Generating a high level of ASX passive income sounds like a wonderful thing. Imagine seeing $500 flow into your bank account every month, or even $1,000.

So how much are people willing to sacrifice to make that happen? The price could be as little as a daily coffee.

Find those savings

When it comes to money, everyone’s finances are different. Someone earning $1 million a year has more financial flexibility to allocate to investing each month than the average income earner.

It’s likely household budgets are tighter these days after all the inflation and interest rate hikes.

If someone has only a little money to invest each month after paying for the bare essentials, then it comes down to choices. It’d be easy to say, “get a better-paying job”, but sometimes that’s not an option.

Working longer and longer hours may not be the best choice either – we aren’t robots. Having a break, taking care of yourself, and spending time with family and friends are usually good things for life and enjoyment.

For me, I’d rather avoid spending a certain amount each month than give up my time doing something that I enjoy.

It’s about the dollar amount saved rather than the activity or product itself. Everyone spends on different stuff. If we want to make ASX passive income, we need to come up with some savings. It could be the $5 or $10 daily coffee, it could be subscriptions like Netflix and Foxtel, or something else.

The idea is to cut out spending that isn’t truly making a difference to our happiness.

How much ASX passive income could we make?

Let’s say we cut $40 a week out of spending and start investing that into ASX shares. That translates into $2,080 per year if we save every single week.

Saving $2,000 doesn’t make us an instant millionaire. Investing $2,000 with a 6% dividend yield would create $120 of annual ASX passive income. That’s not a bad start, and the $120 would hopefully grow with organic business dividend increases over time.

But, the power of compounding can help us make that $40 a week grow much bigger.

If we invested $40 a week for 10 years, and the share portfolio achieved total returns of 10% per year, that would grow to $33,150. With a 6% dividend yield, this would generate around $2,000 of annual ASX passive income.

Doing that same exercise but running it for 20 years, the portfolio could grow to be worth $119,132. With a 6% dividend yield, that’d turn into around $7,150 of annual dividends or almost $600 per month.

That’s a lot of extra cash flow, right? Investors just need to decide what they’re willing to do to save while still enjoying life.

The post Would you trade your daily coffee for ASX passive income? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Get an income boost with these ASX dividend shares: broker
• How I’d generate a $30,000 retirement income from the Vanguard Australian Shares Index ETF
• 2 highly-rated ASX growth shares to buy according to experts
• How do I cash in my Newcrest shares if US giant Newmont takes over?
• Forget term deposits! I’d listen to Warren Buffett and invest $250 a month to try to retire rich

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/ioHkZ1N

Wanting a passive income boost? If you are, then you may want to consider the two dividend shares listed below.

Both are rated as buys by Morgans and tipped to provide investors with attractive dividend yields in the near term. Here’s what you need to know about them:

Coles Group Ltd (ASX: COL)

The first ASX dividend share that Morgans has tipped as a buy is Coles.

Its analysts are positive on the supermarket giant due to its defensive qualities, favourable changes in consumer shopping trends, and its solid balance sheet. It commented:

We continue to see COL as offering good value with the company’s solid balance sheet and defensive characteristics putting it in a good position to navigate through a weaker economic environment. The unwinding of local shopping should also help further market share gains.

Morgans has an add rating and $19.50 price target on its shares.

As for dividends, the broker is expecting fully franked dividends per share of 64 cents in FY 2023 and 66 cents in FY 2024. Based on the current Coles share price of $17.93, this implies yields of 3.55% and 3.7%, respectively.

Mineral Resources Ltd (ASX: MIN)

Another ASX dividend share that Morgans rates as a buy is Mineral Resources.

Its analysts like the mining and mining services company due to its exposure to lithium and iron ore. It believes they are an ideal combination to benefit from the China re-opening. The broker said:

We see MIN’s lithium / iron ore market exposures as an ideal combination to benefit from the China re-opening increase in demand during 1H’CY23. We also see MIN as well placed to grow into its valuation, even if we see unexpected metal price volatility, given the magnitude of organic growth in the pipeline.

Morgans currently has an add rating and $99.40 price target on its shares.

In respect to dividends, Morgans is forecasting fully franked dividends of $4.04 per share in FY 2023 and $6.21 per share in FY 2024. Based on the current Mineral Resources share price of $89.65, this will mean 4.5% and 6.9% dividend yields, respectively.

The post Get an income boost with these ASX dividend shares: broker appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Morgans just added these ASX 200 shares to its best ideas list
• These ASX 200 shares are top picks in Macquarie’s growth portfolio
• With interest rates heading higher again, the risk is to the downside for these popular blue chip ASX shares
• 2 ASX stocks I’d buy in February for lifelong passive income
• Does the Coles dividend forecast make it a great buy for income?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/ljxM8aR