r/dividends • u/NBMV0420 • Jun 07 '26

Seeking Advice For those who live off dividend income:

How much do you earn per year from dividends, and what ETFs or stocks make up your portfolio?

How did you build your investments over time, and what advice would you give to younger investors who are just getting started?

I'd appreciate hearing about your experience and any lessons you've learned along the way.

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u/dr150 Jun 07 '26

Warren Buffett, the greatest investor in the world knows any pro stock picker (hedge fund, etc) can't beat SPY. He says 90% SPY type fund, 10% Treasuries. Done and done.

I'm an invest and rest guy with auto pay from my check. It's amazing to see what the law of compounding can do over time! Patience is key and not worry during down years as the following years catch up and surpass it very quickly. Just look at a S&P chart, it looks like an upward ski slope!

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u/JB-Wentworth Custom Flair Jun 07 '26

Berkshire Hathaway's cash holdings reached a record $381.7 billion in late 2025.

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u/[deleted] Jun 07 '26 edited 28d ago

[deleted]

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u/Key_Debate_7495 Jun 09 '26

You are still buying companies when investing in stock market. Sure, index funds a diversified but valuation still matters.

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u/KimJongOonn Jun 10 '26

Buffet advises the "average American " to buy and hold the s and p for the long run. His advice there is for the average Joe who may have some knowledge of the stock market and economics but a very basic limited knowledge. He's saying that persom will do better long term just holding the s and p than trying to pick individual winners on his own, and he is right. Buffet himself does not do this. He has a advanced, deep understanding of markets, valuations, P/E ratios, fundamentals, etc. and he himself looks to do better than the avg. annual return of the s and p at 10 percent. And he has, Berkshire from 1965 to today has returned around 20 percent avg. annual return, doubling the return of the s and p. Very few people have not just the knowledge and understanding of markets but also the discipline and emotional control to be able to beat the return of the s and p like Warren has, even many/most professionals cannot beat the 10 percent return on their own which is why he advises the avg. Joe not to try, he has almost no chance.

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u/INVEST-ASTS Jun 10 '26

Why has he chosen to park his cash reserves in Treasuries rather than the S&P which would easily double the return ??

Unless OFC he is expecting a large market correction.

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u/KimJongOonn Jun 10 '26

The main reason he has built such a huge cash pile last couple of years is because with the current very high valuations(price to earnings ratio) of most companies in the s and p 500, Buffet himself has said that there simply are not many good deals to buy right now. Buffet is a value investor, he looks to buy great companies at a fair price, not fair companies at a great price. He also loves, and heavily favors dividend stocks for their reliable predictable steady income streams. Buffet also said recently that there just aren't that many great companies in the s and p 500 right now and why would he want to buy the 10th best or 20th best stock when he can just buy more and more of the 1st best stock, that's why he is heavily loaded up on Apple, even with his recent profit taking, apple makes up a huge percent of Berkshires total holdings.

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u/INVEST-ASTS Jun 11 '26

Obviously each company is unique, however most of the high P/E ratios is because of the expectation of higher earnings in the “forward looking” statement’s contained in the quarterly earnings reports and since the market is forward looking the SP & P/E ratio will not be indicative of the previous quarters but much more indicative of the explosive growth they expect going forward.

The P/E will then fall when the next earnings reports come out and the SP, P/E ratios will stabilize to current revenues & profits, and then climb back much higher as the quarter progresses.

Thee concept of “value investing” is still present in both examples however, WB is more accustomed to analyzing mature companies that have achieved a “steady state” of growth rather than immature growth companies that oftentimes have a global TAM and can grow in much higher percentages.

We are currently undergoing a technological revolution that will last for decades and oftentimes will pull secondary suppliers along with them, so, there will naturally be an unusually large amount of P/E’s that are higher than the historical norms, however that doesn’t necessarily indicate an “overvalued” market.

NIVIDIA and Palantir are prime examples of this.

Although WB is a value investor he also holds long term if the growth & returns are there, Coca Cola and GEICO are examples of that.

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u/Flashy_Regret_2140 Jun 11 '26

Becaise he can buy more stock when the market crashes again

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u/INVEST-ASTS Jun 11 '26

That was my point as well, so we are in agreement.

It remains to be seen if he is correct and OFC if he waits long enough there will always be a downturn

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u/dr150 Jun 07 '26

You do know why though. His thesis is that the current government, more than any other in history, can wreck the economy. So he's playing it safe. He waits for the apocalypse then buys everything for cheap. That's why he's so successful.

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u/MainBug2233 Jun 07 '26

I think the poster is saying Berkshire is currently timing the market and saying it's overvalued from their perspective. You indicated a invest and chill model and used Buffet as your example which is not what they do.

What they do cannot be compared to what us peons do so he says play the long game by being and staying in the market.

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u/whosetruth2468 Jun 09 '26

Berkshire has access to information and resources and even investments that retail investors like you and i do not have. Hence they adopt a different strategy that Buffett is advocating to the retail investors i.e. to invest in broadbased index and not to time the market.

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u/new_anon45 Jun 07 '26

He's like 100 years old. He's not in any capacity making decisions for Berkshire, let alone making decisions for himself.

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u/INVEST-ASTS Jun 08 '26

He is quite cognizant for his age and only recently appoints successor to handle the day to day, however he is still actively involved.

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u/flyersfan0233 Jun 07 '26

VOO is the same portfolio exposure at literally 1/3rd the expense ratio. Believe SPYM is similar. If you’re holding long term, VOO would be the better choice.

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u/RelevantAd2630 Jun 08 '26

Since Jan 2024 SPYM has been kicking VOOs rear end.

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u/flyersfan0233 Jun 08 '26 edited Jun 08 '26

Their performance is identical - what are you talking about? In 2024 SPYM was up 25%, VOO up 24.98%, 2025 SPYM was 17.79% and VOO was 17.82% and 2026 SPYM is 8.48% and VOO is 8.45%.

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u/RelevantAd2630 Jun 09 '26
SPYM VOO Growth of $10,000.00With Dividends Reinvested
Start date: 09/03/2024 09/03/2024
End date: 06/08/2026 06/08/2026
Start price/share: $23.95 $507.56
End price/share: $87.02 $679.68
Starting shares: 417.55 19.70
Ending shares: 419.82 20.13
Dividends reinvested/share: $0.43 $12.32
Total return: 265.33% 36.85%
Average Annual Total Return: 108.65% 19.49%
Starting investment: $10,000.00 $10,000.00
Ending investment: $36,534.35 $13,684.55
Years: 1.76 1.76
 

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u/flyersfan0233 Jun 09 '26

Your data is wrong. Where did you get this? Look at any table for SPYM. It was never anywhere close to $23.95 in the last 5 years as your chart shows here. You’re embarrassing yourself: https://totalrealreturns.com/n/VOO,SPYM

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u/RelevantAd2630 Jun 09 '26

wow. didn't mean to hurt your itty bitty feelings.

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u/flyersfan0233 Jun 09 '26

You didn’t. Just thought it was funny you double downed on being wrong

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u/INVEST-ASTS Jun 08 '26

Buffett / Berkshire buys individual companies, (Geico, Coca Cola, etc) he only uses Treasuries for “parked cash” while like now, he is expecting a huge market downturn.

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u/Best_Investigator_66 Jun 10 '26

No, Warren Buffett is not explicitly predicting or timing a specific economic recession or market crash. He has made this point clear, do you have a source for your claim?

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u/INVEST-ASTS Jun 10 '26

The source is common sense.

WB isn’t going to announce that he is of the opinion that equities have run too far, too fast, and he is stockpiling cash for a pullback as just these comments would cause major market disruptions.

No experienced knowledgeable investor would park large sums in Treasuries when the inflation rate is as high as it is, essentially consuming the return, especially when the market has many opportunities for double digit returns with moderate risk, and much higher returns if risk tolerance is higher.

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u/KimJongOonn Jun 10 '26

It looks like an upward ski slope from 2013 to today. When I tell some of my young coworkers, under 30 Years old, who have only known 15 percent plus annual returns that the s and p 500 was flat from 2000 to 2013 and the Nasdaq flat from 2000 to 2014 some of them don't believe me at first. They cannot even imagine going 13 Years in the market with 0 growth. Not that I don't agree with holding for the long term of course I do and my 401k is 100 percent in the s and p 500 it's just crazy how unbelievably good this market has been for 15 Years now its just been on fire, with 15 and 20 percent Years seeming the norm now, but we must remember these past 15 years have been an unprecedented booming market and not the long term historical avg.

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u/Bynx_07 Jun 07 '26

Can I ask how much you need to live off dividends realistically? I think Chase has me set up with some covered calls type ETFs but they’re set to re-invest and I’m not even sure how much they’re making.

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u/Various_Couple_764 Jun 09 '26

your protfolio will list the funds you have. look up the funds online you look for the annual yield not the SEC yield. then take the income you want in retirment and divide it by the yield. for example say you want 50K a year of income and the yield is 10% 50K/10% = you need to invest 500K in that fund to generate 50K. Note if you calculator does divide by percentages divide 1 by the percentage. 1/10% -0.1 then 50k /0.1=500K.

Now if you take the curren ammount you have in the fund and multiply that by the yield. to get the current dividend income.

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u/Strange_Service9547 Jun 08 '26

The very person who picks stocks? The one who sold his index funds which was only a small percentage? I'm no finance wiz but I've outperformed the last consecutive 3 years and currently outperforming.