Building passive income from ASX shares is something I think a lot of investors aim for.
But one of the most common questions is how much capital you actually need to get there.
Let's break it down using BHP Group Ltd (ASX: BHP) shares as an example.
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Starting with the income goal
A $100 monthly income might not sound like a lot, but it's a great place to start.
Over a year, that works out to $1,200 in dividend income.
That's the key number to keep in mind, because once you know your annual income target, you can start working backwards.
What BHP shares currently offer
BHP is one of the ASX's largest and most established dividend payers.
According to CommSec, consensus estimates show that the miner is expected to pay fully franked dividends of $1.87 per share in FY26 and $1.73 per share in FY27.
Using the current share price of $48.35, that puts its forward dividend yield at roughly 3.6% to 3.9%.
Of course, it's worth remembering that BHP's dividends can fluctuate. As a miner, its payouts are influenced by commodity prices, particularly iron ore and copper.
So while it can deliver strong income, it won't be perfectly consistent every year.
How much do I need to invest?
Now for the key part.
If we aim for $1,200 in annual dividend income and assume a yield of around 3.8%, we can estimate the investment required.
At that yield, you'd need roughly $31,500 invested in BHP shares to generate $1,200 per year in dividends. That equates to roughly 650 shares.
While this gives a useful estimate, there are a couple of important things to keep in mind.
First, dividends are not guaranteed. If commodity prices fall, BHP's earnings and dividends could decline as well.
Second, putting all your money into a single stock carries risk. Even a high-quality company like BHP shouldn't be your only source of income.
A long-term perspective
What I like about BHP for income is that it also offers growth potential.
It has significant exposure to commodities like copper, which is expected to play a major role in global electrification.
It is also investing in future-facing projects like its Jansen potash development in Canada, which could become a major earnings contributor over time.
So while the income may fluctuate, the long-term outlook could support both dividends and capital growth.
Foolish takeaway
To generate $100 per month in income from BHP shares, you'd likely need to invest in the region of $30,000 to $32,000 at current prices and forecasts.
That might sound like a lot, but it certainly could be worth it for investors looking to build a balanced income portfolio.
