Investing small amounts consistently in high-quality ASX shares could be a simple yet powerful way to build a passive income for retirement. Even if the stock market is sitting near record highs, there are still plenty of fairly valued opportunities for long-term investors.

By focusing on strong businesses, reinvesting dividends, and staying patient, even modest weekly investments could grow into a sizeable nest egg.

Here's how you could turn $25 a week into a passive income stream that provides financial security in your golden years.

Buying quality ASX shares at fair prices

Not all stocks are created equal. The key to long-term success is identifying fairly valued, high-quality businesses with strong fundamentals. Companies with sustainable competitive advantages, low debt, and solid growth strategies tend to outperform over time.

Some examples of ASX shares that could fit this bill include global healthcare leader CSL Ltd (ASX: CSL) and sleep disorder specialist ResMed Inc. (ASX: RMD). These companies operate in industries with strong long-term demand and have a history of consistent earnings growth. By investing in such companies when they are trading at fair valuations, investors can benefit from both capital appreciation and growing dividends.

The power of regular investing

Many investors think they need a large lump sum to get started, but that's not the case. Making regular investments—such as $25 per week—allows you to steadily build wealth over time.

For instance, if the stock market delivers an average annual return of 8%, investing just $25 weekly could grow into approximately $380,000 over 40 years. From that, a 4% annual dividend yield would generate a passive income of over $15,000 per year. Increase the weekly investment amount, and that income grows even larger.

Reinvesting dividends for maximum growth

Dividends play an important role in wealth creation. By reinvesting dividends instead of spending them, investors can supercharge their portfolio growth through compounding. Many top ASX shares offer solid and growing dividends, such as Telstra Group Ltd (ASX: TLS) and Macquarie Group Ltd (ASX: MQG), making them attractive options for a long-term portfolio.

Patience is key

The stock market will have ups and downs, but long-term investors who stick to their plan tend to be rewarded. Staying invested, buying quality shares at fair prices, and letting compounding do the heavy lifting is a time-tested way to build wealth.

Foolish takeaway

Investing just $25 a week in fairly valued ASX shares can be an easy and effective way to generate a passive income for retirement.

By choosing strong businesses, reinvesting dividends, and remaining patient, investors can potentially achieve financial freedom without needing to rely on superannuation alone. And with time on your side, even small amounts can lead to big results.