Edward Watkins | York Heritage Capital

For numerous Australians, the primary financial goal is to achieve a stage where investment income can significantly substitute a salary. It does not have to be an all-or-nothing transition; many individuals combine part-time employment, consulting, or semi-retirement while their investment portfolio gradually covers a larger portion of their living expenses.

Dividend investing represents one of the most straightforward methods to create that flexibility.

This leads to a crucial inquiry: what amount of capital would be necessary to generate an income equivalent to the Australian average salary solely through passive income?

Edward Watkins a Fixed Income Adviser from York Heritage Capital says, full-time average weekly earnings reached $2,010 per week in May 2025, with slight variations in earnings between males and females based on whether they work in the public or private sector. When these figures are converted to annual income, they range from approximately $92,000 to $119,000.

To simplify this analysis, we will use $100,000 as a clear, realistic benchmark that is close to the national average and easy to calculate.
What size portfolio is required to yield $100,000 in passive income?

Watkins says dividend yields fluctuate from year to year as businesses do not grow in a linear fashion. Some companies, such as Washington H. Soul Pattinson (ASX:SOL), have provided decades of increasing dividends; however, no income stream is entirely predictable. Therefore, it is more practical to consider an average portfolio yield rather than focusing on individual stocks.