Building a portfolio of ASX shares that can generate income alongside your usual earnings is a great way to enhance your financial security and diversify your income streams.
To generate the target of $5,000 per year in dividend income, you'd be looking at amassing about $100,000 in capital.
If you'd like to tweak the calculations yourself, head over to the Federal Government's Moneysmart calculator and have a play around.
Investment company Wam Active Ltd is paying 7.4%, while Argo Investments Ltd is paying 4.18%.
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I'd argue you could generate about 7% per year from a combination of capital increases and dividends. Tolls roads operator Atlas Arteria Ltd is a reasonable company to consider, as it is currently paying a 9% yield, with brokers expecting a relatively strong yield to be maintained for the next few years.
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The article, shortened and in plain language
Building a portfolio of ASX shares that can generate income alongside your usual earnings is a great way to enhance your financial security and diversify your income streams.
Generating earnings from dividends does however demand amounts of savings, and getting there can seem an insurmountable task.
Therefore, it's good to start relatively small, and use the power of compound interest to your advantage.
To generate the target of $5,000 per year in dividend income, you'd be looking at amassing about $100,000 in capital.
Over a nine-year period, and assuming a return of 7% per year, you would have $99,055 at the end of this time.
If you'd like to tweak the calculations yourself, head over to the Federal Government's Moneysmart calculator and have a play around.
Once you hit the $100,000 mark, if you choose, you could start taking your dividends out as an income stream rather than reinvesting them.
Investment company Wam Active Ltd is paying 7.4%, while Argo Investments Ltd is paying 4.18%.
Among the banks, Westpac Banking Corp is paying 4.47% while Bank of Queensland Ltd is paying 6.1%.
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