There are certain ASX passive income ideas that could deliver a strong start to an Australian investor's dividend goal.
I love how ASX shares can provide a mixture of both passive income and long-term capital growth.
I'm going to talk about two investments that are providing investors with large dividend yields and rising payouts.
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Future Generation Australia Ltd (ASX: FGX)
Future Generation Australia is a listed investment company (LIC) with a very noble cause. LICs invest in other shares, making the decisions (and hopefully returns) for shareholders.
There are no management fees or performance fees involved with this LIC, all of the fund managers work for free. Instead, it donates 1% of its net assets each year to youth-related charities, which is a great philanthropic cause.
Future Generation Australia is invested in more than a dozen funds of ASX share-focused funds such as Wilson Asset Management (WAM), Vinva, Eley Griffiths, Paradice and Firetrail. That's a lot of diversification.
The ASX passive income stock has increased its annual dividend per share each year since 2015, which I'd describe as one of the more impressive dividend growth streaks on the ASX.
The business expects to pay an annual dividend per share of 7.6 cents in FY26, which translates into a grossed-up dividend yield of 8%, including franking credits, at the time of writing.
WAM Microcap Ltd (ASX: WMI)
Another idea I'm positive about is WAM Microcap, which is also an LIC.
It targets ASX small-cap shares, which can be some of the most exciting stocks to own, since they are much earlier in their growth journeys and may be undervalued given how few fund managers and analysts cover the business.
The WAM Microcap portfolio has returned an average of 13.1% per year, before fees, expenses and taxes. That's just over double the return of its small-cap benchmark, so it has been an impressive return.
WAM Microcap's good investment returns allow it to pay a large dividend and slightly increase its payout each year, though that's not guaranteed.
Its annual dividend per share has increased every year since FY18, aside from FY24 when it maintained the dividend.
Its expected annual dividend per share for FY26 is 10.7 cents. That translates into a potential grossed-up dividend yield of 10.8%, including franking credits, at the time of writing.
$200 of passive income per month
Between those two ASX passive income ideas they have an average dividend yield of 9.4%, including franking credits. I'd say that's an excellent yield considering they're both increasing their payouts.
To generate an average of $200 per month, we're talking about $2,400 per year. At an average dividend yield of 9.4%, an investor would currently need to invest around $25,500.
In the interests of diversification, I'd want to add additional ideas if I were striving for even more passive income.
