All the ASX shares I've ever bought have this one thing in common

Here's why I was drawn to my investments.

A man in business pants, a shirt and a tie lies in the shallows of a beautiful beach as he consults his laptop on the shore, just out of the water's reach.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The ASX shares that I've got in my portfolio all have something in common: they all pay passive income. I like receiving dividends, though that's not the only thing I look for.

It's understandable why plenty of investors are attracted to names like Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP) and Woodside Energy Group Ltd (ASX: WDS) – blue chips paying large, fully franked dividends.

But, I'm not looking for maximum passive income. I want to find investments that can deliver strong total returns, but they need to deliver some sort of annual passive income payment.

Why I love passive dividend income so much

I'm invested in a number of dividend-paying ASX shares such as Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Brickworks Limited (ASX: BKW), Duxton Water Ltd (ASX: D2O), Fortescue Metals Group Ltd (ASX: FMG), Altium Limited (ASX: ALU) and Rural Funds Group (ASX: RFF).

Thankfully I'm sitting on capital gains on each of those investments.

I like that all of these businesses pay dividends from their profit because it means I don't need to sell any of my shares to access some of the returns or profit.

I know myself – trying to think about when to sell would likely stress me out. I'd also probably feel regret if the sold shares went higher after I'd sold them. I want to feel relaxed and rewarded regarding my ASX share portfolio, not stressed and regretful.

I'd also hate needing to sell during a market decline at a discount price – I'd rather be buying than selling during a time like that. Receiving the cash flow of dividends means that each of my investments is sending me 'real' returns each year. I don't need to sell, pay brokerage fees or trigger any capital gains tax events.

I think that focusing on the dividend income means I can focus on the long-term and the profit, rather than worrying about what the share price is doing in the short-term (particularly when there are declines).

For the Australian companies that attach franking credits to their dividend payments, I like that the passive dividend income is boosted when it comes to the after-tax yield.

Finally, I like that dividend payments can provide fairly consistent returns every three/six/twelve months.

If I choose the right dividend-paying ASX shares and buy at a good price, I can benefit from both dividends and capital growth over the long term.

Foolish takeaway

For my own (and my family's) personality and mindset, I think I've settled on what works best. However, I also love looking at ASX growth share opportunities as part of my work – that's what's so great about the ASX share market, we can find opportunities in all parts of the market.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tristan Harrison has positions in Altium, Brickworks, Duxton Water, Fortescue Metals Group, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

Middle age caucasian man smiling confident drinking coffee at home.
Dividend Investing

Buy BHP, Telstra, and this ASX dividend share

Brokers are tipping these shares as buys for income investors. But why?

Read more »

The letters ETF sit in orange on top of a chart with a magnifying glass held over the top of it
Dividend Investing

Boosting passive income: With a 7.6% yield, is the YMAX ETF a good option?

Is this ETF's yield too good to be true?

Read more »

A man in a business shirt and tie takes a wide leap over a large steel trap with jagged teeth.
Bank Shares

5.75% yield: Are ANZ shares a dividend trap?

ANZ's dividend currently beats out its own term deposits.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

Here are 3 buy-rated ASX dividend stocks to beat falling interest rates

Brokers are recommending these stocks to clients.

Read more »

Senior man wearing glasses and a leather jacket works on his laptop in a cafe.
Dividend Investing

Overinvested in BHP shares? Here are two alternative ASX dividend stocks

There are other businesses worth owning for passive income.

Read more »

Happy young couple saving money in piggy bank.
Dividend Investing

3 strong ASX dividend shares to buy instead of CBA

Analysts think these are better options than Australia's largest bank.

Read more »

Male hands holding Australian dollar banknotes, symbolising dividends.
Dividend Investing

Why I'd buy ASX dividend shares now before it's too late

This could be the right time to look at ASX dividend stocks.

Read more »

Three happy office workers cheer as they read about good financial news on a laptop.
Dividend Investing

Beat low interest rates with these ASX dividend shares

As expected, on Tuesday the Reserve Bank of Australia elected to cut the cash rate once again. And with interest…

Read more »