Passive income is one key reason to invest in ASX shares.

Once you have built a large enough portfolio, money can arrive in your account without having to work another hour for it.

That could eventually mean extra holidays, fewer days at work, help with household bills, or simply more freedom.

Yet I think many people underestimate what they could build by starting with relatively modest amounts.

Let’s look at what could happen with $500 a month.

Getting started

Investing $500 does not feel life-changing in itself.

Even after a year, you would have contributed just $6,000.

But the real value of those early investments is the amount of time they have to compound.

If $500 were invested every month and the portfolio generated an average return of 10% per annum, the balance could grow to approximately $100,000 after 10 years.

After 15 years, it could be worth around $200,000.

And after 20 years, the portfolio could reach approximately $360,000.

These figures assume returns are reinvested and are only illustrations. A 10% annual return is possible to achieve, but certainly not guaranteed.

Overall, I think this demonstrates how seemingly small decisions made today can have major consequences decades later.

I wouldn’t chase dividends straight away

If I were starting this portfolio from scratch, income would not be my main priority.

I would want to grow the capital first. That could mean investing in high-quality ASX growth shares such as Xero Ltd (ASX: XRO), Goodman Group (ASX: GMG), and ResMed Inc (ASX: RMD).

Blue chips such as Wesfarmers Ltd (ASX: WES) could also have a role.

And ASX exchange traded funds (ETFs) such as the iShares S&P 500 ETF (ASX: IVV) or Vanguard MSCI Index International Shares ETF (ASX: VGS) could provide exposure to hundreds of global companies.

The aim during these years would be simple. It would be to keep investing, reinvest anything the portfolio pays out, and give compounding as much time as possible.

Turning growth into income

To generate $26,000 of passive income, I would target a portfolio valued at approximately $520,000 and a 5% dividend yield across it.

At our assumed 10% return, investing $500 every month could take the portfolio to this level in roughly 23 years.

Once there, this is when I would start thinking much more seriously about income.

Some of the growth investments could remain, while more money could gradually move toward dividend shares such as APA Group (ASX: APA), Transurban Group (ASX: TCL), HomeCo Daily Needs REIT (ASX: HDN), and Charter Hall Long WALE REIT (ASX: CLW).

A $520,000 portfolio yielding 5% would then produce $26,000 a year.

And all of it could have started with the decision to put aside $500 each month.

The post How to make $26,000 of 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, 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, Xero, and iShares S&P 500 ETF. 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 Msci Index International Shares ETF, Wesfarmers, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The PLS Group Ltd (ASX: PLS) share price has been one of the strongest performers in the S&P/ASX 200 Index (ASX: XJO) of the past year.

As the chart below shows, it has risen by close to 100% in the last 12 months!

After such a large rise, I think it’s worthwhile asking if it’s an opportunity or if it has reached a plateau.

Better lithium prices driving stronger profits

Every shareholder wants to see their business generating pleasing profits. After a difficult couple of years, PLS Group has seen an enormous upswing in its financials thanks to a large increase in the lithium price.

During FY26, the realised (sold) price for its lithium saw a 109% year-over-year increase to US$1,488 per tonne. The company also increased its production by 17% as it ramps up to meet the growing demand.

For FY26, PLS Group reported 152% growth of revenue to $1.9 billion, underlying operating profit (EBITDA) grew 1,067% to $1.1 billion, while net profit after tax (NPAT) soared 608% to $1.36 billion. Its cash margin from operations improved by 608% to $1.36 billion.

The massive improvement of profitability allowed the business to declare a dividend of 5 cents per share.

PLS Group has managed to deliver significant profits while also investing to increase production. The company is working towards its P2000 project target for Pilgangoora, with a pre-final investment decision (FID) investment of around $175 million. The Colina project feasibility study is also progressing, and it has restarted the Ngungaju processing plant.

Overall, it was an excellent year for the business. However, the result wasn’t really a surprise for the market because it was clear that the lithium price was rising throughout the year.

The current PLS Group share price also reflects a lot of the improved positivity about the lithium sector.

Is the PLS Group share price attractive?

The company expects to grow production by at least 17% in FY27, a solid tailwind for earnings growth in the new financial year, though changes in lithium prices could also have a significant impact.

PLS Group highlights that lithium demand is forecast to triple by 2040, with that growth broadening across geographies and end-uses. Electric vehicle demand is growing and solar and wind generation is expected to continue rising, requiring significant energy storage.

The ASX lithium share also suggested that lengthening development timelines could constrain the industry’s ability to meet the growing demand. In the 2010s, mine development took 16 years on average from discovery to production; in this decade, it has taken 18 years on average.

According to CMC Invest, there have been 12 analyst rating calls on the business within the last three months, with seven of those ratings being a buy, three being a hold, and two being a sell.

The average price target from those 12 analysts is $5.52, suggesting a potential rise of about 30% over the next year. That implies the PLS Group share price could be a solid buy today.

The post Is the PLS Group share price a buy in September? appeared first on The Motley Fool Australia.

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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.

The Infratil Ltd (ASX: IFT) share price is in focus today after the company upgraded its FY27 proportionate EBITDAF guidance on soaring data centre demand. Key highlights include contracted capacity at CDC Data Centres reaching 1.1GW and a step-up in earnings outlook for both CDC and US-based Longroad Energy.

What did Infratil report?

• FY27 proportionate EBITDAF guidance lifted to NZ$1,320 million–$1,420 million (previously NZ$1,300 million–$1,400 million).
• CDC Data Centres’ FY27 EBITDAF guidance raised to A$710 million–$750 million (from A$680 million–$720 million) after new contract wins and operating cost savings.
• CDC now has 1.1GW of contracted capacity, expected to deliver A$2.2 billion annualised EBITDAF when fully deployed.
• Longroad Energy is scaling up, acquiring a 2.8GW project and targeting a 14GW energy fleet by 2029.
• One New Zealand continues strong cash generation, growing mobile revenue share and progressing IT simplification.

What else do investors need to know?

Infratil’s portfolio now stands at NZ$22 billion in total assets, with data centre investments making up over half that value. The company is actively refining its portfolio, including a sales process for its Qscan radiology business, and ongoing investments in infrastructure optimisation.

Longroad Energy is meeting strong US market demand by ramping up its renewables development, while also exploring data centre co-location at its solar farm sites. In New Zealand, EonFibre has completed its first year as a separated business and is positioned to capture future AI-driven data centre growth.

What did Infratil management say?

Infratil Chief Executive Officer Jason Boyes said:

Our global portfolio provides multiple pathways to grow returns across the AI infrastructure value chain. We’re pursuing attractive opportunities adjacent to our core energy and data centre investments, including leveraging our existing platforms across geographically diverse markets, as well as exploring new sectors for future growth.

What’s next for Infratil?

Infratil is focused on scaling its core data centre and renewables businesses, maintaining capacity for future growth with a strong BBB+ balance sheet rating. The company is also searching for new verticals and adjacencies that align with its infrastructure expertise and target returns.

Capital management remains a priority, with further divestments planned to fund growth opportunities. Infratil’s strategy is underpinned by steady contracted revenue streams and a disciplined approach to deploying capital in high-demand sectors like AI, digital infrastructure, and renewables.

Infratil share price snapshot

Over the past 12 months, Infratil shares have declined 2%, matching the S&P/ASX 200 Index (ASX: XJO), which has also fallen 2% over the same period.

View Original Announcement

The post Infratil hikes earnings guidance as data centre growth accelerates 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 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 summary of the company announcement. 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.