Superannuation has a low tax rate compared to individuals, trusts and companies. Plus, it's easy to invest for the long-term through the investment vehicle.

It's important to remember that the net income is an after-tax figure. An Australian working full-time could lose approximately a third of their passive income return to tax.

Therefore, investing in superannuation is a much more appealing prospect compared to other options. Superannuation has a lower tax rate in the accumulation phase than the standard individual tax rates for a full-time earner. In retirement, the tax rate could be 0%.

However, every Australian's tax position is different, so we're going to look at targeting a particular income level without mentioning tax any further.

How much is needed in superannuation for $7,500 of monthly passive income

Receiving $7,500 in dividends per month translates into $90,000 per year. I reckon many Australians would love to receive that level of dividends each year without having to do any ongoing work for it.

Australian investors need to decide what investments they want to own and the dividend yield that comes with that.

A portfolio with a dividend yield of 7% can be half the size of a portfolio with a dividend yield of 3.5% and earn the same level of passive income.

For example, if a portfolio were $1.3 million in size, it would generate $91,000 of annual passive income with a 7% dividend yield. If a portfolio had a dividend yield of 3.5%, the portfolio would need to be $2.6 million in size to generate the same level of cash payments.

To generate almost exactly $90,000 of annual passive income with a 7% dividend yield, an investor would need a portfolio size of $1.286 million.

A 5% dividend yield would require a portfolio size of $1.8 million to make $90,000 annually.

A 4% dividend yield would require a portfolio size of $2.25 million.

The types of ASX dividend shares I'd want to buy

If a superannuation investor is targeting mid-to-higher dividend yields, then I'd look at reliable and discounted real estate investment trusts (REITs), growing companies with a generous dividend payout ratio and listed investment companies (LICs) with a good track record of dividends.

Appealing businesses with a dividend yield of around 5% to 6%, in my view, include WCM Quality Global Growth Fund (ASX: WCMQ), Telstra Group Ltd (ASX: TLS), Rural Funds Group (ASX: RFF), Centuria Industrial REIT (ASX: CIP), Australian Foundation Investment Co Ltd (ASX: AFI) and Argo Investments Ltd (ASX: ARG).

Businesses with a higher dividend yield include Future Generation Global Ltd (ASX: FGG), Future Generation Australia Ltd (ASX: FGX), Hearts and Minds Investments Ltd (ASX: HM1), WCM Global Growth Ltd (ASX: WQG), WAM Leaders Ltd (ASX: WLE), WAM Microcap Ltd (ASX: WMI) and Charter Hall Long WALE REIT (ASX: CLW).

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There's only so much we can earn from our day job. After that, other forms of income are needed to boost the amount of money coming through the door.

When I think about which investment asset classes don't take much of our time as the portfolio grows in size, and can provide good passive income, I believe ASX stocks are the best option.

Great passive income

Online share brokerage has made it incredibly easy to invest in ASX-listed investments.

Once someone has invested in an ASX share, they don't need to do anything to run it or make decisions about whether to fix something or pay for a new item. The company's management does that for shareholders. We can just let the investment do its thing.

Assuming we've chosen an investment that pays passive income, the dividends will roll into the bank account with zero effort on our part.

Another great positive to ASX stocks for passive income is the dividend yields on offer.

Term deposits are offering a (temporary?) high interest rate right now, but there's no organic growth. Certain ASX dividend stocks can provide a better dividend yield than a term deposit rate and/or very good dividend growth.

A river of dividends

If creating passive income is the goal, I'd suggest investing in businesses that have a track record of growing the payout for investors, while also having a pleasing dividend yield to start with. As time goes by, the river flow of payments will become stronger.

That's why I'm attracted to names like Washington H. Soul Pattinson and Co Ltd (ASX: SOL), L1 Long Short Fund Ltd (ASX: LSF), Wesfarmers Ltd (ASX: WES), Telstra Group Ltd (ASX: TLS), Future Generation Australia Ltd (ASX: FGX), Future Generation Global Ltd (ASX: FGG) and Hearts and Minds Investments Ltd (ASX: HM1).

If someone invests $1,000 in an ASX dividend stock, such as L1 Long Short Fund, with a grossed-up 5% dividend yield (including franking credits), it would unlock $50 of annual income.

Imagine it then hikes the dividend by 10% in the following year. That's $55 of annual passive income.

Then another 10% increase would make it $60.50 of income.

And so on.

No dividend growth is guaranteed of course, but some businesses are more likely to deliver good dividend growth than others.

Imagine investing $1,000 multiple times. That would create hundreds of dollars of income that an Australian could use to boost their financial picture.

I know this is an effective method because I'm already utilising it and benefiting from it.

My household is getting the benefit of annual dividends that can now, after plenty of years of saving and investing, be measured in thousands rather than hundreds of dollars. Plus, they're delivering a pleasing mixture of long-term dividend growth and capital growth – exactly what I'm after!

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Investing for passive income in superannuation makes a lot of sense because of the low tax rate.

It's important to remember that the net income we receive from our investments is what we receive after taxes. An Australian working full-time could end up losing a third of their passive income to tax.

Therefore, investing in superannuation is a much more appealing prospect. Super has a lower tax rate in the accumulation phase compared to normal individual tax rates for a full-time earner. In retirement, the tax rate could be 0%.

But every Australian's tax position is different, so I'm just going to talk about targeting a certain income level, without mentioning tax any further.

How much is needed in superannuation for $5,000 of monthly passive income?

Receiving $5,000 per month of dividends translates into $60,000 annually. I'm sure most Australians would love to receive that level of dividends each year without having to do any ongoing work for it.

A key question is deciding what sort of investments Australians want to own and the dividend yield that comes with them.

A portfolio with a dividend yield of 6% can be half the size of a portfolio with a dividend yield of 3%.

For example, if a portfolio is $1 million in size with a 6% dividend yield, it would create $60,000 of annual passive income. If a portfolio had a dividend yield of 3%, the portfolio would need to be $2 million in size.

If the portfolio had an average dividend yield of 4%, generating an average of $5,000 in monthly passive income would require a portfolio value of $1.5 million.

The final dividend yield we'll look at is 5%. It would take a portfolio value of $1.2 million to unlock $60,000 of annual dividends.

The sorts of ASX dividend shares I'd look at

There is a wide range of ASX dividend shares available for superannuation investments, some of which offer higher yields and others that have lower yields (but could deliver more growth).

Some of the lower-yielding names that I'd look at, which could provide solid dividend growth in the coming years, are: Wesfarmers Ltd (ASX: WES), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), and Lovisa Holdings Ltd (ASX: LOV).

A few mid-range yielding ideas that could provide solid total returns at current valuations include WCM Quality Global Growth Fund (ASX: WCMQ), Telstra Group Ltd (ASX: TLS), Australian Foundation Investment Co Ltd (ASX: AFI), and Centuria Industrial REIT (ASX: CIP).

A few of the higher-yielding names that I'm bullish about for the long-term include WCM Global Growth Ltd (ASX: WQG), Charter Hall Long WALE REIT (ASX: CLW), and Hearts and Minds Investments Ltd (ASX: HM1).

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If someone has significant money in superannuation, they could unlock $10,000 of monthly passive income (or even more).

I'm sure most people reading this would love for their superannuation to pay them $120,000 per year of passive income.

A key question is how much is needed in superannuation for that level of cash flow.

How much is needed to generate $10,000 monthly passive income?

It'll take a sizeable sum to make that much money, but the exact amount will depend on the size of the dividend yield. The bigger the dividend yield, the less that needs to be invested, though higher yields may not be safer and it could also mean less capital growth.

Nonetheless, there are plenty of appealing options for good dividend yields across the ASX share market, so I'd be very willing to invest in a business that has a dividend yield of 7% or more.

Let's look at three different scenarios. One where the portfolio dividend yield is 4%, one where it's 5.5% and one where it's 7%.  

To make $120,000 of annual passive income from superannuation (or outside super) with a 4% dividend yield, it would require a portfolio value of $3 million.

If the portfolio has a 5.5% dividend yield, then an investor would need a portfolio value of $2.18 million.

Finally, with a dividend yield of 7%, investors would need a portfolio value of $1.71 million.

Which ASX shares I'd buy for dividend

I think there are a number of compelling options that offer different dividend yield levels.

For example, businesses like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Wesfarmers Ltd (ASX: WES) and Lovisa Holdings Ltd (ASX: LOV) offer a lower but growing dividend yield.

Businesses with a mid-range yield includes Rural Funds Group (ASX: RFF), Centuria Industrial REIT (ASX: CIP), L1 Long Short Fund Ltd (ASX: LSF) and MFF Capital Investments Ltd (ASX: MFF).

The higher-yield options I'd consider include WCM Global Growth Ltd (ASX: WQG), Hearts and Minds Investments Ltd (ASX: HM1), Charter Hall Long WALE REIT (ASX: CLW), Future Generation Australia Ltd (ASX: FGX) and Future Generation Global Ltd (ASX: FGG).

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Ideally, I'd want to find dividend options that have a high starting dividend yield, and a good chance of maintaining their payout.

Of course, those businesses need to be able to sustainably grow their dividends too. I don't think a high dividend yield is worth much if it's very likely to be reduced soon. That's a big reason why I'm highlighting the following ideas.

WAM Leaders Ltd (ASX: WLE)

WAM Leaders is a listed investment company (LIC) offered by Wilson Asset Management (WAM).

It mostly targets large ASX blue-chip shares to generate its returns, though it's significantly more active than an exchange-traded fund (ETF) like the Vanguard Australian Shares Index ETF (ASX: VAS). It's very willing to buy and sell shares in a position to take advantage when the market is being too pessimistic or optimistic.

At the end of March 2026, some of its largest positions included Telstra Group Ltd (ASX: TLS), Rio Tinto Ltd (ASX: RIO), Woodside Energy Group Ltd (ASX: WDS), Aristocrat Leisure Ltd (ASX: ALL), Wesfarmers Ltd (ASX: WES) and Nexgen Energy (Canada) CDI (ASX: NXG).

Between inception in May 2016 and March 2026, its portfolio produced an average return per year of 11.6%, outperforming its benchmark by an average of more than 2.5% per year, before fees, expenses and taxes.

The LIC's board is expecting to pay an annual dividend per share of 9.6 cents in FY26. That translates into a grossed-up dividend yield of 10.4%, including franking credits. It has increased its annual dividend each year since FY17.

Hearts and Minds Investments Ltd (ASX: HM1)

Hearts & Minds is another LIC, though it operates quite differently.

It's invested in a concentrated portfolio if between 25 to 35 global shares based on the best ideas from respected fund managers. There are no management fees involved, which allows it to donate to leading Australian medical research.

Some of its positions include TSMC, Zillow, Nvidia, Amazon and Brookdale Senior Living.

Due to how its portfolio is constructed, it has a diversified list of holdings that could perform over the longer-term and generate good investment returns over time.

In terms of the dividend, the business is looking to increase its payout by 0.5 cents per share every six months for the foreseeable future. That means the next two dividends are likely to be 20.5 cents per share. This translates into a grossed-up dividend yield of 10%, including franking credits.

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We don't necessarily need to be able t access the income immediately for it to be a good investment – it could be a great asset because of earnings stability and the more consistent returns that it delivers year to year.

Considering superannuation has a lower tax rate, there's less of a drag on after tax passive income returns compared to investments outside of super for a full-time working Australian.

Plenty of investors can invest in passive income assets through self-managed superannuation funds (SMSFs). Other super funds also offer the ability to invest in areas such as S&P/ASX 300 Index (ASX: XKO) shares – there are plenty of options within that index for income.

How to generate $2,500 of monthly passive income from superannuation

Each investor's situation will be different, so there's no one-size-fits-all approach that I can outline to say what the net income would be. Therefore, I'll focus on the gross income, before taxes and costs.

Generating $2,500 of monthly passive income equates to $30,000 per year.

The amount required to be invested would depend on the dividend yield (or interest rate) of the investments.

For example, if someone had $1 million invested with a 3% dividend yield, that would generate $30,000 of annual income.

But, with a larger dividend yield, an investor wouldn't need as much in superannuation to create that same level of annual/monthly passive income.

For example, with a 4% dividend yield, an investor would need $750,000.

A 5% dividend yield suggests investors would need a $600,000 portfolio.

If the dividend yield were 6% then it would require just a $500,000 portfolio.

Where I'd invest for a high yield

If I were looking for investments to unlock a high level of monthly passive income, I'd focus on businesses with a good dividend yield.

I'd look at names like MFF Capital Investments Ltd (ASX: MFF), L1 Long Short Fund Ltd (ASX: LSF), WCM Global Growth Ltd (ASX: WQG), Charter Hall Long WALE REIT (ASX: CLW), Centuria Industrial REIT (ASX: CIP), Rural Funds Group (ASX: RFF), Universal Store Holdings Ltd (ASX: UNI) and Hearts and Minds Investments Ltd (ASX: HM1).

But, I wouldn't want to forget about somewhat lower-yielding businesses that have a track record of regular dividend growth as well as attractive capital growth.

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Investors wanting to grow wealth relatively quickly may not necessarily want high levels of passive income because that could mean paying more of the return to the Australian Taxation Office. Capital gains aren't taxed until an asset is sold.

However, for investors in retirement or who have a low tax rate, ASX dividend shares with a large dividend yield could be a rewarding pick.

Hearts and Minds Investments Ltd (ASX: HM1)

This is one of the high-yield ASX shares that I've added to my own portfolio because of the investment exposure and high levels of passive income.

It's a listed investment company (LIC), meaning it doesn't sell products or services. Instead, the business has an investment portfolio that it aims to make investment returns with.

Dividends are paid from the positive investment returns, which allows it to pay steadily growing passive income. The company is aiming to increase its payout every six months by 0.5 cents per share.

The next two dividends to be declared should come to a total of 20.5 cents per share, which would translate into a grossed-up dividend yield of 10.3%, including franking credits.

Hearts & Minds donates 1.5% of its portfolio to medical research, it's able to do that because all of the investment picks are contributed for free by investment experts.

Some of the portfolio is decided by a core group of portfolio managers, while the rest is contributed at an annual investment conference, where some experts pick their best stock idea.

This process results in a largely global portfolio and the recent volatility could mean it's a compelling time to invest.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop is a leading ASX retail share that sells a variety of hair removal products. Considering how important hair removal is for many Australians, I think the business has relatively defensive earnings for a retailer.

The business has benefited from the steady growth of its store network, as well as the expansion of its own brand called Transform-U. Building its own brand can come with higher gross profit margin and stronger control of what products it sells.

But, the ASX dividend share also has a number of exclusive products from quality shaving brands, giving it a unique selling point (USP) for customers.

Pleasingly, the business has grown or maintained its dividend every year since 2017, so we're almost at a decade of dividend reliability.

The last two half-year dividends come to a grossed-up dividend yield of close to 11%, including franking credits.

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Not every large yield is reliable, though. Extremely high dividend yields may be funded by an unsustainable dividend payout ratio, or by a significant decline in the share price (which pushes up the trailing yield) as the market expects a drop in earnings (and dividends).

While the dividend yields I'm about to talk about are not guaranteed, I think it's likely the ASX shares will continue to pay large dividends for the foreseeable future.

Centuria Office REIT (ASX: COF)

This is a very unloved real estate investment trust (REIT) right now – it owns office buildings across Australian metropolitan locations.

In the last six months alone, the Centuria Office REIT unit price has declined by 20%, making it much cheaper.

The work-from-home trend has certainly been a headwind for office demand in the last few years. Recently, AI growth and rising interest rates have also been potential headwinds for earnings, office property valuations, and market confidence.

However, the properties are still generating rental income for investors, the buildings still retain significant value, and the land the ASX share owns is rising in value over time.

In the FY26 first-half results, the business reported its portfolio valuation increased by $42.8 million, marking the second consecutive period of valuation gains. That shows the business was experiencing green shoots last year.

The business also said it continued to sign new rental leases, while the supply of new office buildings remains restrained because of high replacement costs (and lower demand).

In FY26, the business is expecting to generate rental profit (FFO – funds from operations) of between 11.1 and 11.5 cents per security. The guided FY26 distribution of 10.1 cents per unit translates into a forward distribution yield of 10.75%. Even a 10% cut of the distribution next financial year would still see it pay a distribution/dividend yield of well over 9%.

Hearts and Minds Investments Ltd (ASX: HM1)

The other high-yield ASX share I want to highlight is a unique listed investment company (LIC) on the ASX. It invests in shares across the world.

Instead of just one fund management team being in charge of the investment decisions, it's invested in stocks that have been chosen (for no management costs) by various fund managers.

Some of the portfolio is chosen by a core group of permanent fund managers, while picks in the portfolio are decided by an annual investment conference where experts pitch a stock they think could be a strong performer.

The reason why so many investment professionals are willing to contribute ideas for free is that the LIC donates 1.5% of net assets each year to medical research. I think that's a great initiative and one well worth supporting.

This ASX share has pleasing dividend characteristics – it hasn't given shareholders a dividend reduction since it started paying dividends in FY21. It has grown its annual payout every year in that time, aside from FY23 when it maintained its dividend.

The ASX share has provided guidance that it will grow its half-year dividend by 0.5 cents every six months for the foreseeable future, implying that the next two dividends will be 20.5 cents per share. That translates into a grossed-up dividend yield of 10%, including franking credits.

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I'm always on the lookout for great dividend opportunities because I like to add the dividend cash flow I receive into my own personal finances.

I recently bought shares in Hearts and Minds Investments Ltd (ASX: HM1) earlier this month when it was trading at around $2.70 and I still think it looks like a wonderful buy today. Let's get into why.

Great dividend credentials

The ASX dividend stock operates as a listed investment company (LIC), meaning the board of directors have significant control over what size of dividend the company is going to pay to shareholders.

Pleasingly, Hearts & Minds has increased its annual dividend each year since FY23 and has announced guidance that it intends to increase its payout by 0.5 cents every six months for the foreseeable future, subject to there being no sustained period of "investment market underperformance".

The business has provided guidance that it's going to pay an annual dividend per share of 19.5 cents in FY26, which translates into a grossed-up dividend yield of approximately 10%, including franking credits.

If it continues that dividend growth trend, the FY27 payout could become a grossed-up dividend yield of 11%, including franking credits.

A very large and growing dividend is a very attractive feature, in my view.

Great time to invest

ASX LICs make it easy to assess their underlying value by regularly telling investors about the net tangible assets (NTA) per share.

In other words, what are all of the shares and cash that it owns worth on a per-share basis? This can help reveal how much a LIC is really worth.

Hearts & Minds tells investors each week what its NTA is. At 13 March 2026, it had pre-tax NTA of $3.16 – the Hearts & Minds share price is valued at an 11% discount to this.

I think a good LIC trading at a double-digit discount is an attractive prospect for good long-term returns.

Compelling portfolio

The ASX dividend stock's portfolio is not decided by one person or one funds management outfit like most LICs are.

Instead, a significant portion of the portfolio is decided by a continuing group of fund managers, who work for free so that Hearts & Minds can donate 1.5% of its net assets each year to medical research.

Another portion of the portfolio is made up of picks that are pitched at an annual investment conference. The idea is that these 'best picks' from investment professionals are combined in a portfolio that can hopefully perform well. These picks are also free of charge.

Over the three years to 28 February 2026, the Hearts & Minds portfolio delivered an average return per year of 10.8%, which gives it plenty of accounting profit to pay the growing dividend that it is now doing so.

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I'm not about to suggest that Aussies go out there and try to find a 15% dividend yield.

But, if we invest right, investors could end up generating a 15% yield on their initial investment. It will take some patience, though.

It's important to remember that some large dividend yields may not stand the test of time. A dividend cut may be on the cards for businesses that seem to have huge yields because investors have pushed the share price lower, betting that earnings and the payout are going to drop in the near future.

 I think there are two ways where we can unlock a large dividend yield of 15% (or more). Let's look at how.

Big starting dividend yield

I wouldn't expect any business to offer a sustainable starting dividend yield of 15%. But, there are some with yields of between 9% to 11% where I expect the business can maintain and slowly grow its payout in the coming years.

While it might take a while to reach 15%, I think this sort of business could deliver a big dividend yield at the start and become even larger over time.

There are some names that come to mind for large payouts such as WAM Microcap Ltd (ASX: WMI), Hearts and Minds Investments Ltd (ASX: HM1) and Shaver Shop Group Ltd (ASX: SSG).

With those sorts of dividend yields, if someone invested $10,000 then they could unlock $1,000 of annual income straight away.

Dividend growth

While huge yields may appeal to some investors, it could be a better call to look at businesses that are growing their payout at a faster pace. That could lead to stronger total shareholder returns (TSR) and eventually the yield could surpass what a higher-yielding business offers.

For example, if a 10% yielding business grows its payout by 2% per year, it becomes 15% yield in around 20 years. A business with a 5% dividend yield that's growing the payout at 10% per year becomes a 15% dividend yield on the initial investment after 12 years.

Of course, we can't know for sure what businesses are going to do with their payouts over the next decade or more.

What sort of businesses have a solid starting payout today and could deliver strong dividend growth over the longer-term?

I'd look at apparel retailer Universal Store Holdings Ltd (ASX: UNI), jewellery retailer Lovisa Holdings Ltd (ASX: LOV), investments business Pinnacle Investment Management Group Ltd (ASX: PNI) and ethical fund manager Australian Ethical Investment Ltd (ASX: AEF).

Either way, I think there are some very exciting investments out there for investors looking for a lot of passive income.

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I think there are some businesses that can deliver yields of more than 9%, or even 10%, and sustain those payouts year after year.

Large dividend yields aren't necessarily always the right pick for investors if they're in a high tax bracket, because it can mean losing a fair bit of the return to tax each year. But, for investors who do want a large payout, I think the listed investment company (LIC) Hearts and Minds Investments Ltd (ASX: HM1) could be the right call for a few reasons.

Large and growing dividend

The business is on track to deliver a very high dividend yield in 2026, with further growth expected in the subsequent financial years.

In its recent FY26 half-year results, it declared an interim dividend of 9.5 cents per share. It said it's "confident in the company's ability to maintain its dividend policy, and its stated intention of increasing fully franked dividends by 0.5 cents every six months for the foreseeable future."

That suggests the next dividends to be declared will be 10 cents and 10.5 cents, which amounts to an annual grossed-up ASX dividend yield of 10.75%, including franking credits.

At the time of writing, the ASX dividend share has a profit reserve of 83 cents per share, so there is ample room (in accounting terms) to continue increasing the payout for a few years.

Diversification

The ASX share is not just managed by one fund management outfit like many other LICs. Instead, its portfolio is constructed by multiple investment professionals.

Some of the portfolio is decided by a group of core portfolio managers who contribute ideas. Other portfolio picks come from an annual investment conference, where various investment professionals pitch a stock they believe could be a good investment for the next year.

Therefore, the overall portfolio isn't following any particular strategy, theme, or industry; it results in a portfolio that's quite diversified across industries and countries. I think it's a good option to ensure that we're not too exposed to one company or industry.  

These fund managers and investment professionals work for free so that the business can donate 1.5% of its net assets each year to medical research.

Solid returns

Past performance is not a guarantee of future returns, of course.

However, it's the LIC's investment returns that make the accounting profits, which then fund the ASX dividend yield.

At the end of January, Hearts & Minds reported that its investment returns over the prior three years had been an average of 12.4% per year. Recent volatility may have dampened its returns in recent weeks, though.

I think it looks good value, trading at an 18% discount (at the time of writing) to the pre-tax net tangible assets (NTA) per share value of $3.33, at 27 February 2026.

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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.

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A good passive income stock is one that can provide resilient dividends and grow its underlying value over time.

There's not much point buying high-yield ASX dividend shares if the share price and dividend decline over time.

So, I'm going to highlight two high-yield names that have a record of consistency and I think could deliver rising payouts over time.

Shaver Shop Group Ltd (ASX: SSG)

Shaver Shop has a goal to become the leader of hair removal products in Australia, with its national store network selling a variety of male and female wet and dry shave products.

The company recently released its FY26 half-year result which included positive numbers.

In the six months to 31 December 2025, sales grew 2.2% to $128.6 million, operating profit (EBIT) grew 2.5% to $18.1 million and net profit after tax (NPAT) climbed 1.5% to $12.2 million.

Pleasingly, online sales increased by 7.4% and the gross profit margin grew 100 basis points (1.00%) to 46.5%). The main driver of the ASX dividend share's gross profit improvement was the expansion of its private brand Transform-U.

Work on the store network in the HY26 period is supportive sales growth in the second half of FY26 and FY27. It opened two locations in the first half, with another one planned to open in March 2026. It also refitted one full store and relocated one in the half, with three full store refits and two relocations planned for the second half.

All of the above helped the business maintain its annual dividend per share at 4.8 cents per share in the HY26 result.

In terms of passive income appeal, the ASX dividend share increased its payout each year between FY17 and FY23, maintained it in FY24 and then grew it again in FY25 to 10.3 cents per share. That translates into a grossed-up dividend yield of 9.4%, including franking credits, assuming it just kept the dividend the same in FY26.

In the second half of FY26 to 22 February 2026, total sales grew 3.8%. I think this bodes well for another dividend increase in FY26, particularly if Transform-U continues growing.

Hearts and Minds Investments Ltd (ASX: HM1)

The other high-yield ASX dividend share I want to highlight is Hearts & Minds, a listed investment company (LIC).

Pleasingly, there are no management fees or performance fees involved with the portfolio. Instead, it donates 1.5% of its net assets each year to medical research to a variety of organisations. This could unlock life-changing, or life-saving, medical advancements.

The Hearts & Minds portfolio is constructed from two different sources. First, there's a core group of fund managers that make picks for the portfolio. Second, it holds an annual investment conference where leading investment professionals choose a single stock that could perform.

This approach provides both diversification and can lead to solid returns. The three years to December 2025 showed an average portfolio return of 14.7% per year. That's a high enough return to fund a large and growing dividend, while also seeing growth in the portfolio value.

Hearts & Minds recently declared a half-year dividend of 9.5 cents and intends to increase its payout by 0.5 cents per share every six months for the foreseeable future. The implied annual dividend per share of 19.5 cents for FY26 translates into a grossed-up dividend yield of 9.4%, including franking credits.

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

It's a special type of listed investment company (LIC) – there are no management fees involved in this LIC. Instead, the LIC donates 1.5% of its net assets each year to support Australian medical research.

Some of the beneficiaries it supports includes include the Bionics Institute, Black Dog Institute, Victor Chang Cardiac Research Institute, Muscular Dystrophy NSW, SpinalCure and more.

It's not just pleasing on the philanthropic side of things, but the dividend yield and the overall investment setup is appealing too.

Diversified investment portfolio

Hearts & Minds has a high-conviction portfolio of typically global shares with the picks from a select group of fund managers who contribute their best ideas for free.

Some of the portfolio of between 25 to 35 names are chosen at an annual investment conference. The names regularly change each year, but the diversified picks can deliver pleasing overall returns.

Over the last three years to 31 January 2026, its portfolio has returned an average of 12.4%. That's not the biggest return around, but I think the variety of names makes it a worthy addition to a portfolio.

Dividend yield potential

The business has a high level of franking credits and the board of directors is focused on releasing those franking credits to shareholders through "sustainable and growing fully franked dividends".

The high-yield business intends to increase its fully franked dividend by 0.5 cents per share every six months "for the foreseeable future".

Hearts & Minds Investments said that shareholders should expect a fully franked dividend of 9.5 cents to be paid with FY26 half-year result and a total dividend per share of 19.5 cents for FY26 (assuming there is no "sustained period of investment market underperformance")

At the time of writing, the ASX dividend share could provide a grossed-up dividend yield of almost 9.9% including franking credits and 6.9% excluding franking credits.

Considering the business reported that its latest weekly pre-tax net tangible assets (NTA) per share was $3.42 on 13 February 2026, that means it's currently valued at a discount of more than 17%.

This seems like a great time to invest and why it's a sizeable part of the income-focused side of my portfolio.

The post This 10% yield is one I'm comfortable holding for the long-term 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.

By ultra-long-term, I don't just mean for five or ten years. I'm thinking about several decades ahead.

Every sector may change significantly by the time I'm 100, so I like the idea of investing in companies that have the flexibility to change which industries they earn profit from. Investment businesses, like the two in this article, have the capability of changing their portfolios through asset sales and purchases. That's exactly what I'm looking for.

Let's take a look at two of my favourites below.

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

This ASX share has an incredible record of stability and long-term growth. It has already been operating for 120 years and looks like it could easily be around in another century.

The investment conglomerate owns a mixture of listed (mostly ASX) shares and private assets.

Its portfolio includes TPG Telecom Ltd (ASX: TPG), New Hope Corporation Ltd (ASX: NHC), Pengana Capital Group Ltd (ASX: PCG), BHP Group Ltd (ASX: BHP), Macquarie Group Ltd (ASX: MQG), Wesfarmers Ltd (ASX: WES), Commonwealth Bank of Australia (ASX: CBA), and Goodman Group (ASX: GMG).

Non-ASX investments include healthcare, swimming schools, agriculture, property, and credit.

I think this ASX share is a good investment because Soul Patts itself invests for the long term. Additionally, it has maximum investment flexibility to find the right assets that suit its investment objectives of capital growth and cash flow growth.

The growing dividend is an excellent feature of this business, but it is not the primary factor that leads me to expect to own this business for decades to come.

I believe Soul Patts has the potential to be around longer than virtually every other S&P/ASX 200 Index (ASX: XJO) share because of its freedom to invest anywhere (including overseas) and adjust the portfolio over time.

Hearts and Minds Investments Ltd (ASX: HM1)

Listed investment companies (LICs) are companies focused on making investments for shareholders. Depending on the investment mandate of the LIC, each portfolio could be targeted at a different asset class.

Hearts and Minds' portfolio is decided by a number of fund managers and investment experts who provide their choices for free so that the LIC can make sizeable donations to medical research each year.

Some picks are decided by a group of core portfolio managers, while other picks are decided each year at an investment conference called Sohn.

Hearts and Minds says this structure provides diverse industry and regional exposure while maintaining conviction in every investment.

It's invested in names like Amazon, Mercado Libre, Microsoft, Nvidia, Rokt, TSMC, and Airbus.

I like how it has a diverse portfolio of international and ASX shares, with the portfolio performing strongly. Over the last three years, its portfolio has returned an average of 16%, which I'd call a strong track record.

I believe this setup can deliver solid long-term investment returns and a rising dividend.

The Hearts and Minds share price regularly trades at a double-digit discount to its underlying net tangible assets (NTA), which is a very appealing valuation, in my opinion.

There's a lot to like about this ASX share, and I believe its portfolio can outperform the ASX 200 in the coming years.

The post 2 ASX shares I expect to own until I'm 100 appeared first on The Motley Fool Australia.

With the August reporting season done and dusted, scores of companies have ex-dividend dates next week.

If you're keen to buy any of these ASX shares while they are still trading cum dividend, time is running out!

To receive a stock's next dividend, you must buy or already own it before the ex-dividend day.

We provide a sample of the ASX shares going ex-dividend next week below.

35 ASX shares about to go ex-dividend

The post 35 ASX shares with ex-dividend dates next week appeared first on The Motley Fool Australia.

No one knows better how a company is actually faring financially than the people who count the money as it rolls in and out. As such, when these insiders buy up shares, it is a useful sign to the markets that said company might represent a buying opportunity.

So today, let's talk about three ASX financial shares that are currently experiencing this very situation.

Three ASX financial shares that insiders are buying

Fleetpartners Group Ltd (ASX: FPR)

First up, we have fleet vehicle leasing company Fleetpartners. An ASX filing from 5 February last week shows that board member and non-executive director Mark Blackburn recently picked up a big tranche of shares.

According to the filing, Blackburn purchased an additional 10,989 Fleetpartners shares on 3 February last week. Blackburn indirectly purchased these shares in an on-market trade at an average price of $2.73 each through a superannuation fund, implying a total buy value of roughly $30,000.

This takes Blackburn's total stake in Fleetpartners to 22,929 shares, which would be worth around $64,660 at the current share price (at the time of writing) of $2.82.

Fleetpartners shares have had a rough 12 months, with the company down 13.5% since this time last year.

Hearts and Minds Investments Ltd (ASX: HM1)

Next, let's discuss ASX listed investment company (LIC) Hearts and Minds Investments. An ASX notice from last week revealed that Hearts and Minds board member and director Guy Fowler OAM has recently made a big investment in the company.

The ASX filing shows that Fowler indirectly bought (again, through a super fund) an additional 63,920 Hearts and Minds shares on 3 February in an on-market trade. The director paid an average price of $3.26 for these shares, implying a buy value of $208,597.

This takes Fowler's stake in Hearts and Minds to just under 1.39 million shares, which would be worth approximately $4.74 million at the current share price of $3.41.

The Hearts and Minds share price has risen by 31.8% over the past 12 months.

BKI Investment Company Ltd (ASX: BKI)

Finally, we have another LIC to discuss in BKI Investments. This offshoot of Brickworks Ltd (ASX: BKW). In BKI's case, we have a 4 February ASX filing that reveals independent non-executive director Ian Thomas Huntley has recently gone on a bit of a buying spree.

The notice tells us that Huntley indirectly picked up an additional 286,000 BKI shares over 29, 30 and 31 January last month, through a private company called Huntley Group Investments Pty Ltd.

Huntley spent a total of $498,679 on these shares, implying an average buy price of $1.74 per share. This takes Huntley's total investment in BKI up to 11.87 million shares, or $20.3 million.

BKI Investments shares have stagnated over the past 12 months, slipping by 3.01% since this time last year.

The post 3 ASX financial shares being bought up by insiders 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.

I like investments that could provide a combination of dividends and capital growth. Some of my portfolio is focused on listed investment companies (LICs). I like the diversification each one can provide while having the control to provide more predictability with dividends than an exchange-traded fund (ETF) because of the company structure.

With LICs, there's also a potential to buy at a discount to the net tangible assets (NTA). In other words, I can buy a $1 basket of shares for less than $1.

Hearts and Minds Investments Ltd (ASX: HM1)

Hearts and Minds is an LIC that owns between 25 to 35 Australian and globally listed shares based on the highest conviction ideas from fund managers. Some of the picks are from a permanent group of fund managers (core managers), while other picks are chosen at the annual investment conference by a group of fund managers. It results in a fairly eclectic, diversified portfolio.

The portfolio was quite tech-focused during 2022, so it suffered amid the inflation and rising interest rate environment. However, the portfolio construction method has been altered so there won't be as much industry concentration from now on.

Some of the current names in the ASX dividend share's portfolio include BHP Group Ltd (ASX: BHP), Champion Iron Ltd (ASX: CIA), ASML, Formula One Group, Mastercard, and Microsoft.

The LIC doesn't charge any investment fees and instead donates to leading Australian medical research institutes like Black Dog Institute, Cerebral Palsy Alliance, and Charlie Teo Foundation.

It has a trailing grossed-up dividend yield of 8.1% and the current Hearts and Minds share price is at a 17% discount to the pre-tax NTA on 7 April 2023 (being the latest published weekly update at the time of writing). Those are appealing statistics to me.

L1 Long Short Fund Ltd (ASX: LSF)

This LIC is managed by L1, which looks to use a combination of short selling and 'long' investing in a mixture of ASX shares and international shares. At the end of March 2023, it had a total of 80 positions, with 56 of those being 'long' and 24 being 'short'.

Past performance is definitely not a guarantee of future performance but I have been impressed that over the past two years, the portfolio's net return has been an average of 16.4% per annum. This has enabled the ASX dividend share to pay growing dividends, while also achieving good NTA growth and share price growth. Just achieving 10% net returns per annum from here would be a good performance.

In the FY23 half-year result, it grew its interim dividend by 25% to 5 cents per share. The trailing grossed-up dividend yield is now 4.75%.

However, it wouldn't surprise me if the next passive income payment is 5.5 cents per share because the last two dividends have been increased by 0.5 cents from the last dividend. If that happens, the grossed-up dividend yield would become 5.25%.

The last published NTA before tax was $3.04 for 11 April 2023, which implies the current L1 Long Short Fund share price is at a 6.25% discount to this.

The post 2 ASX dividend shares I just bought for passive income appeared first on The Motley Fool Australia.