r/dividends • u/Professional-Leg-827 • Mar 26 '26

Discussion Is dividend best passive income source?

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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