If you have $10,000 gathering dust, then it could be worth putting it to work in the share market.

Especially if you are looking to generate passive income in the future. But how would you go about constructing a portfolio? Let's have a look at one way you could do it.

Building a $10k passive income portfolio

Firstly, when building a portfolio, you want to ensure that it is diversified. Doing so will mean that you are at least somewhat protected from any downturn in certain sectors.

For example, if you loaded up purely on ASX bank stocks, your portfolio and passive income would take a major hit if there were a banking collapse. Whereas if you only had minimal exposure to the banks, the rest of your portfolio would hopefully be able to offset this negative impact.

That said, the banks have been on a tear over the past 12 months and most analysts believe they are overvalued right now. As a result, they won't feature in this hypothetical ASX passive income portfolio.

Which ASX shares?

As with any type of portfolio, you will want to buy the best ASX shares you can get your hands on.

These are companies that have strong business models, positive long term growth outlooks, and sustainable competitive advantages.

Dividend-paying stocks that tick these boxes include supermarket giant Coles Group Ltd (ASX: COL) and computer hardware and software wholesaler Dicker Data Ltd (ASX: DDR).

Bell Potter recently initiated coverage on Coles' shares with a buy rating and $21.55 price target. It is forecasting fully franked dividend yields of 3.8% in FY 2025 and 4.4% in FY 2026.

Whereas Citi has a buy rating and $11.70 price target on Dicker Data's shares. As for income, it is forecasting dividends per share of 47 cents in FY 2024 and then 50.6 cents in FY 2025. This represents 5.1% and 6.6% dividend yields, respectively.

Other companies that could be worth considering for this ASX passive income portfolio are private health insurer NIB Holdings Limited (ASX: NHF), retail conglomerate Super Retail Group Ltd (ASX: SUL), telco giant Telstra Group Ltd (ASX: TLS), and toll road operator Transurban Group (ASX: TCL).

Goldman Sachs rates NIB, Super Retail, and Telstra shares as buys with price targets of $6.60, $18.60, and $4.35, respectively, whereas Citi has a buy rating and $14.30 price target on Transurban's shares. Importantly, dividend yields of 4.1% to 4.8% are expected from all four dividend shares.

Overall, a $10,000 ASX passive income portfolio split evenly across the six ASX shares named above would generate annual income in the region of $400 (and growing).