Building a $5,000 a month passive income stream is a dream I'm sure many people have.

But how could you turn this dream into a reality?

Well, the good news is that it is possible with ASX shares. It just takes a combination of capital, a plan, and patience.

Here is a three-step plan to help you on your way.

Step 1: Set your target

There's no getting away from the fact that to generate $5,000 a month, or $60,000 per year, you are going to need a large sum of money.

In fact, based on an average dividend yield of 5%, you will need a portfolio valued at $1.2 million to generate the targeted income.

If you are lucky enough to already have this amount at your disposal, you can move onto step three. But if you are not as fortunate as this (i.e. the majority of people), you will have to work your way through step two.

Step 2: Focus on growth first

It might seem counter-intuitive, but income is something you don't want to focus on initially.

Instead, you want to grow your portfolio to the $1.2 million mark as quickly as you can so that you can then make your money work for you. Taking out dividends during this part is only going to slow down your wealth creation.

This means putting your money in high-quality ASX shares that have the potential to compound over the next decade and beyond.

Companies with strong and sustainable business models, leadership positions, and positive growth outlooks are the types you want to look for. This might include the likes of Goodman Group (ASX: GMG), ResMed Inc. (ASX: RMD), and Telix Pharmaceuticals Ltd (ASX: TLX).

Assuming a long-term average annual return of 10%, you could get to the $1.2 million level in a touch under 25 years if you invested $1,000 a month.

Are you able to invest more? $2,000 a month would get you there in a touch over 18 years, all else equal.

This will take time, but once you are there, it's time to move to the next step.

Step 3: transition to income

Once you've built your nest egg, you can gradually pivot toward reliable dividend payers and income-focused ETFs.

By allocating your $1.2 million into a portfolio yielding 5%, you'd be earning approximately $5,000 a month — without needing to sell your capital.

Foolish takeaway

Making $5,000 a month in passive income is a marathon, not a sprint. But it's a race that many investors can finish — with the right mindset, strategy, and time horizon.

Start by focusing on growth. Keep your contributions regular. And when the time is right, shift gears toward income. With patience and discipline, you can turn your portfolio into a reliable second income stream — and live the kind of financial life many only dream of.