How I’d invest $300 a month in ASX shares to target an extra income of $20,000 per year

MotleyFool2023-02-07

Building a passive income from ASX shares is something that anyone can do. And while it doesn’t happen overnight, if you’re both disciplined and patient, generating a $20,000 second income from ASX ...

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MilWha
2023-02-07
MilWha
This sharing open my eyes as a newbie on what kind of stock market is best to generate a good passive income over the next few years or I can just say, annually once the stock yields positive divident 👏👍much thanks for the head-start!

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And while it doesn’t happen overnight, if you’re both disciplined and patient, generating a $20,000 second income from ASX ...</p>\n\n<a href=\"https://www.fool.com.au/2023/02/07/how-id-invest-300-a-month-in-asx-shares-to-target-an-extra-income-of-20000-per-year/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"DMP.AU","symbol_name":"Domino's Pizza Enterprises Ltd","start_time":0,"source_url":"https://www.fool.com.au/2023/02/07/how-id-invest-300-a-month-in-asx-shares-to-target-an-extra-income-of-20000-per-year/","article_id":"2309347491","we_media_id":null,"thumbnails":["https://cdn-dfpai.nitrocdn.com/gJsEsVaCFesDAEYOdjncMdcuJdoeUsXv/assets/images/optimized/rev-339851c/wp-content/uploads/2022/05/Businesswoman-received-a-stack-of-cash-16_9-150x150.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2309347491","pubTimestamp":1675737333,"sourceInfo":{"source_id":"motleyfoolau_stock","name":"MotleyFool"},"weMediaInfo":null,"summary":"Building a passive income from ASX shares is something that anyone can do. 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Getting started Firstly, in order to get a $20,000 a year paycheck from the share market, you’re going to have to build your portfolio to a size that yields this amount in dividends. Given that many banks like Westpac Banking Corp (ASX: WBC) and high-yield ASX ETFs offer 6% yields for investors, we’ll base our calculations on that. To be paid $20,000 of dividends each year when earning a 6% dividend yield, you’ll need a portfolio of ASX shares valued at approximately $330,000. When you’re starting out, that might seem like an unattainable goal, but I don’t believe it is. Once again, it’s all about patience and discipline. Over the long term, share markets have provided investors with an average annual return of 10%. Unfortunately, I cannot guarantee that this will be the case in the future, but I would be disappointed if future share market returns are not in line with historical levels. If you’re able to invest $300 a month into high-quality ASX shares and generate a 10% average annual return, your portfolio will have grown to be worth $335,000 in 24 years. At that point, you could switch your focus to income and build a diversified portfolio filled with ASX shares offering dividend yields averaging 6%. Doing so would give you a $20,000 second income without having to lift a finger. Speedier options Investors who are able to put a little bit extra into their monthly investments will get there even quicker. For example, investing $500 would grow your portfolio to the required size after a little over 19 years. Can stretch your budget further? Well, $750 would take a touch over 15 years to hit our goal. Which ASX shares should you buy? I would focus on buying ASX shares with strong business models, excellent management teams, competitive advantages, and positive growth outlooks. Companies such as CSL Limited (ASX: CSL), Domino’s Pizza Enterprises Ltd (ASX: DMP), and Goodman Group (ASX: GMG) tick a lot of these boxes for me. Alternatively, you could take the easy option and buy index-tracking ETFs like Betashares Nasdaq 100 ETF (ASX: NDQ) or Vanguard Australian Shares Index ETF (ASX: VAS). These funds aim to provide you with the return of the respective index before fees.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":9955720694,"gmtCreate":1675778415118,"gmtModify":1675780339914,"author":{"id":"4136874126729862","authorId":"4136874126729862","name":"MilWha","avatar":"https://community-static.tradeup.com/news/bfb7e93c464f9ce8b9de3f8e14ccb7da","vip":1,"hat":"https://static.tigerbbs.com/b073a07f77dbe6b3bec6b12311fde6bd","crmLevel":2,"crmLevelSwitch":1},"htmlText":"This sharing open my eyes as a newbie on what kind of stock market is best to generate a good passive income over the next few years or I can just say, annually once the stock yields positive divident 👏👍much thanks for the head-start!","listText":"This sharing open my eyes as a newbie on what kind of stock market is best to generate a good passive income over the next few years or I can just say, annually once the stock yields positive divident 👏👍much thanks for the head-start!","text":"This sharing open my eyes as a newbie on what kind of stock market is best to generate a good passive income over the next few years or I can just say, annually once the stock yields positive divident 👏👍much thanks for the head-start!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/9955720694","repostId":2309347491,"repostType":2,"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"isCommentEnd":false,"newsSizeData":{"likeSize":1,"commentSize":1,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.2","shortVersion":"4.24.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2309347491"}