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Russian (RU) Thu, Sep 11, 2025, 12:30 PM 5 min read
According to the Bloomberg Billionaires Index, legendary investor Warren Buffett is worth about $151 billion [1]. However, in a 2019 interview with Yahoo Finance [2], the Oracle of Omaha said he could live comfortably on much less. In fact, he estimated that he could live well even if he didn’t have 99.99% of his wealth.
“If I were retired and I had a $1,000,000 portfolio of stocks paying me $30,000 a year in dividends, my children were grown, and the house was paid off, I wouldn't worry too much about having a lot of cash around,” he told Yahoo Finance's Editor-in-Chief Andy Serwer.
In other words, the billionaire could live like a millionaire provided his portfolio generated at least 3% in steady and reliable dividend income. Unfortunately, a 3% or higher yield is looking increasingly rare in 2025.
If you’re trying to replicate Buffett’s dividend-focused approach, here’s what you need to know.
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Buffett’s quote comes with a number of assumptions — such as having no mortgage, grown children and a portfolio reliably producing dividends. Those conditions may not reflect the financial reality for many Americans, which makes it harder to apply his scenario to the average household.
And even if it did apply to your situation, you probably haven’t seen a lucrative dividend yield in several years. The S&P 500 currently offers an approximate 1.2% dividend yield [3] and the yield has been below 3% since the 2008 financial crisis.
Even the Vanguard High Dividend Yield ETF (VYM) currently offers an approximate 2.5% dividend yield [4].
The decline in average yields is a long-term trend, according to Deutsche Bank's strategist Jim Reid. His analysis indicates that companies have been moving to buybacks instead of dividends for decades while the market has become more dominated by high-growth technology firms that prefer to reinvest much of their cash rather than give shareholders dividends.
Put simply, if you’re a passive investor you probably can’t reach Buffett’s preferred yield of 3%. However, if you’re willing to diversify into other asset classes or pick specific stocks, you could surpass this threshold.
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