concluding Thoughts
When we become too reliant on our main source of income, it creates mental stress in us as we can’t afford to lose our job. Even when we dislike our jobs, we stay on for the money but drag our feet to work every day.
Having multiple streams of income can give us some reassurance that we are covered for the worst-case scenario where we lose our main job. It can help us build our retirement funds faster so we do not have to slog so hard for many years until old age.
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Nice jason! how much time do you spend to generate the monthly option profits?
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Hi Kwong Meng, it used to be few hours every night after US market opens. But recently, due to the change in strategy, I spend at most 1hr every day doing my trades. They are relatively low-risk trades, so I do not need to eyeball the computer screen all the time to mitigate a huge loss. There are days where I get too busy that I will not trade totally.
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Hi Jason,
Thanks for the reply. Inspiring to know that you are winning on most months with options trading.
Just one question, I noticed that your capital was around $490k in the beginning of 2023 but it rose to $686K despite nett loss of $22k. Is it fresh cash injections or it is actually margin?
regards, KM
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Hi Kwong Meng, not really a fresh cash inject, the extra 200k was the “cash” that was supposed to be set aside for Selling PUT, but since I am on margins account, the cash is not required to be in the account to start a SELL PUT contract. But, I added into the capital to better reflect the total amount that I should be having, but it is neither cash nor margin.
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