When a share price goes lower, it boosts the dividend yield on offer. Therefore, when the opportunity is there, I think it's worth jumping on. For example, if a business with a 7% dividend yield sees a 10% share price fall, the yield on offer becomes 7.7%.

The two businesses below have some of the most appealing dividend yields, partly because I expect ongoing payout growth.

Universal Store Holdings Ltd (ASX: UNI)

I think Universal Store is one of the most underrated businesses on the ASX for dividends because of both its yield and its impressive growth.

In my view, it's important that a good ASX dividend share regularly increases its payout to help offset (or outpace) inflation and ensure our bank account grows in real terms.

Universal Store is best-known for two businesses within its stable – Universal Store and Perfect Stranger. The company aims to sell premium apparel to fashion-focused younger shoppers in Australia.

It is delivering excellent levels of growth – in the first half of FY26, group sales increased 14.2% to $209.6 million, with Universal Store sales rising 11.9% to $174.8 million and Perfect Stranger sales soaring 41.5% to $17.8 million.

The sales growth supported a 22% rise in underlying net profit after tax (NPAT) to $28.3 million. The business' offering is clearly resonating with customers, particularly the Perfect Stranger brand. Its interim dividend was hiked by 18.1% per share.

The ASX dividend share is expecting to open more Universal Store and Perfect Stranger stores in the second half of FY26, as well as in the coming years. The increased scale could see ongoing sales strength and improving profit margins.

According to the forecast on Commsec, it's trading with a projected FY27 grossed-up dividend yield of 8.9%, including franking credits, at the time of writing.

Future Generation Australia Ltd (ASX: FGX)

The other ASX dividend share I want to tell you about is a listed investment company (LIC) that doesn't charge any management fees or performance fees. Instead, it donates 1% of its net assets each year to youth charities.

Its actual investments are a variety of funds from different fund managers who are all happy to work pro bono.

This investment style means investors have exposure to hundreds of underlying businesses, which are typically smaller (and have more growth potential) than what the S&P/ASX 200 Index (ASX: XJO) is weighted to.

As a LIC, Future Generation Australia is able to steadily grow its annual dividend per share from investment returns it has made in the current year or previous years.

In the most recent result, Future Generation Australia decided to increase its annual dividend per share by around 3% to 7.2 cents. That translates into a grossed-up dividend yield of approximately 7.5%, including franking credits.

I'm projecting a 7.75% grossed-up dividend yield (at the time of writing), including franking credits, for FY27.

The post Get paid huge amounts of cash to own these ASX dividend shares! appeared first on The Motley Fool Australia.

The business operates as a listed investment company (LIC), which means it invests in other shares for the benefit of shareholders.

A key difference with this LIC compared to most other LICs is that the ASX dividend share's fund managers work for free so that the LIC can donate 1% of net assets each year to youth-related charities.

While the philanthropy is great, it doesn't necessarily translate into a compelling investment choice. Let's look at the advantages for the retirees.

Appealing dividends

There are few businesses on the ASX that have increased their payout every year for the past decade. Future Generation Australia is one of them. It has increased its annual dividend each year going back to 2015.

Dividend hikes are not guaranteed, of course, but it's good to see that the business has tried to regularly increase payments to shareholders.

Pleasingly, the ASX dividend share increased its payout by 2.8% to 7.2 cents per share in 2025. That translates into a grossed-up dividend yield of 7.5%, including franking credits.

Diversification

Another pleasing element to consider is that the business has excellent diversification characteristics for retirees.

With how Future Generation Australia is invested in the funds of 16 fund managers, it can provide investors with an excellent level of exposure across a large number of businesses.

At the end of February 2026, it reported that it had indirect exposure to more than 450 businesses across different sectors.

These businesses are of various sizes and the ASX dividend share also has exposure to a cash allocation, providing protection during market declines, as we've seen over the past several weeks.

Long-term growth

Future Generation Australia pays for its dividends out of the investment returns that it has generated.

Over the ten years to February 2026, its portfolio delivered an average return per year of 10.1%, which is large enough to deliver a large and growing dividend, donate 1% per year and deliver growth of the net tangible assets (NTA). The NTA is a key driver of the Future Generation Australia share price.

The business has traded at a discount to its NTA before tax, so it's a pleasing investment for retirees to buy at a discount to its actual underlying value.

If the long-term return of the portfolio can remain above 10% per year, then it could deliver capital growth and dividend growth in the longer-term.

The post Why this ASX dividend share is a retiree's dream appeared first on The Motley Fool Australia.

Each state has a different school holiday period, with NSW, Queensland, and Victoria among the states commencing holidays today.

Tasmania has the latest school holiday schedule this Easter season. The school break in our smallest state runs from 18 April to 3 May.

So, here's a list of all the ASX shares due to go ex-dividend over the coming weeks through to 3 May.

In order to receive a dividend, you must own the ASX share prior to its ex-dividend date.

Ex-dividend dates give ASX investors two opportunities.

Either buy before the date to receive the dividend, or wait until ex-dividend day, when the share price will likely drop, to buy then.

ASX shares with ex-dividend dates this month

The post 21 ASX shares going ex-dividend over the school holidays appeared first on The Motley Fool Australia.

Businesses with high dividend yields aren't necessarily the best choice because those payouts could be at risk of reduction.

The following businesses have a track record of giving shareholders regular dividend increases.

Future Generation Australia Ltd (ASX: FGX)

This is a listed investment company (LIC) that enables investors to gain exposure to a portfolio of fund managers' funds who work for free and generally target smaller companies with plenty of growth potential.

These fund managers work for free to enable Future Generation Australia to donate 1% of its net assets each year to youth charities.

Some of the fund managers involved include Paradice, L1 Group Ltd (ASX: L1G), Vinva, Firetrail, Wilson Asset Management and Eley Griffiths.

Future Generation Australia has been using some of the investment profits it has made to pay out a growing dividend. It has increased its payout every year for the last decade – not many ASX dividend shares can point to a record like that.

The latest annual dividend it announced was 7.2 cents per share, representing a grossed-up dividend yield of 7.9% at the time of writing, including franking credits.

Impressively, the ASX dividend share has donated $49 million since its inception, which is an excellent initiative.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is one of the leaders in Australia in the retail of shaving products. It has 126 stores across Australia and New Zealand.

Its core product range comprises electric shavers, clippers, trimmers and wet shave items It also retails products such as oral care, hair care, massage, air treatment and beauty categories.

Pleasingly, the business has increased annual dividend per share every year since 2017 aside from FY24 when it maintained the payout.

The last two dividends paid by the business come to 10.3 cents per share. At the time of writing, Shaver Shop offers a grossed-up dividend yield of 10.9%, including franking credits.

Shaver Shop is pursuing a few different growth avenues including opening more stores across Australia and New Zealand, it's growing its own brand (Transform-U), and it's working with shaving brands to offer exclusive products.

I think this ASX dividend share is one of the best options for a dividend yield of more than 10% with its track record.

The post 2 ASX dividend shares with yields above 7% appeared first on The Motley Fool Australia.

There are two big reasons this month could be a great time to start investing in passive income names.

Firstly, share prices have dropped amid the large spike in the oil price. Why is that helpful for building a second income? When the share price of a dividend-paying business falls, the dividend yield is boosted. For example, a 5% dividend yield becomes a 5.5% dividend yield if the share price drops 10%. Getting a bigger income return is useful.

Secondly, it appears inflation is returning, so it could be a good idea to invest in passive-income assets that can deliver a growing second income to offset inflation.

Future Generation Australia Ltd (ASX: FGX)

Future Generation is a listed investment company (LIC). A LIC structure can be advantageous over an exchange-traded fund (ETF) because the board of directors can decide on the level of dividend payments (and deliver consistency), whereas ETFs largely pass through the income they receive from their portfolios, so ETF payouts can be volatile.

Impressively, Future Generation Australia has increased its annual payout every year for the last 10 years in a row, an excellent record of consistency.

Another positive is that the LIC doesn't charge any management fees or performance fees. Instead, it donates 1% of its net assets to youth-focused charities.

Future Generation is invested in a portfolio of funds from fund managers who work for free. This means Future Generation Australia has a lot of underlying diversification. Over the last seven years to February 2026, its portfolio has returned an average of 10.7%.

In terms of the dividend yield, its 2025 payout translates into a grossed-up dividend yield of 7.7%, including franking credits. That's a great starting yield for investors wanting a second income, in my view.

APA Group (ASX: APA)

APA is one of the largest energy infrastructure businesses in Australia. Its main portion of its asset base is a national gas pipeline network – it transports half of the country's gas usage.

Most of the business' revenue is linked to inflation, so any increase in inflation can accelerate its revenue growth, though higher interest costs will be an offset to that.

The ASX share also has other assets, like gas storage, gas processing, gas-powered electricity generation, wind farms, solar farms, and electricity transmission. It's building a diversified portfolio.

APA has increased its annual distribution every year for the past two decades in a row. It has been one of the most reliable dividend growth payers on the ASX.

It has partly achieved this through the steady expansion of its asset base, investing in new assets (such as pipelines) and acquisitions (such as Basslink).

I'm expecting the business to continue growing its distribution over the rest of this decade, which makes it an attractive second income. In FY26, it's expected to grow its distribution to 58 cents per security, which would be a distribution yield of 6.3%.

I like APA's defensive earnings – energy remains a very important aspect of the Australian economy, particularly if it continues expanding its pipeline network and capacity.

The post Want to build a second income? I'd buy these ASX shares today appeared first on The Motley Fool Australia.

But, not every business is destined to provide investors with resilient payouts over the years. Certain businesses do seem to have a bigger commitment to rising payouts than others.

I'd focus on those names with increasing payouts if receiving passive income is a key focus. Of course, dividends are not guaranteed, but businesses do have a significant level of control over the size of the payout they send to investors each year.

APA Group (ASX: APA)

APA has been, and continues to be, one of the most stable ASX dividend shares in terms of consistent distribution growth.

The energy infrastructure business has increased its annual distribution each year over the past two decades. Only one other business has a longer-term record than that.

There are two factors that have driven the payout higher over the last 20 years.

Firstly, it has regularly added to its energy portfolio across Australia over the years, with new gas pipelines, electricity transmission, wind farms, solar farms and batteries. It has new gas pipelines and a new gas power plant in the works, which should provide a good boost to cash flow. It's the growing cash flow that funds higher distribution payouts from APA.

A second earnings tailwind is that a vast majority of revenue is linked to inflation. Any upswing in inflation this year – which seems likely – could provide a longer-term boost to revenue and cash flow.

It's expecting to increase its FY26 annual distribution by 1 cent per security to 58 cents, translating into a forward distribution yield of 6.3%.

Future Generation Australia Ltd (ASX: FGX)

Future Generation Australia has a strong track record of dividend growth. The listed investment company (LIC) has increased its annual payout every year for the last decade. Not many ASX dividend shares have achieved that!

It's not a typical LIC because there are no management fees or performance fees involved. It's invested in a range of ASX share-focused funds, who all work for free. Instead of fees, Future Generation Australia donates 1% of its net fees to youth-focused charities.

Future Generation Australia provides underlying exposure to hundreds of ASX shares, resulting in excellent diversification and (typically) less volatility than the wider ASX share market. It recently announced its FY25 result, which included an annual dividend per share of 7.2 cents. At the time of writing, it has a grossed-up dividend yield of 7.5%, including franking credits.

The post 2 ASX dividend shares raising dividends like clockwork appeared first on The Motley Fool Australia.

High dividend yields can be a trap, particularly if they mean the dividend will be cut sooner rather than later.

However, some dividend yields may not be illusions but be coming from incredibly undervalued names.

Keep in mind, a dividend yield increases when a share price decreases. For example, if a business has a 7% dividend yield and then the share price drops 10%, the dividend yield reaches 7.7%.

Share prices do sometimes go through large declines when there is some sort of widespread issue, such as the GFC, COVID-19 or the strong inflation period. Dividend yield-focused investors can see higher yields at times like that. But, I wouldn't call the current period as once-in-a-decade. Rather, the market seems to regularly go through sizeable declines.

I think income investors should always be on the lookout for ASX 200 income shares with large yields.

The business doesn't necessarily need to have a dividend yield of 10% (or more) for it to be a good ASX dividend share. For example, I've highlighted names like Future Generation Australia Ltd (ASX: FGX) and Hearts and Minds Investments Ltd (ASX: HM1) as compelling ideas for dividend income (though they aren't ASX 200 income shares).

I'll briefly point out three names that are expected to have extremely high dividend yields in FY26. But, there's no guarantee those yields will be that strong forever.

IPH Ltd (ASX: IPH)

IPH is a legal business that provides clients with intellectual property (IP) services such as patent filing, trademarks and enforcement. It has a position in a number of markets including Australia, New Zealand, Asia and North America. It claims to be the largest player in the Asia Pacific region.

The FY26 half-year result showed good financial progress by the business. It grew revenue by 6.5% to $363.9 million, increased operating profit (EBITDA) by 6.6% to $107.1 million and the statutory net profit (NPAT) rose by 10.5% to $41.2 million. The business decided to hike its interim dividend by 11.8% to 19 cents.

The forecast on Commsec suggests the ASX 200 income share's annual dividend could rise to 37.6 cents per share in FY26. That translates into a dividend yield of 11% excluding any franking credits, at the time of writing.

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a funds management business that provides portfolios across Australian shares, international shares and infrastructure equities. It also holds stakes in a few other businesses including investment bank Barrenjoey and fund manager Vinva.

The business recently announced it's going to merge with Barrenjoey, giving Magellan much more earnings growth potential in the coming years, in my opinion.

According to the forecast on Commsec, it's predicted to pay a grossed-up dividend yield of 11.1% in FY26, including franking credits at the time of writing.  

Centuria Office REIT (ASX: COF)

This is a real estate investment trust (REIT) that owns office properties across metropolitan Australian locations.

The ASX 200 income share's weighted average lease expiry (WALE) is around four years, which provides some rental income and visibility, but there are recent developing headwinds of higher interest rates, rising inflation and questions of how AI developments could impact office demand.

Even so, the land that the offices sit on is valuable, and the REIT is working out leasing some floors to data centres, protecting its underlying value.

The business has guided that it's going to pay a distribution per unit of 10.1 cents in FY26, translating into a distribution yield of 10.1%, at the time of writing.

The post A once-in-a-decade chance to get a 10%+ yield from ASX 200 income shares? appeared first on The Motley Fool Australia.

The best dividend businesses can provide investors with both a good dividend yield and capital growth over time.

I consider the three ASX dividend shares below as three of the best options – I thought that five years ago, I think that today, and I'm confident they will be great dividend income picks in five years.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

I view Soul Patts as one of the very best passive income businesses because of the incredible dividend growth streak it has provided.

Soul Patts has increased its regular annual payout every year since 1998. No other ASX share has a growth streak that started in the previous century.

On top of that, the investment house has paid an annual dividend every year since it listed more than 120 years ago, including through world wars, global pandemics and economic recessions.

This S&P/ASX 200 Index (ASX: XJO) share doesn't rely on one core activity for its earnings – it has a diversified portfolio across a range of ASX shares, privately-owned businesses, property and credit. It has maximum investment flexibility to find the best opportunities with its money and create a portfolio that generates cash flow in all economic conditions.

I'm expecting the ASX dividend share's FY26 payout to be a grossed-up dividend yield of around 4%, including franking credits, at the time of writing.

They are the key reasons why I've made this business my largest ASX dividend shareholding.  

Future Generation Australia Ltd (ASX: FGX)

I've held this listed investment company (LIC) in my portfolio for several years and I expect it be a holding for many years to come.

There are multiple reasons to like the LIC. For starters, there are no management fees involved – instead, it donates 1% of its net assets each year to youth charities. It's invested in a variety of funds from different fund managers who all work for free to enable those charitable donations.

The fact it's invested across more than ten funds means it provides investors with significant diversification across hundreds of underlying holdings.

In terms of being a top ASX dividend share, it has grown its annual payout every year for the last decade and currently offers investors a grossed-up dividend yield of 7.7%, including franking credits, at the time of writing.

MFF Capital Investments Ltd (ASX: MFF)

MFF built a reputation as one of the leading LICs on the ASX by investing in a portfolio of high-quality shares, namely some of the leading global US tech shares and payment giants.

The business recently expanded into funds management by making an acquisition, giving it another growth avenue and providing more investment team capabilities to MFF.

One of its main goals is to increase its dividend each year. It has hiked regular payout each year over the last several years at an impressive double-digit rate thanks to the strong performance of its portfolio.

I'm predicting MFF will increase its annual payout to 21 cents per share in FY26, translating into a forward grossed-up dividend yield of 6.2%, including franking credits, at the time of writing.

The post 3 of the best ASX dividend shares to buy for income appeared first on The Motley Fool Australia.

I love how we can build a portfolio piece by piece and create a river of dividends. The investments I'm going highlight offer investors a good dividend yield and I'm confident they can grow their payouts over time.

Let's dive in with what I'd happily buy with $3,000.

Bailador Technology Investments Ltd (ASX: BTI)

I think the last 20 years have shown that technology is one of the best, if not the best, places to invest.

Software businesses are able to deliver great gross profit margins, strong bottom lines and they usually don't have any physical limitations of growth compared to others needing to increase production, open a new store or new warehouse to grow further.

Bailador is a company that invests in private technology businesses whilst they're still in a rapid growth phase. Its current portfolio includes businesses involved in digital healthcare, hotel management, financial advice and investment management, tours and activities, property investment, volunteer management, fitness and wellness, and so on.

The portfolio is growing at a rapid speed – Bailador's portfolio company revenue growth was 47% in FY25, which bodes well for increasing the underlying value of those businesses over time.

The ASX dividend share aims to pay investors a dividend yield of 4% relative to the pre-tax net tangible assets (NTA). But, due to the fact the Bailador share price is at a 36% discount (at the time of writing) to the NTA, it has a dividend yield of 6.3%, or 9% including franking credits.

Future Generation Australia Ltd (ASX: FGX)

This business is a listed investment company (LIC) that invests a portfolio of ASX share-focused funds from various fund managers who work for free so that Future Generation Australia can donate 1% of net assets to youth charities each year.

There are no management fees or performance fees. With the investment/accounting profits the ASX dividend share makes, it's paying a growing dividend that has grown every year for the past decade. Not many ASX businesses can claim to have done that.

This investment can provide Aussies with diversification thanks to the funds giving exposure to hundreds of underlying businesses.

Its latest announced dividends come to a grossed-up dividend yield of 7.7%.

WCM Quality Global Growth Fund (ASX: WCMQ)

This is an exchange-traded fund (ETF) targets a 5% dividend yield, balancing passive income and capital growth.

WCM is looking for global stocks it thinks have expanding competitive advantages (economic moats) and business cultures that help expand the competitive advantage.

With a portfolio of US and non-US shares, the fund is able to provide investors with pleasing exposure to a variety of opportunities around the world.

The strategy is clearly working because the fund has delivered average net returns of 15.9% per year since inception in August 2018. Past performance is not a guarantee of future returns, but I think it can continue to perform well. A rising net asset value (NAV) of the fund helps fund larger distributions.

The post 3 wonderful ASX dividend shares I'd buy with $3,000 right now appeared first on The Motley Fool Australia.

One of the tricky things is that a beginner portfolio can be quite unbalanced. If one's first investment was a business like Telstra Group Ltd (ASX: TLS) or Wesfarmers Ltd (ASX: WES), then 100% of the portfolio is invested in just one name.

It would be good to invest in an option that provides everything a beginner investor may want. I think the philanthropic investment business Future Generation Australia Ltd (ASX: FGX) could meet a beginner's criteria.

Diversification

Future Generation Australia is a listed investment company (LIC) which is different to most other LICs on the ASX. It is invested in the funds of a number of Australia's leading fund managers.

However, these fund managers don't charge Future Generation Australia with management fees of 1% (or more) as a typical fund might. Instead, they work for free so that the LIC can donate 1% of the value of its net assets each year to youth charities.

By having exposure to numerous funds, investors can benefit from owning a lot of underlying stocks, just by owning this ASX share. At the end of November 2025, its portfolio contained more than 400 underlying securities.

Some of the fund managers it's invested in include Paradice, Bennelong, L1 Group Ltd (ASX: L1G), Wilson Asset Management, Cooper Investors, Vinva, Eley Griffiths, Firetrail and QVG Capital.

These fund managers provide better diversification than the overall ASX share market, in my view, because their portfolios are much less focused on the ASX banking sector. Instead, more is allocated to industrials, discretionary retailers, communication services, IT and cash.

Returns

Diversification is helpful for lowering risks and overall portfolio volatility. But, ultimately, we want to see positive returns. Market-beating returns would be preferable.

Future Generation Australia's portfolio has been very satisfactory.

At the end of November, the ASX share's portfolio return was 11.8% per annum over three years, 10% per annum over five years and 10.9% over seven years. These figures compare favourably to the S&P/ASX 300 Index (ASX: XKO).

The funds are focused on smaller businesses than the ASX 300 is focused on, giving investors the chance to buy in faster-growing companies.

Philanthropy

As a shareholder myself, I'm very pleased to know that Future Generation Australia is donating millions of dollars each year to a number of youth charities.

Some of the charities that the ASX share supports are Australian Children's Music Foundation, Brave, Yiliyapinya, The Mirabel Foundation, Raise, Giant Steps, Karinyahouse, KidsXpress, Yawarda and Lighthouse Foundation.

According to Future Generation Australia, the donations to date have totalled $49 million.

Dividends

Some beginner investors may be looking for passive income from their investments. Plenty of exchange-traded funds (ETFs) don't have a good dividend yield.

Future Generation Australia aims to deliver investors a mixture of capital growth and dividends over time. Pleasingly, the business has increased its dividend every year over the past decade.

The ASX share's FY25 dividend yield translates into a grossed-up dividend yield of 7.8%, including franking credits, at the time of writing.

For investors who don't want cash payments, they can utilise the LIC's dividend re-investment plan (DRP) and see the value of the holding increase over time.

Overall, this ASX share offers everything a beginner investor could want.

The post Is this the perfect place to start investing in ASX shares with $500? appeared first on The Motley Fool Australia.

There are only so many hours in a week, so wage earnings are limited by how much we work. Creating a portfolio of ASX shares that are making passive income would significantly improve our financial stability.

What amount of a second income does someone need?

I don't know about you, but when I'm in my 70s, I don't want to be in a position where I have to work. I have a goal of generating enough annual dividends which can cover my core life expenditure. At that point, I'd be financially independent!

That's a large, long-term goal which is a long time away.

When I first started investing in ASX dividend shares, I thought of the second income it produced as just budget-boosting dollars that unlocked additional spending in discretionary categories. Passive income returns don't necessarily need to be locked away for decades like superannuation.

A $1,000 investment could create enough annual income to pay for a couple of takeaways or a restaurant meal with friends.

Building an ASX dividend share portfolio of $10,000 could mean making enough annual passive income to pay for an overnight stay (and associated spending) somewhere.

Or, the money could just be used to give more breathing room in someone's budget that year.

If we regularly invest spare money into ASX shares, we could quickly find that plenty of money is hitting our bank accounts each year.

The power of a dividend yield

I really like ASX dividend shares for creating a second income because you don't need to take on debt to do it (unlike buying a property). It can be done with small, regular investments.

Most importantly, businesses can pay passive income without necessarily hurting the ability to increase the dividend next year. That's why I prefer ASX dividend shares to term deposits – there is growth potential for the income and capital value.

If I were investing with income in mind, I'd only want to buy stocks I have good confidence would deliver a similar (or larger) payout each year. I'll run through a few examples of compelling names for a second income.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is a diversified investment house that has increased its annual dividend every year for the past 27 years in a row. At the time of writing, it has a grossed-up dividend yield of 3.8%, including franking credits.

Wesfarmers Ltd (ASX: WES) is a major blue-chip that owns Bunnings, Kmart, Officeworks and Priceline. It has a focus on shareholder returns, with a goal of regularly growing the dividend. At the time of writing, it has a grossed-up dividend yield of 3.6%, including franking credits.

Future Generation Australia Ltd (ASX: FGX) is a listed investment company (LIC) that doesn't have any management fees, instead donating 1% of net assets each year to youth charities. The fund-of-funds portfolio strategy gives significant diversification. It has a grossed-up dividend yield of 7.7%, including franking credits, at the time of writing. The ASX dividend share has increased its annual payout each year over the past decade.

Telstra Group Ltd (ASX: TLS) is Australia's leading telecommunications business with a market-leading network that attracts more customers each year. Its growing mobile earnings are helping fund a growing dividend and it has a grossed-up dividend yield of 5.6%, including franking credits, at the time of writing.

Of course, these aren't the only ASX shares worth investing in for a second income.

The post Don't want to rely on your wage? Build a second income with these ASX shares appeared first on The Motley Fool Australia.

We all only have so much time to work for earnings. It'd be beneficial to have a portfolio of shares paying a growing source of passive income to our bank accounts that we don't have to actively work for ourselves.

How much of a second income could a $20,000 investment pay? That entirely depends on the dividend yield.

For example, if someone's portfolio had a 5% dividend yield, then $20,000 would generate $1,000 of annual income.

That's just the first year, though.

If the payout grew at a compound annual growth rate (CAGR) of 7.5% for the foreseeable future, it would grow into $1,436 of annual income after five years and $2,061 after ten years.

That sounds good, right?

The next question is what to invest in.

Many of the most popular ASX-listed exchange-traded funds (ETFs) aren't known for having good dividend yields. I'll run through some compelling options.

Portfolio investments

When we think about investing in a particular company, like BHP Group Ltd (ASX: BHP), that money is allocated to just one business.

Wouldn't it be great if we could put our money into an investment and it's already diversified instantly?

There are some investments that can provide a pleasing mixture of both a good dividend yield and capital growth. I'm thinking of investment businesses like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), MFF Capital Investments Ltd (ASX: MFF), and Future Generation Australia Ltd (ASX: FGX), which have a good long-term record of payout growth. I think these are great options for a second income.

I'll also point out a couple of impressive actively-managed ETFs that target a dividend yield for investors and have strong long-term portfolio performance, such as WCM Quality Global Growth Fund (ASX: WCMQ) and Montgomery Global Equities Fund (ASX: MOGL).

Companies

There are a number of companies on the ASX that derive their earnings from operations.

I'd only focus on businesses that have an attractive long-term future and that have a history of growing their payouts and offer a good dividend yield today.

Some of the most appealing ASX dividend shares, in my opinion, are Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), Medibank Private Ltd (ASX: MPL), Pinnacle Investment Management Group Ltd (ASX: PNI), Shaver Shop Group Ltd (ASX: SSG), and APA Group (ASX: APA).

Real estate investment trusts

The final area of investments that could unlock a pleasing second income is real estate investment trusts (REITs) – these are businesses that own significant commercial real estate.

There is a wide variety of REITs that Aussies can buy, including industrial, shopping centres, farms, self-storage, office, social, and healthcare.

Investors can benefit from the rental profits as well as the long-term appreciation of land prices. Some of my favourite REITs for income and capital growth are Centuria Industrial REIT (ASX: CIP), Charter Hall Long WALE REIT (ASX: CLW), Rural Funds Group (ASX: RFF), and Abacus Storage King (ASX: ASK).

The post $20,000 in excess savings? Here's how to try and turn that into a second income in 2026 appeared first on The Motley Fool Australia.

BHP and Commonwealth Bank of Australia (ASX: CBA) are the two largest businesses on the ASX, but there are quite a few names that have bigger attraction.

The name I want to highlight today is Future Generation Australia Ltd (ASX: FGX), one of the most appealing listed investment companies (LICs) Aussies can buy for income.

Why the ASX dividend giant's setup is so appealing

A LIC has a company structure, just like any other company. But, instead of selling products or services, the LIC is trying to generate profit for shareholders by generating investment returns with a portfolio.

The LIC structure allows the board of directors to declare the size of dividends they want to, assuming the business has an accounting profit reserve that's large enough for the desired payout. LICs can provide shareholders with steadily rising dividends thanks to this dynamic.

Future Generation Australia is no ordinary LIC, though. Usually, the portfolio of a LIC is managed by a fund manager that charges management fees.

The ASX dividend giant I'm highlighting today doesn't charge any management fees. Instead, it donates 1% of the value of its net assets each year to charities focused on helping youths and the fund managers work for free to enable this initiative. It's a fantastic LIC, in my view.

Diversification

Investors usually like to see that their wealth is diversified – it's good not to have all one's eggs in one basket.

Future Generation Australia's portfolio has significant diversification. It's not managed by one fund management outfit. The LIC is invested across the funds of a number of fund managers, who all work for free.

It's invested in 16 funds, that each have their own portfolio, giving shareholders significant diversification. Some of the fund managers include Paradice, Bennelong, L1 Group Ltd (ASX: L1G), Cooper Investors, QVG, Vinva, Eley Griffiths and Lanyon.

According to the ASX dividend giant, there are more than 400 underlying shares across different sectors. Pleasingly, it has a much smaller weighting to ASX financial shares, giving investors varied exposure to the ASX share market than the S&P/ASX 300 Index (ASX: XKO).

Dividend potential

On the passive income side of things, I think Future Generation Australia is a very appealing investment.

It has increased its payout every year between 2015 to 2025 – a decade of dividend increases is the type of reliability I'd want to see.

The LIC's FY25 annual payout has been guided to be 7.2 cents per share. That translates into a grossed-up dividend yield of 7.9%, including franking credits, at the time of writing. Broker UBS estimates that BHP, on the other hand, could pay a grossed-up dividend yield of 5.3% in FY26 to owners of BHP shares.

Future Generation looks to me like the clear winner for passive income.

The post A dividend giant I'd buy over BHP shares right now! appeared first on The Motley Fool Australia.

If I'm investing in a business because of passive income considerations, then I want to see that the payments are likely to continue flowing even during difficult economic circumstances.

If a company is growing its payout, then it's obviously not reducing it. Plus, the growth of the dividend payments means the business is delivering us greater cash flow into the bank account.

Dividend growth is not guaranteed, which is why it's so special that the below ASX dividend shares have delivered investors a growing stream of payments for a number of years.

APA Group (ASX: APA)

APA is the business with the second-longest payout growth streak on the ASX. Impressively, it has increased its payout every year for the last 20 years.

This business owns a diversified portfolio of energy assets across Australia. Its key asset group is gas pipelines across Australia. It also owns gas processing facilities, gas storage, gas-powered energy generation, electricity transmission assets, solar farms and wind farms.

The ASX dividend share pays for its resilient distribution from the cash flow its portfolio generates. The cash flow is growing from a mixture of an expanding energy portfolio and inflation-linked revenue increases.

In FY26, it has guided it will increase its payout to 58 cents per security, which translates into a forward distribution yield of 6.2%, at the time of writing.

Future Generation Australia Ltd (ASX: FGX)

Future Generation is a listed investment company (LIC) that has increased its dividend every year since 2025 – it has delivered a decade of increases.

It's invested in 16 actively-managed funds, with at least 400 underlying securities across different sectors. This gives the ASX dividend share excellent diversification attributes.

Pleasingly, the LIC doesn't charge any management fees. Instead, it donates 1% of its net assets each year to charities focused on helping Australian youths. There are no performance fees either.

At the end of October 2025, its portfolio had delivered an average return per year of 9.9%, outperforming the average return of 8.7% per year for the ASX share market benchmark.

Its FY25 dividend is 7.2 cents per share, translating into a grossed-up dividend yield of 7.9%, including franking credits, at the time of writing.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

The leader of dividend growth on the ASX is Soul Patts. This investment conglomerate has hiked its annual dividend per share every year since 1998. It has also paid a dividend every year since it listed over 120 years ago, including through the world wars, pandemics and economic crashes.

Its diversified portfolio of assets means the business can call on its (investment income) cash flow to come from a variety of industries.

These largely uncorrelated investments give Soul Patts defensive earnings and the ability to continue growing its dividend even if the economy isn't performing that strongly.

Soul Patts regularly makes new investments for its portfolio, adding further diversification and long-term growth potential.

The FY25 dividend payout translates into a grossed-up dividend yield of 4%, including franking credits, at the time of writing.

The post 3 ASX dividend shares raising dividends like clockwork appeared first on The Motley Fool Australia.

I wouldn't call a business an ASX dividend share just because it pays any sort of dividend. I believe it needs to have a minimum level of a dividend yield. My thought on the base level required can change depending on where the RBA cash rate is sitting. The five investments I'll highlight all have a pleasing dividend yield.

I'd also like to see reliability in terms of those payments. I'd like to be confident that payments will continue flowing even if the economy runs into trouble.

Finally, I like to see regular dividend growth to help grow cash flow and protect against the negatives of inflation.

I believe all five of the below businesses match what I'm looking for, which is why I own all five of them for passive income (and long-term capital growth).

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Patts has the best record for dividend growth – it has grown its payout every year since 1998. At the time of writing, the ASX dividend share has a grossed-up dividend yield of 3.9%, including franking credits.

It's an investment conglomerate which is steadily building its portfolio of assets and businesses. Its biggest investments are in areas like telecommunications, resources, industrial properties, building products, swimming schools and agriculture.

MFF Capital Investments Ltd (ASX: MFF)

MFF's main activity is its impressive investment portfolio focused on international shares, with several of the strongest global blue chips. I'm optimistic the portfolio (and future investment changes) can deliver pleasing long-term returns.

The company has grown its annual ordinary payout each year since 2018 and it has a large profit reserve to enable further dividend payments in the coming years.

Its guided FY26 dividends equate to a grossed-up dividend yield of at least 6.1%, including franking credits.

Future Generation Australia Ltd (ASX: FGX)

This is a listed investment company (LIC) which invests in an array of funds focused on ASX shares. But, those fund managers work for free so that Future Generation can donate 1% of its net assets each year to youth-focused charities. I like the initiative and the diversification on offer.

The ASX dividend share has grown its annual dividend each year since it started paying one in 2015. It has grossed-up dividend yield of 7.4%, including franking credits, at the time of writing.

Rivco Australia Ltd (ASX: D2O)

Rivco Australia, recently renamed from Duxton Water, owns a portfolio of water entitlements which is available for irrigators on short-term or long-term leases.

The business can benefit from both the lease income and the growth in the value of water entitlements over the long-term.

The ASX dividend share has increased its half-yearly dividend every year since 2017. It has a grossed-up dividend yield of 6.9%, including franking credits, at the time of writing.

I like the exposure that Rivco provides to the agricultural sector but with less volatility.

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that owns a portfolio of arms across Australia, including cattle, almonds, macadamias and vineyards.

Its rental income is benefiting from regular rental hikes that are either linked to inflation or grow with fixed annual increases.

It grew its distribution every year between 2014 and 2022, then maintained the payout since. I'm expecting distribution growth in the medium-term following RBA rate decreases.

It's trading at a large discount to its underlying net asset value (NAV) and has a distribution yield of 6%.

The post The top 5 ASX dividend shares I think belong in everyone's portfolio appeared first on The Motley Fool Australia.

For most people, their job is the primary source of income. Earning $50,000 from work may not sound like too much, but it's equivalent to having a $1 million portfolio with a 5% yield.

However, work earnings are limited to what we can earn with our time.

Dividend payments can accumulate and grow over time. Plus, we don't need to work for those payments; that's why it's called passive income. You can think of passive income as a second worker making money for our bank account.

But what sort of ASX dividend shares are the right ones to go for?

Regular pay rises

There are some businesses that have a high dividend yield, such as Shaver Shop Group Ltd (ASX: SSG). But that may not be the most effective dividend pick for working Australians.

Dividends are taxed alongside work earnings on tax returns. Receiving large dividends could mean losing a sizeable chunk of the return each year to the tax office. Paying taxes is not necessarily a bad thing, but it does reduce the net return.

For my own portfolio, I prefer investing in Australian stocks that generally provide regular annual dividend growth.

I focus on names I believe will continue growing their payments in the years to come. Considering my passive dividend income as a worker generating money for me, I want to choose names that I believe have a high chance of delivering regular pay increases.

Dividend growth is helpful in increasing our cash flow to supplement job earnings, it can provide inflation protection, and it's a good sign that the business is growing its profits and its underlying value over time.

In other words, ASX dividend shares that are hiking the dividend are likely to deliver solid total returns, not just pleasing dividend yields.

Which ASX dividend shares are good options?

I prefer to invest in businesses that have a proven track record of dividend payments and have demonstrated a commitment to increasing those payouts for investors.

There are a few in my portfolio (and a couple that aren't) that I'll highlight as ideas, such as:

• Investment conglomerate Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)
• Energy infrastructure giant APA Group (ASX: APA)
• Water entitlement owner Duxton Water Ltd (ASX: D2O)
• Telco Telstra Group Ltd (ASX: TLS)
• Bunnings and Kmart owner Wesfarmers Ltd (ASX: WES)
• Listed investment companies (LICs) MFF Capital Investments Ltd (ASX: MFF), Future Generation Australia Ltd (ASX: FGX), L1 Long Short Fund Ltd (ASX: LSF) and Hearts and Minds Investments Ltd (ASX: HM1)

I believe a portfolio comprising the above names, along with a few others, could yield a pleasing mix of diversification and dividends. How great would it be to be able to receive $10,000 (or $100,000) of annual dividend income from Australian stocks to boost our finances?

Investing $1,000 today in an ASX dividend share could unlock $50 of annual income. If that dividend grew by 10% per year, it'd become $55 after year one, $60.50 after year two and so on. Compounding is a very powerful tool, particularly when we regularly invest in our portfolios.

The post Grow your dividends alongside your job earnings with these Australian stocks appeared first on The Motley Fool Australia.

One of the most important things to know as a beginner is that diversification is a very powerful tool. It means not putting all of your investing eggs in one basket. This can help reduce the risks by spreading the investments across different industries, but good diversification doesn't necessarily reduce the returns on offer.

I'm going to talk about three quite different Australian stocks that could work together in a portfolio.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is one of my favourite businesses because of the diversification that it has in its own portfolio of different businesses. Some of the businesses include Bunnings, Kmart, Officeworks, Target, Priceline, InstantScripts, a chemicals, energy and fertiliser division called WesCEF, and an industrial and safety division.

Kmart and Bunnings are two of the most impressive retail businesses in Australia, offering customers significant value while also generating high returns for shareholders. Wesfarmers still has significant growth potential due to its expanding store count, Bunnings' ability to diversify into other segments, and Kmart's expansion of Anko products into international markets. I think it's an appealing idea to make one's first investment in a company we can see and interact with in real life.

I expect Wesfarmers to be a much more profitable Australian stock in the coming years, which is the most important driver of the share price.

Future Generation Australia Ltd (ASX: FGX)

As I mentioned at the start, diversification is a powerful tool. A share's fund allows investors to gain a lot of diversification with just one investment. Future Generation Australia is a listed investment company (LIC) that is invested in multiple funds, so it offers significant diversification through just one investment.

Usually, fund managers charge a fee to manage money. However, all of the fund managers involved in Future Generation's portfolio don't charge a fee. They work for free to enable Future Generation Australia to make donations to youth charities each year. The investment returns have been solid and, as a bonus, have come with less volatility than the overall share market.

Plus, the Australian stock has increased its annual dividend each year for more than a decade.

REA Group Ltd (ASX: REA)

REA Group is one of the most Australian stocks you can get – it gives investors exposure to the property market.

Its key earnings generator is the real estate portal realestate.com.au, but it also owns various other Australian property-related businesses such as realcommercial.com.au, PropTrack, and Mortgage Choice.

The company has a very impressive market share in Australia, significantly ahead of Domain. It's able to achieve strong profit margins thanks to its pricing power, and I expect its Australian operations to earn significantly more in the years ahead.

As a bonus, the business has a very promising investment in REA India, which could become a sizable contributor in the coming years due to the scale of the Indian market and the ongoing adoption of digital tools by the population.

The post Here are 3 Australian stocks I'd tell a new investor to buy ASAP appeared first on The Motley Fool Australia.

I've been investing in ASX shares for a fair amount of time now. My portfolio currently consists of individual ASX shares, listed investment companies (LIC), and exchange-traded funds (ETFs).

My love for ASX dividend share income was sparked over a decade ago when I learned about the taxation benefits of franking credits. Extra money just for receiving a dividend?! Sign me up.

When investors receive a $70 fully franked dividend, the ASX dividend share also attaches $30 of franking credits, providing an investor with $100 of grossed-up dividend income. Isn't that great? The $30 is a refundable tax credit, which is added to the next tax return.

But $100 of income is not going to pay for much in retirement.

How much ASX dividend income I'm aiming for

One of the many useful things about dividends is that they're typically more consistent and reliable than capital growth.

Dividends are decided by the company's board as long as there is enough profit reserve and cash in the bank to do so.

I'd love to see enough dividends rolling into my bank account each year to pay for all of my desired annual expenses in retirement/financial independence. I view financial independence as receiving enough investment income to stop working if I wanted to but not necessarily choosing to.

If enough dividends were flowing in, I wouldn't even need to sell any of my portfolio. However, the inflationary period of the last few years has increased how much I'll need in dividends to cover life's expenses.

To start with, I'd just want enough income to cover the basics – to be able to keep paying for the roof over my head, the utilities, food, transportation, and other essentials like that. I'm currently aiming for financial independence – enough investment income to live off – rather than retirement, but I'd like enough passive dividend income to eventually retire as well, many years down the track.

I don't know exactly how much ASX dividend income I'll need for financial independence; it depends on inflation. But for now, I'm hoping to reach $60,000 in annual passive income. Ideally, I'd like to reach a larger figure so I can fund the basics like holidays, attending events, and other discretionary spending.

So, I'm approaching it one target at a time.

At this stage, I am a long way off receiving $60,000 annually; I'm only a fraction of the way towards that income goal.

But, the great thing about the power of compounding is that each financial target comes quicker as your portfolio grows by itself.

If a $10,000 portfolio grows by 10% in a year, it becomes worth $11,000.

If $100,000 grows by 10% in a year, it becomes worth $110,000.

If $1,000,000 grows by 10% in a year, it becomes worth $1,100,000.

To receive $60,000 of annual ASX dividend income with a portfolio dividend yield of 5% would require a balance of $1.2 million. That's quite a daunting target. But, as I demonstrated above, the last year of my investment journey could see my portfolio add over $100,000 to the goal organically, without including any additional investments from my own budget.

So, I just need to keep spending less than I earn each month, saving and investing some of the proceeds into the ASX share market. That's what I'm doing right now.

Hopefully, the investments I own will continue paying larger and larger dividends, unlocking a better lifestyle for me after year one of financial independence/retirement.

Which ASX shares I'm using

I can't mention every stock I own because I recently invested in some of them. The Motley Fool's disclosure rules mean I'll need to wait until later this week to write about them. Keep an eye out for that article!

But, some of the dividend-focused investments I can mention include Brickworks Limited (ASX: BKW), Hearts and Minds Investments Ltd (ASX: HM1), Bailador Technology Investments Ltd (ASX: BTI), Future Generation Australia Ltd (ASX: FGX), and WAM Microcap Limited (ASX: WMI).

I also own several compelling ASX growth shares, and I hope they can pay sizeable dividends as their earnings grow.

The post Here's how much ASX dividend income I'm aiming for in retirement appeared first on The Motley Fool Australia.

While the company capable of courting Lowe for his first job outside the RBA mightn't ring any bells to most, it's by no means insignificant. Today, the ASX-listed company's market capitalisation is $512 million — making it larger than fellow fund manager Australian Ethical Investment Ltd (ASX: AEF).

Which ASX stock is Philip Lowe buying?

Let me spare any further suspense. The company in question is Future Generation Australia Ltd (ASX: FGX), a listed investment company (LIC) of a different kind.

Founded in 1994, Future Generation Australia groups together 'leading' Australian fund managers into a single investment without charging shareholders management or performance fees. Instead, 1% of annual assets are put towards social good and not-for-profit organisations.

The company's website explains, "This [1% charitable payment] is less than the savings generated from foregone management, performance, service provider, board and investment committee fees."

Back to Philip Lowe.

Lowe happens to be the chair of Future Generation Australia, having taken over from former New South Wales Premier Mike Baird in March. Four months later, the former RBA governor has begun accumulating a position in the ASX stock.

According to change of interest notices, Lowe started buying shares in the company on 15 July. The first on-market purchase was 10,000 shares for $12,250. Two more orders for 10,000 shares each occurred on 16 July and 18 July.

The most recent buy happened only yesterday, adding another 10,000 shares to Mr Lowe's stash.

Philip Lowe purchased $49,1000 worth (or 40,000 shares) of ASX stock in total.

How has the fund performed?

The investment vehicle operated by Future Generation Australia allocates capital to more than a dozen different fund managers, including:

• Paradice Investment Management
• Regal Funds
• Wilson Asset Management
• Tribeca Investment Partners
• Firetrail Investments

According to a June update, the Future Generation Australia fund returned 14% over the last 12 months, beating the benchmark by 1.5%. For dividends, the fund offers a trailing yield of 5.4% based on the last two fully franked payments from the ASX stock.

The post Fee-free ASX investing stock the former RBA governor is buying appeared first on The Motley Fool Australia.

I like the idea of receiving dividends because it can be rewarding to receive the cash flow and still potentially get the benefits of capital growth as well.

Some people go for names that they might use in their daily lives such as Telstra Group Ltd (ASX: TLS) and Coles Group Ltd (ASX: COL). But, being invested in just one business doesn't seem to offer much diversification. It's useful to spread our eggs around a few different baskets.

If I had $500 to start investing, I'd consider putting it into one of these three.

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This exchange-traded fund (ETF) looks to give investors exposure to a portfolio of large global businesses that have been identified as climate leaders that have also passed screens that exclude companies with "direct or significant exposure to fossil fuels or engaged in activities deemed inconsistent with responsible investment considerations."

Some of the other exclusions include gambling, tobacco, for-profit prisons, alcohol, predatory lending and so on.

In summary, we can feel good about the shares this ETF owns in its portfolio.

It's invested in 200 names, across a range of countries – 70% of the portfolio is currently invested in the US, but other places are also well-represented including Japan, the Netherlands, Germany, Switzerland and the UK.

Some of the names it's currently invested in includes Nvidia, Apple, Visa, Home Depot and Mastercard. These sorts of businesses pay a dividend, though a relatively small one.

The ASX ETF has performed well after including the annual management fee of 0.59%. Over the past five years it has returned an average of 16.3% per annum, though past performance is not a guarantee of future performance.

Future Generation Australia Ltd (ASX: FGX)

Future Generation is a diversified listed investment company (LIC) that is invested in a wide array of ASX shares.

Unlike most LICs, it doesn't charge investors a management fee. Instead, it donates 1% of its net tangible assets (NTA) to charities that are focused on helping younger Australians. It's a great initiative.

The LIC's portfolio is invested in a portfolio of funds managed by various external portfolio managers that work for free, to enable those donations to flow. Some of the fund managers include Paradice, Bennelong, Regal, L1 Capital and Wilson Asset Management.

Future Generation aims to grow its dividend for shareholders each year, which it has done so since 2015.

The current grossed-up dividend yield is 8.5%. Since inception, the LIC's portfolio has outperformed the S&P/ASX All Ordinaries Accumulation Index (ASX: XAOA) by 1% per annum with Future Generation's return of 8.7% since September 2014, despite all of the volatility.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Pattinson is an investment business that has been operating for over a century and it's still going strong.

The ASX share is invested in a number of different sectors including telecommunications, resources, building products, financial services, agriculture and structured debt (yield).

In terms of ASX shares it owns, it has positions in TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Macquarie Group Ltd (ASX: MQG), BHP Group Ltd (ASX: BHP), Aeris Resources Ltd (ASX: AIS) and Tuas Ltd (ASX: TUA).

The company regularly invests in its portfolio in new opportunities to help grow its future value and cash flow. This strategy has enabled the ASX share to grow its annual ordinary dividend every year since 2000, meaning it has the longest dividend growth record on the ASX. The larger cash flow can help grow the dividend.

I think it's one of the most likely ASX shares to still be around in 20 years because of its investment style, so it's one we can just put in the bottom drawer and hopefully watch it grow.

The post Got a spare $500? Here's how I'd start buying ASX shares appeared first on The Motley Fool Australia.