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November 15, 2025
How to make yearly passive income of $70,000 from ASX shares
This simple method could lead to pleasing long-term wealth and cash flow.The post How to make yearly passive income of $70,000 from ASX shares appeared first on The Motley Fool Australia.
The dream of earning a substantial passive income through ASX shares is a goal many Australians share. While the specifics require careful planning and execution, a recent article on The Motley Fool Australia outlines a simple, yet potentially rewarding, approach to achieving a yearly passive income of $70,000.
The core of this strategy hinges on building a diversified portfolio of dividend-paying stocks listed on the Australian Securities Exchange (ASX). Dividend investing involves purchasing shares in companies that regularly distribute a portion of their profits to shareholders. These dividends, when accumulated, can create a steady stream of income, effectively working as a passive income source.
The article emphasizes the importance of long-term wealth creation and consistent cash flow. Rather than focusing on quick gains or speculative investments, the suggested method leans towards a more patient and sustainable approach. This involves identifying established, profitable companies with a history of consistent dividend payouts. Sectors like banking, resources, and telecommunications often feature companies that fit this profile.
Reaching a $70,000 annual passive income requires a significant initial investment. The exact amount will depend on the average dividend yield of the chosen stocks. For example, if the portfolio yields an average of 4% per year, an investment of $1.75 million would be needed to generate $70,000 annually.
However, the article likely highlights that this is not an all-or-nothing scenario. Building towards that goal can be achieved incrementally over time through consistent contributions and reinvesting dividends. Reinvesting dividends, a process known as compounding, allows investors to purchase more shares, further boosting future dividend income.
While the article suggests a 'simple' method, it's crucial to remember that investing in the stock market always carries risk. Dividend payments are not guaranteed and can be reduced or suspended depending on a company's financial performance. Thorough research, diversification across different sectors, and a long-term perspective are essential elements for success. Consulting with a qualified financial advisor is also highly recommended before making any investment decisions. The promise of a $70,000 passive income is alluring, but achieving it requires diligence, patience, and a well-thought-out investment strategy.
The core of this strategy hinges on building a diversified portfolio of dividend-paying stocks listed on the Australian Securities Exchange (ASX). Dividend investing involves purchasing shares in companies that regularly distribute a portion of their profits to shareholders. These dividends, when accumulated, can create a steady stream of income, effectively working as a passive income source.
The article emphasizes the importance of long-term wealth creation and consistent cash flow. Rather than focusing on quick gains or speculative investments, the suggested method leans towards a more patient and sustainable approach. This involves identifying established, profitable companies with a history of consistent dividend payouts. Sectors like banking, resources, and telecommunications often feature companies that fit this profile.
Reaching a $70,000 annual passive income requires a significant initial investment. The exact amount will depend on the average dividend yield of the chosen stocks. For example, if the portfolio yields an average of 4% per year, an investment of $1.75 million would be needed to generate $70,000 annually.
However, the article likely highlights that this is not an all-or-nothing scenario. Building towards that goal can be achieved incrementally over time through consistent contributions and reinvesting dividends. Reinvesting dividends, a process known as compounding, allows investors to purchase more shares, further boosting future dividend income.
While the article suggests a 'simple' method, it's crucial to remember that investing in the stock market always carries risk. Dividend payments are not guaranteed and can be reduced or suspended depending on a company's financial performance. Thorough research, diversification across different sectors, and a long-term perspective are essential elements for success. Consulting with a qualified financial advisor is also highly recommended before making any investment decisions. The promise of a $70,000 passive income is alluring, but achieving it requires diligence, patience, and a well-thought-out investment strategy.
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