Like most of us, I would love to secure a passive source of second income. It would add a huge amount of financial security, not to mention providing me with more capital to invest in growing my wealth.
As I have been investing in ASX shares for many years, I already enjoy a second income from my investing portfolio. Alas, it's currently nowhere near an annual $27,374. But I have a plan to get there, hopefully within the next ten years.
My ASX share portfolio is currently more geared towards growth assets, rather than income-producing shares. As such, I'm currently generating an annual yield of just under 2% from my aggregated portfolio.
Using some quick maths, if I were to keep this yield, I would need to control a total portfolio worth over $1.6 million if I wished to generate $27,374 in dividend income. It won't come as a shock to many readers to learn that I'm not quite there yet, I'd wager. And I doubt I will get to those kinds of figures in the next decade (although hope springs eternal).
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Do you really need $1.6 million to get a second income from ASX shares?
However, I'm not despairing. The beautiful thing about investing in shares (as opposed to property) is that we can be flexible with our portfolios, thanks to the share market's inherent liquidity.
As such, I'm happy to pursue my current strategy until I have enough to justify switching some of my investments to prioritise a second income.
If I could get my portfolio up to a 4% or 5% yield, instead of $1.6 million, I would only need just under $700,000 or just over $550,000, to get to that $27,374 in passive income respectively. Still a hard ask, but certainly more achievable over the next ten years than $1.6 million.
So that's my plan for a second income. I'll let you know how it's going in 2034.
