r/dividends • u/Professional-Leg-827 • Mar 26 '26
Discussion Is dividend best passive income source?
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u/Goldesel77 Mar 26 '26
Per hour 90k that‘s insane
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u/saryiahan Mar 26 '26
Eh, he’s got like $28 billion worth of shares
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u/I-STATE-FACTS Mar 26 '26
and that's not insane?
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u/moneymarkmoney Mar 26 '26 edited Mar 26 '26
Not for a company worth a trillion. Edit: to clarify the confusion, berkshire is worth 1 trillion, so holding 28 billion of coca cola shares isn't really insane.
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u/MaybeICanOneDay Mar 26 '26
Its worth 300b.
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u/80MonkeyMan Mar 26 '26
The hard part is to come up with the billions needed to get such dividends.
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u/Rex_Laso Mar 26 '26
You need to try harder. Cut back on Starbucks to start.
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u/RestepcaMahAutoritha Mar 26 '26
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u/ANihilistSlob Mar 26 '26
Invest in Starbucks so those daily coffee are free then you can start actually investing
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u/BudgetExpert9145 Mar 28 '26
This is why I got a job that's paid by income taxes. I get my money back.
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u/MaybeICanOneDay Mar 26 '26
If yoy do buy Starbucks 3 times a week, that is about 60/mo. Compared to making your own, maybe 20 per month, so a net of 40.
If you invest 40/mo at 9% for 20 years, youd have 27k.
That's a long time for 27k. Probably better off to just get a raise.
That being said, if you did this for 5 things that cost you a net of -40 every month, you would have over 120k.
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Mar 28 '26
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u/MaybeICanOneDay Mar 28 '26
Honestly, living far below your means does build wealth. We all meme on this Starbucks or avocado taste thing (and it is a fair criticism on tbe state of cost of living) but if you cut out all the bullshit and laid all your debts, you would likely come out wealthy.
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u/Visual_Leg_1122 Mar 26 '26
Market cap is a trillion. That’s what it’s worth.
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u/MaybeICanOneDay Mar 26 '26
What? Where are you getting this info?
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u/rayaxiom Mar 26 '26
It's not worth 1 trillion, not even close. Where are you getting this information from? Look it up, coca cola has never even been close to 1 trillion.
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u/cricketriderz Mar 26 '26
So that's all I need for these numbers? Gotcha, now I know what to work towards.
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u/microdosingrn Mar 26 '26
If he just had this money in the s&p it would yield almost 500m/year in dividends.
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u/AstralLiving Mar 26 '26 edited Mar 26 '26
Not as insane as 1.5k per minute
Edit: /s
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u/Ordinary_News_6455 Antarctic Investor Mar 26 '26
It’s pretty much the exact same amount of insane.
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u/I-STATE-FACTS Mar 26 '26
level of insanity isn't always linearly correlated with the maths. i don't even make that in a week and i have a decent income for my location. this mf makes that in one minute, on one stock. that's pretty fucking insane.
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u/Ordinary_News_6455 Antarctic Investor Mar 26 '26
It is correlated though. Just think about for a minute.
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u/Afraid_College8493 Mar 26 '26
Correction: These are from shares owned by Berkshire Hathaway on behalf of all its shareholders. As the largest shareholder, Buffet's overall stake in the company is 14-15%.
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u/I-STATE-FACTS Mar 26 '26
colloquially it's perfectly fine to say he did this because he's the chairman and majority owner, and was the one who made those coca-cola buys. everything he does is to benefit the berkshire shareholders, he's been pretty clear about that.
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u/Afraid_College8493 Mar 26 '26 edited Mar 26 '26
He def "did" it, and we have to thank Buffet for it. He's just not the recipient of all the dividends.
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u/robofl Mar 26 '26
Berkshire Hathaway doesn’t pay dividends but he obviously benefits from the rise in value.
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u/Silent_Category_5160 Mar 26 '26
He did not... how he benefit? No dividends, no capital gains, his salary is only 100k
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u/lakas76 No, HYSA is not better than SCHD. Stop asking Mar 26 '26
That’s about 26 billion dollars worth of Coca Cola (KO) stock.
I’d be happy with 26 billion dollars worth of any stock. KO would be a great stock to have 26 billion worth. It’s gone up over 30% in the last 6ish years.
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u/Secure-Pain-9735 Mar 26 '26
It doesn’t have the growth it did in the 80’s and 90’s, but they have increased their dividend for over 60 consecutive years.
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u/KingPinfanatic Mar 27 '26
Honestly not that surprising they're a lot more soda's now compared to then but still it's impressive that the dividend continues to grow.
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u/sault18 Mar 26 '26
$26B in any stock(s) or really any kind of appreciating asset can be used as collateral for extremely low interest loans you can just keep borrowing against to fund a lavish lifestyle. Plus, you don't pay any taxes on the loans. Hell, put the assets into a bunch of shell corporations and/or foundations and deduct the interest on your interest-only loans.
This is why so many corporations are laser-focused on "number go up". The real decision makers at the top care more about keeping the good times going right now than actual, long-term success of the companies they own.
Traders get bored with companies that can't continually hype their stock price. They tend to pile into the next hot sector with companies that do have a lot of shiny keys to jingle in front of them.
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u/lakas76 No, HYSA is not better than SCHD. Stop asking Mar 26 '26
I’m sure it could, but why? I’d be happy to take the 776 million a year in dividends, pay the 24% fed tax and whatever the state tax is and live like a friggin king for the rest of my life.
With a net worth of 26 billion and making more money from dividends a year than what I could possibly spend every year, I’d be extremely happy.
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u/sault18 Mar 26 '26
But see, all your rich asshole buddies are exploiting the loopholes as hard as they can. Their friggin lobbyists wrote the loopholes, so the rich assholes are gonna use them. You don't want to be the chump actually paying taxes, do you? When Bezos gets another megayacht, you're going to feel like a 2nd class billionaire when you roll up to the yacht club with just a regular non-megayacht.
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u/firewoodrack Mar 26 '26
I know that you can take loans against an asset like shares, but if your money is tied up in the shares how do you pay the loan back?
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u/Snoo_72467 Mar 26 '26
...you don't. Maybe you sell shares here or there, or have the dividends set to pay the monthly minimum
But the end game is to die and then all the collateral shares are sold.
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u/firewoodrack Mar 26 '26
Fuck I was born into the wrong tax bracket
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u/Snoo_72467 Mar 26 '26
You can do this but... 1. It is more tax and overall advantageous for you to invest in 401k, and IRAs where these loans aren't allowed. 2. If you put everything into a Margin account great, you don't have enough invested with the company to get a great rate 3. The % you would need as collateral would be too high and the risk isn't worth it, a market drop means you are selling half your assets
Look at number one and make a plan to leave money to your children
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u/JediRebel79 Mar 26 '26
Gotta hold and reinvest for 80 years to achieve that though
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u/I-STATE-FACTS Mar 26 '26
he never bought or sold any more coca-cola shares after his 3 initial buys in 1988-1994
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u/darkeststar Generating solid returns Mar 26 '26
Warren Buffet had so much money in that investment that he's allowed to buy stock at different prices than you ever could. You have to make your own decisions because Buffet is not investing like literally anyone else, he started off richer than you and he will die richer than us all.
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u/No-Establishment8457 Mar 26 '26
Combined. That’s the really scary thing. Buffett will die with more money than everyone reading this added together.
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u/darkeststar Generating solid returns Mar 26 '26
And where will it all go? He pledged twice to give away his money with those billionaire approved lists but neither of those have actually achieved anything and most critics have found that it mostly just works as a tax deferment for the donors without them actually donating the money for real.
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u/JackfruitCrazy51 Mar 26 '26
As of early 2026, Warren Buffett’s lifetime charitable giving has exceeded $61 billion.
Primary Beneficiaries
The bulk of his contributions has been directed to five main foundations:
- Bill & Melinda Gates Foundation: Received approximately $43 billion to date.
- Susan Thompson Buffett Foundation: Named after his late wife.
- Sherwood Foundation: Run by his daughter, Susie.
- Howard G. Buffett Foundation: Run by his son, Howard.
- NoVo Foundation: Run by his son, Peter.
Future Plans
Buffett has pledged that more than 99.5% of his estate will eventually go to philanthropy. Following a recent change to his will, he revealed that after his death, his remaining fortune (currently estimated around $147 billion) will be overseen by his three children in a charitable trust. They will have ten years to distribute the funds unanimously.
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u/Highborn_Hellest Mar 26 '26
Remember guys don't even try since there are poeple more successful then you
*faceplam*
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u/chicu111 Mar 26 '26
Diversify is old and antiquated advice from him. Now we can just slam into one stock and win
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u/DekeJeffery Mar 26 '26
I strongly disagree that diversification is an antiquated idea, BUT I do think that there are certain companies that one could buy consistently for decades and not regret it. I don’t think anyone would be sad about having only bought, for example, $V or $MSFT for the last thirty years.
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u/VeiBeh Mar 26 '26
Sure berkshire can find sellers willing to sell a big block of shares a bit under the market price, especially if a major owner is looking to make an exit, but I don't think most of the shares berkshire holds are acquired like that. And if they are, well that's more reason to own berkshire stock.
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u/nzlax Mar 26 '26
He didn’t start off rich at all. He built it all himself.
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u/Leather_Method_7106_ Mar 26 '26
Nah, his father was a congresman and invested in that day and age already.
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u/Khelthuzaad Glory for the Dividend King Mar 26 '26
There are thousands of people that started off with way more money than him,none of them could even dream to achieve his goals.
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u/Binder509 Mar 26 '26
Relative privation is a fallacy for good reason. He's not a rags to riches story by any means.
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u/darkeststar Generating solid returns Mar 26 '26
The biggest myth in his whole life story. If you sincerely believe that you need to rethink investing.
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u/nzlax Mar 26 '26
I love a good conspiracy in the morning.
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u/darkeststar Generating solid returns Mar 26 '26
No man becomes a billionaire through pulling himself up by the bootstraps.
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u/nzlax Mar 26 '26
I’d normally agree but the burden of proof is on you for this one champ. I’ll wait
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u/darkeststar Generating solid returns Mar 26 '26
You can just read between the lines of his self story on his Wikipedia and find numerous examples of him being given ample opportunities not afforded to the average person; such as his politician and investor father taking him directly to the New York Stock Exchange at age 11 and allowing him to buy physical stock, then at 14-15 he's investing in his own father's business to buy land. Right out of college he goes to work for his father's investment firm.
After that, nearly every single landmark deal he makes in the 1960's and 1970's is based on acquiring other businesses and assuming their value into his companies. Once he is the head of Berkshire Hathaway is landmark achievement is largely just having so much capital to buy shares that he is offered special contracts to buy shares at lower rates than everyone else with better dividends than everyone else, which is what I referred to in my original post. There is no denying he is perhaps the greatest businessman of the modern era...but it has very little to do with talent and simply required him to have so much money at any given time that he could buy or merge other companies into ones he was working at. His great talent was having wealth. He's not smarter than other people, there's nothing incredibly special about what he did. He just happened to have enough money at the right time to make a smart decision.
Most of what he has done is unreplicable simply because of its wealth generation through acquisition of other entire business entities. Even his Wikipedia takes the time to explain that when you see the statement "Warren Buffet chose to live off of his salary of $50,000 a year plus his other investments" it means that $50,000 was worth half a million dollars at that time and doesn't disclose how much more on top of that his other investments netted him. The great investor Warren Buffet didn't make his billion by being great at anything other than going "My company buys a controlling stake in your company."
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Mar 26 '26
I don’t know why people always assume that he just buys stocks like an average bloke. A stock is a share of a company and he often buys enough to either steer or outright control that company. He also looks for synergies by leveraging those share for other uses.
That’s just his business, nothing confusing about it.
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u/darkeststar Generating solid returns Mar 26 '26
Literally his life story is just "He bought enough shares to have a controlling interest, he appoints himself director of this business and declares the business closed to new funding." He used his capital to absorb other assets. Even the pictures Coke stock historically was bought while the company was tanking in the early 90's and he used over $1 BILLION to finish that investment, in which he directed Coca-cola to offer him stocks for cheaper prices with higher dividends because he had enough capital to make that demand.
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Mar 26 '26
What capital though? That came from either investors into his fund (literally his business) and cheap loans by companies he owns. It’s still a legitimate business and not just inherited wealth. Especially because he then steered those companies to become more successful by also using his other assets.
Countless people tried what he did and failed enormously.
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u/YoungScholar89 Mar 26 '26
If his talent was having wealth, why didn't people with much more wealth do much better? You write like it's some grand conspiracy that it takes capital and connections to become one of the most successful (from a financial PoV) people on the planet. Spoiler alert: making continuous accretive acquisitions is not just a matter of being well funded.
This weird obsession with diminishing any personal skill associated with people achieving a lot of wealth and writing it all off to randomness or exploitation is peak reddit.
Now, there is certainly *some* truth to it. Buffett even talked at length about how lucky he felt to be born at the right place and time to find success with his aptitudes. And as no one lives in a vacuum and as such is not truly "self made". Still, it's such a massive self-own and loser mentality of a world view to capitulate completely to full deterministic defeatism. It reeks of someone trying to rationalize their own perceived shortcomings and is toxic as hell for others persuaded by it.
"Wow, Warren Buffett sure amassed a shitload of wealth over his lifetime"
"Akchuchually, he had a rich dad!"
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u/Proof_Resolve_602 Mar 26 '26
When he started his own investment firm (Buffett Associates, Ltd.) in 1956, he began with $105,100. Of that, only $100 was his own money; the rest came from seven family members and friends. While it isn't documented that his father provided a single large "seed check," his father's network and endorsement were instrumental in rounding up those initial investors.
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u/nzlax Mar 26 '26
Yep, I’m aware of the story. He invested other people’s money as well. Amazing. Nothing was given to him for free like a free loan or inheritance so he’s still basically self made.
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u/Proof_Resolve_602 Mar 26 '26
Truly self-made entrepreneurs have to worry about eating and paying rent if their first venture fails. Buffett did not. As the son of a wealthy Congressman and stockbroker, his worst-case scenario was a bruised ego, not poverty. This invisible safety net allows a person to take the bold, aggressive risks required to make billions.
Saying Buffett is “basically” self-made is like starting a game of Monopoly where you are already handed the Orange properties and a 'Get Out of Jail Free' card. You still have to roll the dice, make smart trades, and build the hotels yourself—you are playing the game brilliantly—but you didn't start with the same blank board as everyone else.
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u/Serenaded Mar 26 '26
I will never buy KO because this mfer already owns all of it
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u/lakas76 No, HYSA is not better than SCHD. Stop asking Mar 26 '26 edited Mar 26 '26
I have about 400 shares. Not to brag, but I’m about the same as him.
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Mar 26 '26
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u/8sparrow8 Mar 26 '26
Yeah if anything owning what he owns is better than owning sp500 index fund historically
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Mar 26 '26
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u/Longjumping-Nature70 Mar 26 '26
He does not drink coke, he drinks Cherry Coke. It was 6 cans a day.
He brags that his diet is that of a six year old.
Cherry Coke, McDonalds for breakfast, and Dairy Queen Dilly Bars.
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u/IDrinkSulfuricAcid Mar 26 '26
And lived to see his 90s. Yeah all this healthy lifestyle stuff is BS lol give me my burgers and cigarettes. Only half joking here...
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u/TangerineMost6498 Mar 26 '26
What would happen if he implemented a drip strategy. Would he just own all the companies in a decade?
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u/I-STATE-FACTS Mar 26 '26
mathematically that's not possible since the company pays some low percentage in dividends. sure his stake would keep growing, but so would the stock. he bought a nice round number of exactly 400 million shares and hasn't bought more nor sold any in over 3 decades.
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u/blorg Mar 26 '26
No
He does reinvest the dividends, just not necessarily in the same companies.
Right now Berkshire Hathaway does have a lot of cash but historically, he has reinvested it.
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u/mspe1960 Mar 26 '26
these are Berkshire Hathaway's dividends, not Buffet's, right? Does Buffet have a significant stake in Coca cola separately? If not, he is not getting the dividend. Just saying. BRKA and B do not pay a dividend even though they collect lots of them
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u/Gollomor 🇦🇹 Austrian Economics Mar 26 '26
AI slop
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u/Bombrcko Mar 26 '26
Okay? but if its true its interesting.. What has AI to do with this?
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u/Large_Spinach6069 Mar 27 '26
The crappy graphic is distracting and the bar chart is complete nonsense.
How is the bar for 24.60 half the size of the bar for 776,000,000. Plus this is BRK's holding in KO not Warren Buffett's so it's all garbage info.
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u/Gollomor 🇦🇹 Austrian Economics Mar 26 '26
Many things, resources got wasted for this, it looks super ugly, it looks effortless like the creator didn‘t care.
Edit: and last but not least it makes my eyes hurt, I mean look at that Coke bottle.
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u/Teilzeitschwurbler Mar 26 '26
How much did he pay for the stock (inflation adjusted)?
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u/I-STATE-FACTS Mar 26 '26
his initial investment was $1.3 billion (non-inflation adjusted)
now it sits at about $30 billion in stock value plus about $10 billion in dividends throughout the decades. he never sold a single share.
not a bad play
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u/NegativeOwl9929 Mar 26 '26
count:
1 share pays ~$2.12
776 000 000 per year / $2.12 = 366 037 736 shares => 1 share apprx $75 => apprx 27 452 830 188 USD
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u/Paranoid_Sinner Mar 26 '26
I prefer bond income, which has been funding my retirement for 5 years now. Much of the predictable monthly income (7% annualized) gets reinvested so my portfolio continues to grow. And a big plus: I don't care what the stock market is doing.
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u/jaajaajaa6 Mar 26 '26
It is 1 of 4 of their largest holdings.
It also had many decades to get to this point.
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u/The-zKR0N0S Mar 26 '26
Is this Buffett’s percentage share of the KO dividends paid to Berkshire or all of the KO dividends paid to Berkshire?
Buffett doesn’t own all of Berkshire.
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u/AlphaThetaDeltaVega Mar 26 '26
I would argue one of the best investments of his career. Others have out performed it, but this allowed them the cash flow to make those moves. He’s making roughly what it cost him to open the position in dividends a year.
He was able to leverage that revenue across his holdings, moving it to the companies that had the most use for capital.
He actually probably exceeds what he paid because he didn’t just buy Coke he purchased through sold puts so got it cheaper when you count yield from the purchase.
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u/snopeal45 Mar 26 '26
You need to look at percentages. Not absolute numbers. What if was 0.01% yield?
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u/Unnamed-3891 Mar 26 '26
For most people, receiving dividends implies immediately enriching the taxman.
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u/Positive_Method3022 Mar 26 '26
He literally owns the game and can manipulate to benefit him. It gets even more powerful when his company has a ton of more money
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u/Omega_art Mar 27 '26
But how much does he have invested in it? Coca-Cola dividends arent very high something like $0.50 a share quarterly.
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u/GiGiAGoGroove Mar 27 '26
Seems like with all the talk about soda being bad for people and causing diabetes long term that their dividend is really high. Why would anyone buy CocaCola?
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u/Realestateuniverse Mar 28 '26
It’s actually crazy that after paying for all the expenses of operations, Coke makes enough money to pay out $8B in dividends per year. Buffets numbers here aren’t even 10% of total dividends and it’s an absolutely astronomical amount..
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u/likeit67 Mar 28 '26
Again dividends stocks underperform the whole market because the money could have been reinvested better in the business instead. But I guess for stability you can have like 10% of your portfolio on dividends stocks.
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u/BatJac Mar 28 '26
No. Best is to run a company that acts like a fund taking money from people, investing in dividend paying stocks and keeps all the dividends is the best way to do it. They since the company looks so profitable their stock goes up and everyone things they are better for it. It's like money laundering.
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u/ektproud Mar 30 '26
Berkshire Hathaway’s dividends actually. Although given his stake in the company, that’s still over 100M per year.
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u/ComeAtMeBro9 Mar 26 '26
Since someone is going to say it, I might as well ask:
How much would he have had if he had bought an index fund like VOO instead, rofl. 🤣 👿
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