Elon Musk was shocked to see Warren Buffett’s Coca-Cola dividends in 2023 — and they've since grown even larger to $776M

Tesla CEO Elon Musk is no stranger to eye-popping sums of money. After all, he currently holds the title of the world’s wealthiest person with a staggering net worth of $285 billion.

But even for Musk, some financial figures are enough to raise an eyebrow.

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Back in 2023, reports surfaced that Berkshire Hathaway, the investment empire of legendary investor Warren Buffett, earned $704 million in dividends from its Coca-Cola (KO) holdings in one year. Upon hearing the news, Musk couldn’t resist commenting on X, “Berkshire Hathaway high on Coke.”

That figure was calculated based on Berkshire’s 400 million shares in Coca-Cola and the 44 cents per share that Coca-Cola paid out in quarterly dividends in 2022.

Fast forward to today, and that dividend payout has climbed even higher. According to Berkshire’s latest 13F filing, the company still holds 400 million shares in Coca-Cola.

With Coca-Cola raising its quarterly dividend to 48.5 cents per share in 2024, Berkshire now stands to collect an impressive $776 million in dividend income this year alone.

Buffett’s Coca-Cola investment has become a remarkable source of passive income — and there are ways for you to build your own. Here are three strategies to get started on your path to generating passive income.

Dividend stocks

Investing in the stock market has never been more accessible, allowing everyday investors to create passive income streams through dividend-paying stocks — just like Warren Buffett.

Companies that consistently pay dividends enable investors to earn income without having to sell their shares. High-quality companies like Coca-Cola can even increase these dividends over time, amplifying the income stream.

There are companies that consistently pay out dividends to shareholders, allowing investors to earn income regularly without selling their shares. And with high-quality companies like Coca-Cola, that income stream can also increase over time.

Buffett highlighted the power of this approach in his 2022 letter to shareholders, where he wrote, “The cash dividend we received from Coke in 1994 was $75 million. By 2022, the dividend had increased to $704 million. Growth occurred every year, just as certain as birthdays.”

Indeed, Coca-Cola has raised its dividend every year for the past 62 years, demonstrating a strong commitment to shareholders.

However, keep in mind that past performance isn’t a guarantee of future results. When buying a dividend stock, don’t just focus on its payout or yield. Take the time to understand the company’s business fundamentals, and if you’re following Buffett’s lead, look for companies with durable competitive advantages.

Read more: Rich, young Americans are ditching the stormy stock market — here are the alternative assets they’re banking on instead

Real estate

Real estate is another popular option since well-chosen properties can provide investors with a steady stream of rental income. It is also considered a reliable hedge against inflation, with property values and rental income often rising alongside the cost of living.

While the prospect of collecting monthly rent checks sounds appealing, being a landlord does have its challenges. Property ownership involves ongoing responsibilities like handling maintenance issues — from fixing leaking faucets to managing major repairs — as well as dealing with tenant-related concerns, which can sometimes be time-consuming and unpredictable.

Home prices have also surged in recent years. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index has climbed by over 50% in the past five years, reflecting the sharp rise in housing costs. Combined with elevated mortgage rates, buying a property can be financially challenging for many.

But these days, you don’t need to be a landlord to start investing in real estate. There are plenty of real estate investment trusts (REITs), as well as crowdfunding platforms that allow you to earn rental income without becoming a landlord.

High yield savings accounts

High yield savings accounts offer a low risk way to generate passive income while keeping your funds accessible. These accounts typically offer much higher interest rates than traditional savings accounts, allowing your money to grow without needing to lock it away in long-term investments. This option is ideal for those who want a secure, liquid source of passive income with minimal effort or risk.

These days, some banks and financial institutions are offering high yield savings accounts that pay upwards of 5%.

In the U.S., most savings accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor, per insured bank. This insurance provides protection to depositors in the event that the bank fails, ensuring that their funds are safe and accessible.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.