How Warren Buffett Uses This “Snowball” Dividend Stock Investing Strategy To Make Money

Would you like to know how Warren Buffett uses dividends to make money?

Per Forbes, his net worth is just under $90 billion. He built that net worth purely through investing. He eventually put himself in the position to buy entire businesses via the conglomerate holding company he controls, which is Berkshire Hathaway Inc.

While mere mortal investors like you and I generally don't have the opportunity to buy companies outright, owning even one share of a business makes you a partial owner of a business. And one share is the pathway to 10 shares, 100 shares, 1,000 shares and so on. Those shares, by the way, often entitle you to one of the best things about being a shareholder.

Dividends. And I'm going to show you how Warren Buffett uses dividends to make money, which can help you to make money with dividends. Warren Buffett owns a lot of Apple Inc. stock.

Apple (AAPL) is actually Buffett's largest position in the common stock portfolio he manages inside of Berkshire Hathaway (BRK-A; BRK-B) Warren Buffett dividend stocks include Apple. Berkshire Hathaway owns more than 944 million shares of Apple, as of the end of Q3 2020. That stake alone is worth over $129 billion, which is a significant chunk of the overall portfolio's value of $271 billion. Technically speaking, it's Berkshire Hathaway, not Buffett receiving these dividends. But since Buffett controls the company and their stock portfolio, and since he has 99% of his net worth tied up in Berkshire Hathaway stock, Buffett is synonymous with Berkshire Hathaway.

Just over $4.5 billion. That's how much the common stock portfolio within Berkshire Hathaway collected in dividends throughout 2019. And that $4.5 billion can be used to reinvest back into the portfolio, buying even more stock, which - you guessed it - will pay out even more dividends.

The businesses that Berkshire Hathaway buys stock in are usually increasing the amount of their dividends, year in and year out. Using Apple again, they've increased their dividend for the last nine consecutive years. Reinvesting growing dividends back into more growing dividends is a classic Buffett move.

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Disclaimer: Please consult with a licensed investment professional before investing any of your money. Never invest in a security or idea featured on this channel unless you can afford to lose ...

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