Building a FIRE Portfolio in Singapore: A Realistic Hybrid Approach That Balances Income & Growth

This is a follow-up to my previous article:

FIRE and the Big Dilemma – Dividends vs Safe Withdrawal Rate: Which One Helps You Sleep at Night?

Do read if you have missed it!

In that last post, we explored the dividends vs. SWR dilemma faced by many in the FIRE (Financial Independence, Retire Early) movement.

The key question is, do you rely on dividends for passive income or withdraw a fixed percentage of your portfolio (SWR)?

Both strategies have their merits, but combining them could be the sweet spot for a psychologically comfortable and financially stable retirement.

Theory is theory, let’s have a practical example –

Singapore-based investor, with a $1.5M retirement portfolio, can use a hybrid approach to reach their goal of $5,000/month in passive income.

Why a Hybrid Approach to FIRE?

Let’s face it: relying entirely on dividends might sound tempting for peace of mind, but high-dividend stocks can limit long-term growth. Plus, companies can cut dividends, leaving you in a lurch. On the flip side, relying only on a Safe Withdrawal Rate (SWR) like 3.5% from global ETFs can be hard on your mind and psychology aspects — it feels odd to sell assets when markets are down, not many are able to do it.

That’s why the hybrid approach should work well:
✔ Dividend stocks & ETFs provide a steady passive income stream.
✔ Global index ETFs offer long-term growth and inflation protection, with the safety of a 3.5% SWR.
✔ A cash buffer helps manage market volatility and avoid panic selling.

This balance creates a retirement plan that’s not just financially sound, but psychologically comfortable.

Step 1: Portfolio Allocation ($1.5M Portfolio for $5K/month FIRE Goal)

We’ll structure the portfolio into:

40% in dividend stocks & ETFs (~$600,000) for steady income.

55% in global index ETFs (VWRA & EIMI) (~$825,000) for long-term growth with SWR.
5% in cash buffer (~$75,000) to provide safety in downturns. This should last you for 15 months of ~$5000 per month such that you can don’t draw down if you need especially in downturns.

Asset Type	% of Portfolio	Allocation ($)
Dividend Stocks & ETFs	40%	$600,000
Global Index ETFs (LSE-listed)	55%	$825,000
Cash Buffer	5%	$75,000
Total Portfolio	100%	$1.5M

Step 2: Dividend Portfolio (~$600,000 Allocation, ~5% Yield)

The dividend portion will focus on high-quality assets with strong cash flow and sustainable dividends. We’ll include:

Singapore Banks (DBS, UOB, OCBC) for stable and reliable dividends.
Net Cash Singapore Companies like Sheng Siong etc for low-risk, cash-rich companies.
NikkoAM-StraitsTrading Asia ex Japan REIT ETF for exposure to REITs across Asia.

SPDR STI ETF for broad exposure to Singapore’s top 30 companies.
VHYL (Vanguard FTSE All-World High Dividend Yield UCITS ETF) for global dividend exposure.

Dividend Portfolio Breakdown (~5% Yield)

Asset	Type	Allocation ($)	Dividend Yield	Estimated Dividends ($/year)
SG Banks (DBS, UOB, OCBC)	Financials	$150,000	~5.0%	$7,500
Net Cash Singapore Companies (Sheng Siong etc.)	Dividend Stocks	$100,000	~4.0%	$4,000
NikkoAM-StraitsTrading Asia ex Japan REIT ETF	Asia REIT ETF	$150,000	~5.0%	$7,500
SPDR STI ETF	Singapore Index	$100,000	~4.0%	$4,000
VHYL (Vanguard FTSE All-World High Dividend Yield UCITS ETF)	Global Dividend ETF	$100,000	~3.0%	$3,000
Total		$600,000	~5% avg	$26,000/year (~$2,167/month)

Why VHYL?

VHYL gives you global exposure to high-yield dividend companies, diversifying the portfolio beyond Singapore.
It maintains a 3.0% yield, adding strong, reliable income from global markets.

Step 3: Growth Portfolio (~$825,000 in LSE-listed ETFs for SWR)

The growth portfolio will focus on global index ETFs and will be managed via a 3.5% withdrawal rate (SWR):

Asset	Type	Allocation ($)	Withdrawal Rate	Income Generated ($/year)
VWRA (LSE-listed)	Global Index Fund	$725,000	3.5% SWR	$25,375
EIMI (LSE-listed)	Emerging Markets	$100,000	3.5% SWR	$3,500
Total		$825,000		$28,875 (~$2,406/month)

The VWRA provides exposure to global stocks, while EIMI adds higher-growth emerging markets. Both are Ireland-domiciled, meaning they avoid high US withholding taxes and are more tax-efficient for Singapore investors.

Step 4: How Does This Portfolio Generate $5,000/month?

✅ Dividends from stocks/ETFs: ~$2,167/month ($26,000/year).
✅ SWR withdrawals from VWRA/EIMI: ~$2,406/month ($28,875/year).
✅ Total Monthly Income: $4,573/month ($54,875/year).

This comes very close to the $5,000/month goal, with a cash buffer to smooth out any shortfalls.

What if there’s a market crash?

The $75,000 cash buffer will ensure you don’t have to sell assets during market downturns.
In strong market years, you can reinvest excess dividends into VWRA and EIMI.
If needed, adjust the SWR temporarily (e.g., reduce to 3.3% in tough times).

Step 5: Long-Term Growth & Sustainability

Even with SWR withdrawals, this portfolio is designed to continue growing over the long term.

The VWRA portion should appreciate by around 7% per year, so even after 3.5% withdrawals, your portfolio will likely grow rather than shrink.
The VHYL dividend will likely increase over time, providing more income each year.

The SG Banks, STI ETF, and REIT ETFs should also grow with the economy, boosting your income over time.

How Does Net Worth Change Over Time?

Your global index portion (VWRA) will continue to grow, keeping pace with inflation.
EIMI emerging markets should continue to grow, keeping pace with inflation.

The dividend portfolio should keep increasing dividends, helping your income grow and maintaining long-term wealth.

Why This Hybrid Approach Works

✅ Stable income from dividends (~$26,000/year).
✅ Growth from SWR withdrawals (~$28,875/year from VWRA & EIMI).
✅ A resilient portfolio that adapts to market cycles.
✅ Capital appreciation over time, allowing your net worth to grow.

By combining dividend investing with SWR-based growth, this hybrid strategy offers a well-rounded retirement plan for a Singapore-based FIRE investor.

You get the peace of mind of steady dividends, the growth potential of global equities, and the flexibility to adapt during market downturns.

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Building a FIRE Portfolio in Singapore: A Realistic Hybrid Approach That Balances Income & Growth

The key question is, do you rely on dividends for passive income or withdraw a fixed percentage of your portfolio (SWR)?

Why a Hybrid Approach to FIRE?

Step 1: Portfolio Allocation ($1.5M Portfolio for $5K/month FIRE Goal)