How would you feel if you received $500 each month for doing nothing?
That's $6,000 each year of passive income, which is pretty handy pocket money. That would easily pay for a nice family holiday.
So what's the size of investment in ASX dividend shares you would need to achieve this level of financial freedom?
Let's work it out.
How many BHP shares will I need?
Thanks to favourable tax laws, Australian investors are lucky enough to have a wide range of dividend stocks to choose from on the ASX.
But experts warn some stocks with extremely high dividend yields can be value traps.
That's because the yield could have increased due to a falling share price, which in turn could indicate flagging fortunes for the underlying business.
So for the purposes of our calculations, let's take a large, reliable S&P/ASX 200 Index (ASX: XJO) company such as BHP Group Ltd (ASX: BHP) as an example.
According to The Motley Fool stock profile, BHP shareholders currently enjoy an 8.4% dividend yield.
That means that in order to reap $6,000 each year, you currently need $71,428.57 worth of the mining giant's shares.
If you include franking credits, depending on your personal circumstances, the investment you need is even less than that.
Not bad at all.
How much do I need to save?
But if you don't have that large a sum to buy shares with right now, you'll need to start saving.
Are you able to save $2,000 each month to buy BHP shares?
According to Canstar, that's less than half the amount of the average monthly mortgage repayment in NSW.
If you can manage that, you will have bought enough BHP shares within three years to achieve your goal of grabbing $500 per month of glorious dividends.
Plus the bonus of earning a passive income from ASX shares is that there is the potential for capital growth.
Although share prices can head down, over the long term you stand a reasonable chance that the $71,428.57 of BHP shares will increase in value.