How much do I need to invest in ASX shares for $100 in weekly passive income?

It’s a well-known fact that many, if not most, ASX shares pay their investors dividends on a regular basis. Name a prominent blue-chip ASX share, and chances are they will be giving their investors passive income in dividend form.

That’s certainly the case for everything from Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP) to JB Hi-Fi Ltd (ASX: JBH) and Telstra Group Ltd (ASX: TLS).

But how much would you need to gain yourself a meaningful stream of secondary, passive income? Say $100 per week?

Well, let’s answer that right now.

The answer is somewhat complicated because every ASX share pays out a different dividend and thus offers a different dividend yield. Most ASX shares pay bi-annual dividends, so investors get a paycheque every six months. But some do quarterly, or even monthly, dividends.

So $100 per week works out to be $5,200 per year.

Thus, one would need $100,000 in a dividend-paying share with a 5.2% yield to gain $100 a week in dividend income.

But let’s use some real-life examples. Sure, you could start with CBA. Commonwealth Bank shares currently have a dividend yield of 4.37%. This means you would need to have around $119,000 invested to get $100 per week in income.

Or else JB Hi-Fi. It’s currently boasting a dividend yield of 8.36%, meaning you would only need just over $62,000 for that same level of income.

But we’ll use an ASX-wide exchange-traded fund (ETF) for our analysis, since this gives a more accurate representation of what income the entire share market produces for investors.

How much do you have to invest in ASX shares for $100 a week in passive income?

So over the past 12 months, the Vanguard Australian Shares Index ETF (ASX: VAS) has doled out $6.36 in dividend distributions per share. This index fund covers every share on the ASX 300 Index (all 300 of them), so this dividend payment is a reflection of the income that these 300 shares have generated over the past year.

On current pricing, this trailing dividend record gives this ETF a distribution yield of 7.22%. So we would have needed around $72,000 invested to get our $100 per week.

But dividends from ASX shares change all the time. To illustrate, this ETF only paid out $3.42 in dividend distributions per unit over 2021. That would work out to a yield of almost half of what we had in 2022 – 3.88%.

Thus, if that was our yield, we would need around $130,000 invested to get the same dividend cash flow.

So it’s hard to pinpoint an exact number to get a consistent yield of $100 per week from ASX dividend shares. But one thing is certain: if you choose quality shares, your income will go up over the long term.

The post How much do I need to invest in ASX shares for $100 in weekly passive income? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Telstra Group and Vanguard Australian Shares Index ETF. 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 Telstra Group. The Motley Fool Australia has recommended Jb Hi-Fi. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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