Imagine receiving $50,000 a year without having to work for it.

That could make a huge difference to your lifestyle, particularly if you are approaching retirement or hoping to work fewer hours.

And while building a portfolio capable of producing this much income will take time, ASX shares could help you get there.

Here’s how it could be done.

Start by building wealth

The first thing to understand is that a $50,000 passive income requires a substantial investment portfolio.

If the goal is to generate this income from dividends with an average dividend yield of 5%, you would need approximately $1 million invested.

That might sound intimidating, but nobody needs to start with $1 million.

In fact, the early years should probably be focused on growing the portfolio rather than generating income.

This could mean investing in quality ASX growth shares such as Goodman Group (ASX: GMG), ResMed Inc (ASX: RMD), and Xero Ltd (ASX: XRO).

Blue chip shares and exchange traded funds (ETFs) could also help build wealth over time.

The aim would be to own investments capable of increasing in value over many years, while reinvesting any dividends received.

Let compounding do its work

Regular investing can make a significant difference to the journey.

For example, investing $500 a month and achieving an average annual return of 10% could grow a portfolio to approximately $1 million in 30 years.

Increase that to $1,000 a month and the same target could be reached in around 23 years.

These returns are not guaranteed, and actual returns will vary from year to year, but they demonstrate how powerful regular investing and compounding can be.

Over time, an increasing portion of the portfolio’s growth can come from investment returns rather than new contributions.

Turn the portfolio into an income generator

Once the portfolio approaches $1 million, investors could start shifting their focus towards ASX dividend shares.

That could include infrastructure companies such as APA Group (ASX: APA) and Transurban Group (ASX: TCL), which own assets capable of generating cash flow over long periods.

Property investments such as HomeCo Daily Needs REIT (ASX: HDN) and Charter Hall Long WALE REIT (ASX: CLW) could provide another source of income.

Established businesses such as Woolworths Group Ltd (ASX: WOW) and Wesfarmers Ltd (ASX: WES) could also have a place in the portfolio.

And for investors who would rather not select every dividend share themselves, an income-focused ETF such as the Vanguard Australian Shares High Yield ETF (ASX: VHY) could be worth considering.

Final word

Overall, I think this demonstrates that the share market can be a great place to generate a passive income.

Investors just need a combination of patience, capital, and good investments. The rest will happen in time.

The post How to build a $50,000 passive income from ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Goodman Group, ResMed, Woolworths Group, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group, ResMed, Transurban Group, Wesfarmers, and Xero. The Motley Fool Australia has positions in and has recommended Apa Group, ResMed, Transurban Group, and Xero. The Motley Fool Australia has recommended Goodman Group, HomeCo Daily Needs REIT, Vanguard Australian Shares High Yield ETF, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

With the Australian markets, and the S&P/ASX 200 Index (ASX: XJO) specifically, being on quite the roller coaster of 2026 to date, ASX investors have arguably never valued the security of receiving dividend income more. Share prices have risen and fallen this year, minting on-paper gains and losses respectively. But dividends represent locked-in returns, making them a valuable cushion for all the volatility that this year has brought thus far. With that in mind, let’s talk about three ASX dividend shares that I would buy for income in September 2026.

Three ASX dividend shares to buy for income today

First up, we’ll start with a favourite of dividend investors. Telstra Group Ltd (ASX: TLS) has long been a top pick for those seeking income on our share market. This venerable telco has been a hefty dividend payer for decades. This company’s dominant mobile infrastructure and superlative network coverage make it the first choice for millions of Australians seeking reliable mobile or fixed-line internet and telephony.

This makes Telstra’s earnings base, and thus dividend capacity, highly resilient. At recent prices, Telstra shares were trading on a decent dividend yield of 4.35%.

Next, let’s talk Coles Group Ltd (ASX: COL). Coles is an ASX dividend share that offers many of the desirable defensive characteristics that make Telstra a top income pick. It is a dominant supermarket operator, with stores within reach of the vast majority of the population. As a provider of consumer staples (life’s essentials like food, drinks and household supplies), Coles is a company that is well-placed to weather any kind of bad economic weather, including inflation and recessions. That makes it a formidable dividend stock for those seeking income certainty.

Coles is currently trading with a dividend yield of 3.41%, which comes with full franking credits attached too.

Last but not least…

A final stock to consider for income is the listed investment company (LIC) MFF Capital Investments Ltd (ASX: MFF). Like most LICs, MFF holds an underlying portfolio of investments that it manages on behalf of its shareholders. In this case, that underlying portfolio is mostly made up of US stocks. These include many household names, such as Alphabet, Amazon, Mastercard, and Visa.

MFF is one of the ASX’s most impressive dividend growth stocks. The company has increased its annual payout every year for almost a decade now, and at breakneck speed too. To illustrate, the company has gone from paying 6.5 cents per share in 2021 to a planned 21 cents in 2026. Those dividends all come fully franked as well. Today, MFF shares trade on a trailing dividend yield of 3.83%

The post 3 for income: I’d buy these ASX shares for dividends today appeared first on The Motley Fool Australia.

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• Why I’d buy and hold these ASX passive income shares
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Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, Mastercard, Mff Capital Investments, and Visa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Mastercard, and Visa. The Motley Fool Australia has positions in and has recommended Mff Capital Investments and Telstra Group. The Motley Fool Australia has recommended Alphabet, Amazon, Mastercard, and Visa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

I believe long-term investing is the best approach for ASX shares. It gives our investments more time to compound into a pleasing number.

If $1,000 rises 10%, it becomes $1,100. But if an investment grows at 10% each year for eight years, it’ll grow to $2,143. Simply achieving a solid rate of return over a long time period can lead to good results.

I’m optimistic that the following two investments can compound for a long time to come at a good pace.

Guzman Y Gomez Ltd (ASX: GYG)

Guzman Y Gomez is a Mexican food business with restaurants in Australia, Singapore and Japan. Some of the Australian locations are corporate-owned, while the rest across Australia and Asia are franchise operations.

In terms of its compounding growth, the ASX share is delivering impressive results.

Network sales have grown at an impressive rate year after year. In FY26, Australian network sales grew 17.9% to $1.29 billion and Asian network sales rose 17.9% to $87.1 million. Total network sales grew 17.9% to $1.38 billion.

When a company’s top line is growing in the teens, it looks like an appealing investment to me. Within that, comparable sales growth is an important driver of network sales because it means the existing network is growing. In FY26, comparable sales growth was 5.3%.

I’m optimistic the company’s restaurant network can keep growing. In FY26, it added 32 Australian locations to bring the total to 255. Singapore saw three more restaurants added to 24 locations. Japan maintained five locations during the period.

It expects both the Singapore and Japan networks to grow in FY27. In Australia, it expects to open 35 new restaurants, three more than it opened in FY26.

GYG wants to reach 1,000 Australian restaurants within the next 20 years, which means a lot of compounding.

Net profit could grow even faster. FY26 underlying net profit after tax (NPAT) rose 29.7%. The company expects its operating profit margin to increase in FY27. As it grows, I expect the ASX share’s margins to increase significantly.

Global X S&P World Ex Australia GARP ETF (ASX: GARP)

The other investment I want to highlight is this exchange-traded fund (ETF), which aims to give investors exposure to some of the most attractive global stock ideas.

These 250 stocks in the portfolio have strong earnings growth, solid financial strength and trade at reasonable valuations. The idea of ‘GARP’ stands for growth at a reasonable price. It can be a powerful combination.

To measure growth, the GARP ETF looks at a company’s sales and earnings growth.

Value is measured with the price/earnings (P/E) ratio.

Quality is measured by financial leverage (meaning debt levels) and return on equity (ROE).

Since inception in September 2024, the GARP ETF has returned an average of 15.4% per year. I think virtually any ASX share would be happy to generate a return of that size.

The post 2 top ASX shares to buy and hold for the next decade appeared first on The Motley Fool Australia.

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• Up 67%! Is it too late to buy the rally in Guzman Y Gomez shares now?
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Motley Fool contributor Tristan Harrison has positions in Guzman Y Gomez. 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.