I think one of the best things about the ASX share market is that we can buy pieces of businesses that help grow our wealth over time, so we can eventually retire.

Compounding is a very powerful tool that can help grow a dollar into significantly more over the years.

We don’t need to run these businesses ourselves. That’s up to management and all other staff at those companies.

Whether that’s some of the world’s biggest companies or some of the up-and-coming ASX shares, we can invest in ideas that can grow over time.

By regularly investing, spending less than we earn, and possibly using superannuation, an Aussie can build a very rewarding level of annual passive income.

Let’s get into what it would take if someone wants to reach $85,000 of investment income each year by 50.

Compounding and building wealth

Compounding helps accelerate our net worth because we don’t need to add as much money to reach a financial goal.

For example, if someone invested $500 per month and it returned 10% per year, it would be worth $1.09 million after 31 years. About $905,000 of that total would come from returns, and only $186,000 would come from the actual deposits.

But I’m sure readers wanting to retire at 50 will want to reach their goal faster than 31 years.

So, let’s assume share market investments continue to return an average of around 10% and run through a few scenarios.

First, let’s double the monthly investment to $1,000 and see what happens then.

By investing $1,000 per month, a 25-year-old investor could reach $1.18 million after 25 years.

If someone aged 30 invested $2,000 per month, they could reach a portfolio value of $1.375 million.

Maybe someone is aged 35 and they have just 15 years to reach 50. Let’s imagine that person saves really hard and invests $3,500 per month. That could reach $1.33 million in that time.

Everyone has a different financial position, so I don’t know how much each household can save, but the above shows how people can regularly put money toward their net worth and eventually retire early.  

Unlocking $85,000 a year of annual passive income

Getting $85,000 each year would be a very good amount to retire on.

However, it would require investors from the above examples to target solid grossed-up dividend yields which typically include franking credits.

For example, accessing $85,000 on a $1.18 million portfolio means finding a 7.2% dividend yield. The sorts of businesses I’d target for that yield include Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG), Charter Hall Long WALE REIT (ASX: CLW), Dexus Industria REIT (ASX: DXI) and WCM Global Growth Ltd (ASX: WQG).

The other end of my target was generating $85,000 from a $1.375 million portfolio. This works out to be a dividend yield of 6.2%. With that target in mind, I’d look at stocks like MFF Capital Investments Ltd (ASX: MFF), Centuria Industrial REIT (ASX: CIP), and
PM Capital Global Opportunities Fund Ltd (ASX: PGF).

By mixing a portfolio of good local shares and international exposure, retirees can build a pleasing stream of passive income, such as $85,000 by age 50.

The post How much do I need to retire on $85,000 a year at 50? appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• These 2 ASX shares make up around 40% of my portfolio
• Why this ASX dividend share is a retiree’s dream for 2027
• MFF Capital vs PM Capital Global Opportunities: Which LIC is the better investment today?
• $3,000 buys 1,463 shares in an impressively reliable ASX dividend stock

Motley Fool contributor Tristan Harrison has positions in Future Generation Australia, Future Generation Global, Mff Capital Investments, Rural Funds Group, and Wcm Global Growth. 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 Mff Capital Investments and Rural Funds Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Westpac vs National Australia Bank shares: Which big bank could be the better buy?

If you’re weighing up Westpac Banking Corp (ASX: WBC) against National Australia Bank Ltd (ASX: NAB), you’re not alone. These two stalwarts sit among the ‘big four’ and anchor many Aussie portfolios and super funds. Their sheer size and history make both popular for long-term income seekers, but subtle differences in dividends, valuation and recent price momentum could tip the scales if you’re looking for a potential edge.

The case for Westpac

Westpac is Australia’s oldest bank, dating all the way back to 1817. Today, it holds one of the largest footprints of any financial institution in the country with a range of consumer, business and wealth banking brands including St.George, Bank of Melbourne, BankSA and BT. Westpac provides everything from mortgages and deposits to institutional banking.

Three fundamentals stand out for me:

• Dividend yield: 4.49% with 100% franking, making it attractive for income-focused investors, especially those seeking tax-effective payouts.
• P/E ratio: 16.91, putting Westpac at a lower valuation than NAB on this simple metric.
• Earnings per share: $2.029, marginally higher than NAB’s reported figure.

Dividend stability and a long track record add to Westpac’s appeal. According to its most recent public description, Westpac remains one of the top listed companies on the ASX, backed by diversified operations across both retail and institutional markets.

The case for National Australia Bank

NAB is another giant, tracing its present structure to 1982 and serving millions across Australia and New Zealand, with international outposts in the UK, the US and Asia. It delivers a similar suite – home loans, business banking, wealth management – with a significant focus on both domestic and overseas growth.

Here are its key drawcards:

• Dividend per share: $1.70, higher than Westpac’s $1.54 (as per the latest data), and also fully franked.
• Market cap: $119.71 billion, fractionally above Westpac and suggesting slightly more investor confidence in the current climate.
• Dividend yield: 4.42% – only a whisker below Westpac’s but with a higher absolute dividend payment per share.

NAB’s broader international exposure and a reputation for steady payouts, as reinforced by its company profile, cement its spot at the top end of the ASX.

Valuation comparison

Let’s put the most relevant metrics head-to-head:

	Westpac	NAB
Market Cap	$117.80b	$119.71b
P/E Ratio	16.91	19.25
Dividend Yield	4.49%	4.42%
Dividend per Share	$1.54	$1.70
EPS	$2.029	$2.000
Franking	100%	100%

Westpac currently trades at a lower P/E multiple than NAB, meaning you’re paying a little less per dollar of reported earnings. The dividend yields are close (Westpac higher by 0.07 points), but NAB’s dividend per share is larger. EPS is almost neck and neck. Note: NAB’s higher dividend payout versus similar earnings per share could indicate either a higher payout ratio or greater profit stability – but payout ratios themselves weren’t in the data provided for this comparison.

Recent share price momentum

Comparing recent share price performance up to I’ll use 5 October 2026:

• Westpac: Closed at $34.44 as of 5 October 2026, finishing the day 0.35% higher.
• NAB: Closed at $38.40 on the same date, registering a 0.26% intraday dip.
• Year to date: Westpac is down -9.1% YTD, while NAB has dropped -7.0% over the same period.

Both banks have had a soft year, but NAB’s share price has held up a touch better so far in 2026.

Which is the better buy?

Both Westpac and NAB offer strong brand power, broad services and full franking—a trio of traits most Aussie income investors prize. If what you want is a slightly higher yield and lower valuation, I think Westpac edges ahead, especially if you believe the market is being too harsh with its recent price drop. Its P/E ratio undercuts NAB by a useful margin, and with a fully franked yield, that’s a handy combo for value-conscious portfolios.

On the other hand, NAB’s larger dividend payment and slightly lower share price volatility this year are also hard to ignore. But paying a higher P/E for almost the same underlying earnings and yield doesn’t sway me. For my money, I’d lean toward Westpac for its blend of yield and comparative valuation at current prices—while fully acknowledging that the margin is slim, not overwhelming. Ultimately, both are formidable blue-chip foundations, but in a straight shootout based on the latest numbers, my pick would be Westpac.

The post Westpac vs NAB shares: Which big bank is the better buy? appeared first on The Motley Fool Australia.

More reading

• How much could the big 4 banks’ share prices fall?
• How much superannuation do I need to earn $56,000 per year in passive income?
• Fortescue vs National Australia Bank: Which ASX blue chip is the better buy this month?
• If I invest $10,000 in ANZ shares, what passive income could I receive in FY27?
• Are ASX 200 bank stocks a buy in October?

Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

A $100,000 ASX share portfolio is a significant milestone.

But how much passive income could it actually generate?

Let’s run the numbers and find out.

What could $100,000 generate?

A reasonable target for an income-focused ASX portfolio could be a dividend yield of around 4% to 5%.

At a 4% yield, a $100,000 portfolio would generate approximately $4,000 in passive income each year.

Increase the yield to 5% and that rises to $5,000 annually. That is before tax and does not include the potential benefit of franking credits.

I wouldn’t simply search the ASX for the shares offering the biggest dividend yields, though. Very high yields can sometimes be a warning sign that investors expect the dividend to be reduced.

Instead, I would look for businesses with sustainable cash flows and a reasonable prospect of maintaining or growing their distributions over time.

Infrastructure stocks could play a role. APA Group (ASX: APA), for example, owns energy infrastructure that generates relatively predictable cash flows, while Transurban Group (ASX: TCL) collects toll revenue from major road networks.

Property could provide another source of income. HomeCo Daily Needs REIT (ASX: HDN) owns assets exposed largely to everyday spending and currently offers a higher distribution yield than many traditional blue-chip shares.

These could be mixed with established dividend payers such as Wesfarmers Ltd (ASX: WES), rather than relying too heavily on any individual company or sector.

Another way to use the $100,000

There is also an alternative for investors who don’t need the passive income today.

Rather than immediately building a portfolio around dividends, I think there is a strong case for focusing on total returns and allowing the $100,000 to compound for longer.

For example, if $100,000 grew at an average rate of 10% a year with all income reinvested, it could become approximately $260,000 after 10 years.

At a 5% yield, that larger balance could then generate around $13,000 in annual passive income.

After 20 years, the same $100,000 could grow to approximately $670,000 at that return.

A 5% yield on that balance would generate around $33,500 a year.

Of course, a 10% annual return isn’t guaranteed.

But I think it shows why investors with time on their side may want to concentrate on growing the portfolio first and worry about maximising passive income later.

The post How much passive income can I make from a $100,000 ASX share portfolio? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 defensive ASX shares I’d buy in a market sell-off
• Buy, hold, sell: Goodman, Wesfarmers, BHP shares
• 3 excellent ASX dividend shares with 5%+ yields
• Origin Energy vs APA Group: Which ASX dividend share wins?

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 positions in and has recommended Transurban Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Apa Group and Transurban Group. The Motley Fool Australia has recommended HomeCo Daily Needs REIT and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.