If you're looking for $10,000 of passive income, then ASX shares could certainly help you.
Listed below are a couple of ASX shares that you could buy to generate a nice income without lifting a finger. They are as follows:
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ANZ Group Holdings Ltd (ASX: ANZ)
One positive from recent weakness in the banking sector is that it has made the potential yields on offer from bank shares that much sweeter. ANZ is no exception. Citi, which has a buy rating and $29.25 price target on its shares, is forecasting a $1.66 per share dividend in FY 2023. This is the equivalent of a ~7.4% dividend yield.
Based on this dividend estimate, investors would need to own 6,024 ANZ shares to receive $10,000 of income. This would take an investment of approximately $136,000.
BHP Group Ltd (ASX: BHP)
Goldman Sachs is bullish on this ASX mining giant and has a buy rating and $48.40 price target on its shares. In addition, it is forecasting a fully franked dividend of US$2.11 (A$3.16) per share in FY 2023, which equates to a 7.25% yield at current prices.
This means that if you wanted to generate $10,000 of income from its shares, you would need to pick up 3,164 BHP shares. This would require an investment of $138,000.
What if you don't have this amount to invest?
If you don't have the required amount to generate $10,000 of passive income from these ASX shares, don't worry. Investors can make this a longer-term goal and focus on growing their wealth in the meantime.
As you can see above, investors will require in the region of $140,000 to generate this level of income. So, this will be our target.
Historically, the share market has provided investors with a return of 10% per annum. And while there's no guarantee that this will happen in the future, it certainly is possible and, therefore, will be used in these calculations.
With that in mind, if you were to invest $2,200 into the share market each year and earn the market return, your portfolio would grow to be worth $140,000 after 20 years.
And if you want to get there sooner, you could increase your investment.
For example, $5,000 a year would get you there in just over 13 years, $10,000 a year would take eight and a half years, and $20,000 a year would see you hit your target in a touch over five years.
