Investing $500 a month may not sound like enough to change your life.

But give it enough time and the numbers can become surprisingly large.

That is the power of combining regular investing with compounding.

But what about income? Could it help build a major source of passive income? Let’s run the numbers.

Why $500 a month can go a long way

One of the best things about investing regularly is that you do not need to worry too much about finding the perfect time to buy.

By putting $500 into ASX shares like CSL Ltd (ASX: CSL), Goodman Group (ASX: GMG), or Wesfarmers Ltd (ASX: WES) every month, you will inevitably buy during strong markets, weak markets, corrections, and everything in between.

This is called dollar-cost averaging or DCA.

It takes some of the emotion out of investing and turns wealth building into a habit, allowing compounding to start doing more of the work.

What could the passive income look like?

After 10 years of investing $500 a month, the portfolio would be worth approximately $100,000 based on a 10% average annual return. That return is not guaranteed, but it is achievable and largely in line with historical share market returns.

If an investor then moved that money into a portfolio producing a 5% dividend yield, it could generate around $5,000 of passive income each year.

But why stop there? If you keep going for another decade then things start becoming much more substantial.

For example, after 20 years, the portfolio could be worth roughly $360,000. At a 5% dividend yield, that could produce almost $18,000 a year in passive income.

By year 30, compounding has had even more time to work its magic. All else equal, the portfolio would be worth approximately $1 million, capable of generating around $50,000 a year at a 5% yield.

And after 40 years, the same $500 monthly investment could potentially grow to approximately $2.8 million.

A portfolio of that size yielding 5% could produce almost $140,000 a year in passive income. Not bad!

Key takeaway  

Investing for passive income is something that takes time. But as the examples above demonstrate, it certainly can be worth the patience.

The main thing is getting started. Investing $500 a month into ASX shares may not look meaningful today. But repeated hundreds of times and given decades to compound, it can become something very material.

The post How much passive income could I make by investing $500 a month in ASX shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in CSL and Goodman Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goodman Group, and Wesfarmers. The Motley Fool Australia has recommended CSL, Goodman Group, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Light & Wonder vs Aristocrat Leisure shares: which gaming giant is better?

When it comes to the world of gaming technology, both Light & Wonder (ASX: LNW) and Aristocrat Leisure Ltd (ASX: ALL) are heavyweights that regularly come up in discussions among keen Aussie investors. If you’re tossing up between these two innovative consumer discretionary companies, this side-by-side look at their fundamentals, performance, and outlook should help you decide which could be the smarter buy today.

The case for Light & Wonder

Light & Wonder, based in Las Vegas, develops and supplies technology-based gaming products and services to casinos and digital platforms. The company operates through three key segments: Gaming (physical machines and platforms for casinos), SciPlay (digital games for mobile and web), and iGaming (real-money online gaming and sports wagering solutions). According to its most recent public description, Light & Wonder draws on decades of experience to deliver content and platforms across both land-based and digital gaming.

Looking at the latest numbers, Light & Wonder currently has a market cap of $9.53 billion, making it a significant player but still notably smaller than Aristocrat. Its price-to-earnings (P/E) ratio stands at 25.88, and its earnings per share (EPS) is $3.40. Interestingly, the company doesn’t currently pay a dividend, so it’s more a growth-focused pick. Its year-to-date (YTD) return sits at –21.93%, so 2026 has been tough for LNW holders so far.

The case for Aristocrat Leisure

Aristocrat Leisure is one of Australia’s best-known global gaming companies, with operations in around 100 countries and licences in more than 340 gaming jurisdictions. The group divides its business into three arms: its core gaming technology (slot machines and casino systems), Aristocrat Interactive (real-money digital gaming), and Product Madness, which creates highly popular free-to-play mobile games. Though its roots are in land-based pokies, Aristocrat has pushed hard into the digital and US markets, and according to its most recent company profile, is now a true global player.

On the numbers, Aristocrat is a giant with a market cap of $36.72 billion. Its P/E ratio is virtually identical to Light & Wonder at 25.90. Notably, Aristocrat does pay a dividend, with a yield of 1.61% and a current dividend per share of $0.99. Unlike Light & Wonder, it’s delivered a positive YTD return of 6.57%, showing resilience in the recent market.

Valuation comparison

Here’s how the key numbers stack up:

Metric	Light & Wonder	Aristocrat Leisure
Market Cap	$9.53 billion	$36.72 billion
P/E Ratio	25.88	25.90
Dividend Yield	0.00%	1.61%
Earnings per share	$3.400	$2.374
YTD Return	-21.93%	6.57%

While both trade on almost identical P/E ratios, Aristocrat is much larger, is paying a dividend, and has delivered a positive YTD return.

Recent share price performance

Let’s look at the recent share price trends, comparing share price performance from 18 August 2026 to 16 September 2026.

• Light & Wonder closed at $133.25 on 18 August 2026 and finished at $123.68 on 16 September 2026, representing a decline of around 7.2% over the period.
• Aristocrat Leisure closed at $63.41 on 18 August 2026 and at $61.50 on 16 September 2026, a fall of approximately 3% over the same stretch.

In other words, both shares have slipped over this four-week snapshot, but Light & Wonder’s decline has been noticeably steeper.

Which is the better buy?

Based on the most recent data, my pick between these two is clear: I’d lean toward Aristocrat Leisure. Here’s why. Both companies are tech-savvy gaming leaders, but Aristocrat is steadier and offers shareholders a dividend stream. The company’s positive YTD return of 6.57% versus Light & Wonder’s –21.93% signals underlying strength. Both trade on similar P/E multiples, so Aristocrat doesn’t look overpriced versus its smaller rival. Light & Wonder may still offer growth potential down the track, but based on current momentum and yield, Aristocrat looks the more compelling buy today.

The post Light & Wonder vs Aristocrat Leisure: Which gaming share wins? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Light & Wonder Inc. The Motley Fool Australia has recommended Light & Wonder Inc. 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.

Fast-food operators are likely to face some headwinds over the coming year, broking house Morgans says, but there is still room for savvy operators to grow.

Share price gains still on the table

Morgans has named two companies as their top picks in the sector, with share price targets that imply solid gains for investors.

But the broking house warns that the consumer outlook is continuing to weaken, with interest rate rises at the centre of that theme.

Morgans said:

The RBA is back at 4.35% after three rises this year and looks set to hike again in late September. Consumer sentiment has dropped to 84.4, below neutral and weaker than a year ago, with real incomes still going backwards. We expect FY27 to be a tougher year for the consumer than FY26.

The broker said that for fast-food operators, growth has to come from increased sales, not price, “because a household absorbing a fourth rate rise will likely trade down or out if prices rise further again”.

They added:

Operators that lift revenue without leaning on price can hold margins as the cost base inflates, while those still taking price to cover soft comps risk losing volume. The sustainable way to hold margin is to grow the top line on traffic, attach and mix behind a value proposition strong enough that customers keep coming without price cuts.

Broker names its two picks

Morgans’ top pick in the sector is Guzman Y Gomez Ltd (ASX: GYG), with a price target of $31 against $25.04 at the time of writing.

They said:

It is the highest-quality operator in our coverage, with strong unit economics and ambitious but achievable FY30 targets. It took the least price and still grew same store sales 5.3%, almost all on traffic, and its fresh, protein-led menu aligns best with consumer trends. Management has commenced the buy back and, given its strict capital allocation and ROI hurdles, we view this as a clear demonstration of where it sees value. The next catalyst is the quarterly trading update in October.

Second in line is Collins Foods Ltd (ASX: CKF), with Morgans having a price target of $10.60 against $7.93 at the time of writing.

Morgans said re Collins Foods:

In our view, CKF screens cheap and holds a strong value proposition, given KFC’s well placed value menu in a tough consumer environment. Kwench and daypart expansion into late-night and breakfast add further opportunity to attach and increase traffic. The growth opportunity in Germany is not priced in by the market, and we see the midpoint of its store opening target (45-90 by FY30, without acquisitions) as achievable.

Morgans has a hold rating on Domino’s Pizza Enterprises Ltd (ASX: DMP) with a price target of $20 compared to $19.45 at the time of writing.

The post These 2 ASX fast food companies could jump 23% to 33% appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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 Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Collins Foods and Domino’s Pizza Enterprises. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.