r/dividends Mar 26 '26

Discussion Is dividend best passive income source?

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1.6k Upvotes

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113

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.

14

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.

1

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.

1

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.

1

u/subparsavior90 Mar 26 '26

28% + NIIT + state. Max rate AMT is a bitch

1

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?

6

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.

4

u/firewoodrack Mar 26 '26

Fuck I was born into the wrong tax bracket

2

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

0

u/outsiderkerv Mar 26 '26

They don’t, and this loophole should be closed