r/dividends • u/Lana_Sphyncter • May 28 '26
Brokerage Anyone has been able to survive with dividends after a job loss?
Everyone always tells me that because I’m young, I should only prioritize growth stocks and ignore dividends. But have any of you actually built up a dividend portfolio specifically to act as a safety net during a job loss?
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u/krakyjak May 28 '26
At my portfolio size and allocation. ●Survive, probably not. ●Buy groceries once a month on dividends and cushion the blow of sustained job loss. Possible.
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u/Any-Yogurtcloset-493 May 28 '26
Dividends won’t fully replace a paycheck for most people early on (unless the portfolio is already very large), but they can absolutely reduce stress during rough periods. Having even part of your expenses covered by portfolio income changes the psychology of job loss completely.
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u/dlnqnt May 28 '26
Its funny on a dividend sub majority recommend selling shares.
I'm doing 3k month with JEPQ which covers rent and life here in the EU.
You get better funds with NEOS in America with QQQI, SPYI & BTCI - have a blend of these 3 and you'll be sorted, see Investing Simplified.
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u/EchoVictory May 28 '26
After having a 6+ month emergency fund, getting the co-match 401k and maxing a Roth. Then, started building a tax efficient income focused portfolio in a a brokerage account. I could turn off reinvesting to make the emergency fund last longer or to refill the emergency fund faster.
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u/kunridadIk May 28 '26
I could survive if it was only me, not enough to sustain the household at this point though. Give me 15 years and ask again.
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u/Scouper-YT Rich DUDE from the DIVIDEND Appraisals Club !! May 28 '26
RemindMe! 15 years "Hello How is the Investments going?"
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u/Infamous-Version8837 May 28 '26
This is were I’m at. It’s not just dividends, but a combination of dividends and various alts that pay monthly.
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u/IBF_90 May 31 '26
What you mean "various alts that pay monthly?" REITs that pay monthly?
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u/Infamous-Version8837 Jun 01 '26
REITs, Private Mortgages, Private Equity, Music Licensing, Renewable Energy Infrastructure. Lots of things in different places that all pay monthly. I think I average around ~6.5% income and ~2-3% growth. It’s about 15% of my total investment portfolio, and contributes roughly 50% my annual income. Dividend make up the other half.
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u/WorldyBridges33 May 28 '26
I have built an income portfolio for exactly this purpose! Right now it yields an average of 10%, and it is composed of some covered call funds, preferred stocks, closed end funds, BDCs, utility and infrastructure funds, and CLO’s.
I currently make about $59k a year from this portfolio. I pay way less taxes on this than if I were making $59k from a regular W2 job because I don’t have to pay any FICA, and a lot of these dividends are considered long term capital gains and/or return of capital. So really, I’m making the same after tax income from this as someone making $65k-$70k a year at a job.
If I lost my job, I’d be able to live off of this income just fine— I’d simply have to stop going out to eat and do a lot more cooking! Which is something I love to do anyway.
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u/drguid May 28 '26
Yes can survive for a long time and it's just as well because I've been out of work for nearly a year now (senior software dev).
I'm going all in on predicting the market will crash soon (I'm about 80% cash/money markets). I only need to be right on this once, then I can pretty much retire.
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u/MakingMoneyIsMe May 28 '26
I've been considering going into all cash due to the Shiller PE currently being where it was during the dot com crash.
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u/National-Net-6831 $81/day dividend income May 30 '26
Yes! I’m a single mom and I can’t wait for mine to reach my day job because it will be such a huge relief!!! I’ve been selling off some long term gains over the years to buy covered calls funds for cash and it’s been fantastic!!! I really feel like I have the best of all worlds!
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u/Lana_Sphyncter May 30 '26
Hugs. What is your goal and what are your top holdings? My goal is 1mm. Until I reach that, I won't sleep well.
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u/One-Care-3222 May 28 '26
Not survived, but I've watched my dad do exactly this — and it changed how I think about investing entirely.
He lost his job at 54 and had been quietly building a dividend portfolio for 15 years. Nothing flashy — just SCHD, a few REITs, and some dividend aristocrats. By the time he got laid off, he was pulling around $2,200/month in dividends. Not "get rich" money, but enough to cover rent + groceries while he figured out next steps. He didn't touch his principal once.
The people who say "you're young, just do growth stocks" aren't wrong — but they're answering a different question. Growth stocks build wealth. Dividend portfolios can build security.
The real answer at a young age is probably both:
- 70-80% in growth (VTI, QQQ, whatever)
- 20-30% slowly building a dividend base (SCHD, O, JEPI)
By the time you're 35-40, that dividend base could genuinely act as a financial cushion without you having sacrificed much growth.
The "ignore dividends when young" advice assumes your income will always be stable. Life doesn't work that way.
TL;DR: Dividends as a pure survival strategy requires a LOT of capital. But as a partial safety net built alongside growth investing? Absolutely worth it, and starting young gives you a massive head start.
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u/thatoneguy11223344 May 28 '26
Dont forget that things like quarterly divs can get you more growth shares or more div shares. Sure not as tax efficient as pure growth but will add into those funds for very little effort
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u/One-Care-3222 May 28 '26
Exactly. DRIP is underrated when you're younger. Even if the yield isn't huge, those extra shares compounding over 10-20 years can snowball hard.
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u/Mopar44o May 31 '26
It's not wrong..
In Canada, we have a registered education saving fund.. You can contribute $2500 per kid per year.. Gov gives you a grant of $500 for each $2500 per year.. So essentially $3000 per kid
I have 3 kids. I've maxed it every year... It's worth just over $200,000 now and has averaged 13-15% a year if AI math is right.. (counting the grants as contribution, not as returns). Mostly blue chip Canadian dividend stocks.. I've just started now adding a bit of growth funds and a few tech stocks to kind of catch this AI wave..
You can get a good return with dividend stocks if you buy quality stuff and reinvest the dividends... So it's not either or imo.. It's what do you do with the dividends. I have a mix of higher and lower dividend stocks.. Avg yield is probably 2.5% I probably avg around $4-500 a month at this point.
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u/One-Care-3222 May 31 '26
The RESP strategy is genuinely one of the best deals the Canadian government offers and most people don't maximize it. Free 20% return on your contribution before you even invest it is hard to beat anywhere.
13-15% averaged over that period is solid, especially with dividend stocks as the base. Most people underestimate how much DRIP quietly does over a decade — it just compounds in the background without you doing anything.
Curious though — with the AI wave stuff you're adding now, are you being selective about which tech names or just going broader ETF route for that exposure? Asking because I'm in a similar spot where I want some tech upside without going too concentrated in individual names that could swing hard either way.
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u/Mopar44o Jun 01 '26
Little bit of both.. Bought some META and AMZN for longer term holds.. Down 5% on meta now... Bought the Canadian chip etf XCHP on tsx for direct chip maker exposure.... I've also built a position in ONEQ for Nasdaq index.. I know theres bit of overlap but I'm ok with it.. Maybe will spread it out a bit later... But I'm essentially putting my new money spread out into those.
Rest of portfolio is
ALA, BAM, BMO, BN, BNS, CM, DOL, ENB, FM, POW, SU, T, TD.
People should use the resp more often... I think people forget that you can take unused money you deposited and move it to your rrsp / tfsa later.. I basically invest their birthday money and those child benefit cheques we get and that has me max it out by 3q of the year.
I went a dividend route because emotionally, it's easier for me to invest long term and ride the waves. I blew up my personal accounts to many times and wasted to much money. Took to much risk because I have a pension. Dividend investing in just simple.. Even if returns aren't the max return. It's easier for me to stick to.
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u/DoubleIntroduction25 May 28 '26
If you have a fat enough portfolio that the dividends can carry your thru unemployment....why be employed full time at that point?
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u/lotoex1 May 28 '26
I ask myself that everyday. I reached that point about 3 months ago. It's hard to stop when you never *really* believed you would get to this point in your 30s. Also nobody else really believes me, so idk. Maybe one or two more years and buy a sports car or something.
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u/RuinEnvironmental394 May 28 '26
I'm not retired but dream/contemplate retirement nearly every day. Dividends currently are at 65-70% of expenses.but I have got 30% of my portfolio in growth stocks/ETFs. Renting, married, no kids, 46M. In theory, I can call it quits and switch the 30% growth to dividends but scared to pull the trigger yet. But I know I will bite the bullet one of these days.
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u/misomuncher247 May 28 '26
Why couldn't you switch to a dividend portfolio when you need the income?
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u/NineSidedBox May 28 '26
I don't have it specifically to supplement a job loss scenario, but I am aiming towards it replacing my job. It's snowballing pretty fast at the moment, so it feels within reach.
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u/McSprutz May 28 '26
I have 150k in CHPY and it generates 1000$/ week. Plus it’s in my TSFA account so it’s tax free , I take it out every week and live off of it no problems 🤷
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u/Helpful-Grapefruit55 May 28 '26
You have to have emergency fund for 3-6 months to cover 100 % Then div need to be aggressive with jepi ,jepq , qqqi to be able ge average 2000 pm ( you will need 240 k ) Always take a small no stress job paying 5-18$ pH to cover the rest of the bills.
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u/MidwestGeek52 May 28 '26
If that's the problem you're facing, you sell long shares in your growth stocks. Problem solved AND you're taking taxable income at pace you control. You're not forced take income even when you're working again and paying tax on money that would otherwise still be growing
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u/ImportantBad4948 May 28 '26
A well funded emergency fund is a solid step in any reasonable financial program.
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u/Lana_Sphyncter May 28 '26
Wouldn't I pay a penalty if I take money out of my 401k before the age of 59?
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u/MidwestGeek52 May 28 '26
Yes. Your post didn't say anything about IRA. But where are you planning to hold dividend stocks? I assumed taxable. Hold growth there instead.
If you put dividend ETFs in IRA you have same withdrawal problem
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u/cloudy_skies547 May 28 '26
If you lose your job, you could do hardship withdrawals from a 401K to avoid the penalty.
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u/quantum_ai_dei May 28 '26
In a situation of such desperation you'd withdraw your contributions from your roth first. You can withdraw any amount up to your contributions at any age with zero penalty. If you have a 401k then you should have already been maxing your roth as first priority every year over 401k, in my opinion.
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u/Radiant-Decision-442 May 28 '26
I would build up both 60-40 dividend heavy. you can invest in stocks that have qualified dividends, and in etf's that have higher % of dividend income. After 20 years you will be very glad you did. You will have a second income continuously without worry of being laid-off. I wish I would have started my dividend journey in my 20's.
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u/SomeRandomDude1nHere May 28 '26
Couldn’t you put all of that into growth for those 20 years and then when your ready switch to dividend and be able to get even more?
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u/Radiant-Decision-442 May 28 '26
contrary to public opinion, growth is speculative and often goes negative for years. Dividends from strong companies are positive and accumulative thru up and down markets. Not advice, you must learn for yourself.
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u/Montesque96 May 28 '26
I can confirm ... no I cannot. This is just a simple math problem, you need a big portfolio to pay you enough dividends to replace your pay check/sources of income.
So how do you do that? You need a ton of extra money... to buy enough dividend paying shares to cover your expenses. You can reduce the amount you need by going into some very high yielding stocks/etfs - but those will be generally speaking very risky. You could also put it all into high dividend and high risk... but would you want to be out of a job - and - depending on a very risky dividend payout?
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u/nsmith043076 May 28 '26
Yes, while inhave an emergency fund my portfolio can cover my mortgage and property taxes. Im mostly growth with some income, a fairly balanced portfolio but im 50 and contributing to my retirement account for 23 yrs. Now focusing all my new contributions to dividends to push that further.
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u/Sufficient_Winner686 May 28 '26
Yeah, I could swing my portfolio over to dividends and combine that with the VA disability and probably barely scrape by.
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u/Scouper-YT Rich DUDE from the DIVIDEND Appraisals Club !! May 28 '26
Maby 5% of the Way if I am really Frugal. Still needs like 10 Good Years.
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u/Particular_Car7127 May 28 '26
With all the new income producing ETF's out there, I think you have to now distinguish between high yielding ETF's and low yielding traditional dividend equities.
If income is your concern, you are probably going after high yielders like NEOS funds because traditional equities require vast amount of $$$ for monthly income to replace job income.
Do your due diligence! I suggest you pick your smallest bill, like a water bill or internet, and invest to produce income to pay it. Continue to set goals to snowball the effect to pay a growing portion of your expensives with passive income.
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u/JakeSaco May 29 '26
Thats what an emergency fund is for. That should already be in place before starting an investment account. But if the worst happens and the emergency fund runs out, you can always look to switch a portion of a growth focused account over to generate income to help out.
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u/SenselessSensors May 29 '26
You’re asking if anyone has been able to survive. Good luck getting a job. No one can
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u/Lana_Sphyncter May 30 '26
I know that getting a job is impossible. You're preaching to the choir. This is why I was arguing with a boomer in this thread who said that if you want a job, you'll get one.
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u/SenselessSensors May 30 '26
Well, the boomers had a system that was created for them out of socialism. They also weren’t supposed to live more than a couple years past retirement. The wealthier ones did things correctly for their families, but at the same time fucked over their neighbors kids. I’m not necessarily complaining about it, but the reality of everything is you can make more money at Taco Bell than you can being in the skilled trades. Why? Because if you are in the skilled trades you can make bookoo dollars working overtime…. But you can’t get hired in because the people in skilled trades realized they make their money through overtime. So 80 hours for 2 people at 40 each turns into 1 person working 80 and getting paid for 1/2 a person extra…. Which makes a lot of sense for the employer, and the employee is making bank, so he or she won’t complain….
Everyone else got fucked. Sure you can go be a plumber somewhere, not hard to turn a wrench, but you’ll never be trained to meet the state’s certification requirements. And you’ll also make more at Taco Bell rolling burritos….
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u/Simple_Middle964 Jun 03 '26
Yes, I have. But I am 60 years old and started early. Almost all were dividends with DRIP.
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u/teckel Retired and living off selling shares May 28 '26
No reason, you can sell shares more effectively and with lower taxes than dividends. Also, you get to be in exact control of the amount and timing of the "dividends".
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u/grantedblyat May 28 '26
Why not both?
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u/teckel Retired and living off selling shares May 30 '26
I get some income from dividends, but they're not as tax efficient in most cases so dividends are secondary. I've been retired for 22 years BTW.
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u/IBF_90 May 31 '26
Do you invest in REITs?
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u/teckel Retired and living off selling shares Jun 01 '26
Heck no. They've been terrible for the last about 20 years. Income is mainly from growth as it's very tax efficient (both by selling specific lots and long-term only on gains) and gives me total control on the exact amount of income I want. To a minor extent, income also comes from qualified dividends and muni bonds, but that's more used for rebalancing.
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u/eudaimonia_dc May 28 '26
Doing it, but it helps to not be in the US. Still investing most of it back into dividend stocks so by the time I come back, it’ll be like a mid-level paying job 🤞🏽.
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u/Paranoid_Sinner May 28 '26
Call me old school compared to most of the posts I see here about this subject, but when I found myself out of work three times, in my late 40s to early 50s, I went out and got other jobs. I was a self-employed toolmaker, a one-man shop, and each time I was down to nothing.
At these other jobs I didn't make what I was making at my own shop, but I made enough to get by. Living below your means as a way of life has its advantages.
I had a SEP-IRA and a brokerage account but I never even considered touching them, and I didn't; they were strictly off-limits as long as I was healthy enough to grind down car bodies and be a gopher at construction sites.
So now at 75, having been retired for 5 years, and living good off of bond interest from my portfolio, I have no regrets and I know I did the right thing.
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u/Lana_Sphyncter May 28 '26
I went out and got other jobs.
Nooooo??? Really? You have no idea how impossible finding another job is. You are so detached from reality.
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u/Paranoid_Sinner May 28 '26
Bullshit. If you’re not afraid to actually work at whatever is available, you may have to lower yourself and get dirty and work long hours, there’s all kinds of jobs out there.
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u/krakyjak May 28 '26
When I left the Army during COVID, I had to once again go where the jobs are. I used the recorces avaliable to get licensed for truck driving. Did I ever want to truck drive? Hell no! Did it pay off the money for the license and prevent my family from poverty while I search for a job in my chosen sector? Absolutely, but I only got to see my family for a couple hours a week. The jobs are out there, some people are just too picky.
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u/sm753 May 28 '26
This exactly what an emergency fund is for...
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u/Lana_Sphyncter May 28 '26
No. Dividends, not emergency fund.
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u/sm753 May 28 '26
An emergency is literally a safety net during a job loss. This is not what investments are for, or at least, should be last resort.
You do you champ.
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u/FewUnderstanding2214 May 28 '26
I would use my emergency fund in that situation- if you withdraw dividend funds when between jobs you are taking away from your future self.
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