Dividend investing isn’t bad. In fact, I still love dividends and I still own a lot of them. But my portfolio doesn’t look anything like it did when I was 22 or 23, and in this video I want to explain why.
📊 Track Your Portfolio →
📱 Start Investing on Robinhood →
📩 Free Newsletter →
If you’re in your 20s and trying to figure out whether dividend investing makes sense, this is the honest version. I break down why dividends are so appealing, why I built my portfolio around them early on, what they can and can’t realistically do with a smaller portfolio, and why my strategy changed as my income, rental cash flow, and investing goals evolved.
This is not an anti-dividend video. It’s a more honest conversation about when dividend investing actually makes sense, what role SCHD, VOO, and VTI play in my portfolio today, and why passive income is still the goal even if dividends aren’t always the best primary tool in the accumulation phase.
WHAT I COVER:
– Why dividends are emotionally powerful for beginners
– The real math behind dividend income in smaller portfolios
– Why your contribution rate matters more early on
– Why I shifted part of my portfolio toward VTI and VOO
– How rental income changed the job my stock portfolio needed to do
– Why dividends still matter to me today
CHAPTERS:
0:00 – This Is Not an Anti-Dividend Video
0:55 – Why Dividends Pull People In
2:47 – What Dividends Can and Can’t Do
4:54 – Why My Portfolio Changed
6:54 – What Your Portfolio Is Actually Supposed to Do
8:35 – What My Portfolio Looks Like Now
10:05 – What I’d Tell My 22-Year-Old Self
11:50 – The Real Question to Ask Yourself
FTC Disclosure: Some links above are affiliate links. I may earn a commission at no extra cost to you.
Is wage garnishment ever better than repayment for federal student loans?
This question is about wage garnishment for student loan debt.
Short answer: no. For nearly every federal student loan borrower, wage garnishment and the rest of the default collections process will cost more than the lowest-payment repayment plan they qualify for. There is one structurally interesting exception, but even that one comes with consequences that ruin any savings.
Still, the question gets asked — usually by borrowers who feel cornered, see a $0 IBR payment as suspicious, or assume default is “free” until collectors find them. Here is how the math actually works.
Would you like to save this?
We’ll email this article to you, so you can come back to it later!
What Student Loan Default Collections Actually Takes From You
Once a federal student loan defaults, the Department of Education has three main tools:
Administrative wage garnishment (AWG): up to 15% of disposable pay, after a protected amount equal to 30 times the federal minimum wage per week (roughly $290/week).
Treasury Offset Program: seizes federal tax refunds, certain federal benefits, and (for many borrowers) state tax refunds.
Social Security offset: up to 15% of benefits, with a $750/month protected floor. This restarted under current Treasury enforcement after a pause.
Federal salary offset can also apply to government employees.
Collection fees also ran as high as 20% of the balance, and interest continues to accrue. The result is that the money that is “taken” from you rarely makes it towards your student loan balance. You effectively get into a “death spiral” of having money taken for no benefit – or even a growing loan balance.
If a borrower has no W-2 wages, no tax refund, no Social Security check, and no federal paycheck, default collections can technically take $0 in a given year. That is where the “is default cheaper?” question starts.
What Student Loan Repayment Costs
The two relevant comparison points right now are RAP (the new Repayment Assistance Plan) and IBR.
RAP has a $10/month minimum payment regardless of income. It scales up to 10% of AGI at higher incomes, and because it is AGI-based, it captures self-employment income, rental income, capital gains, and K-1 distributions.
IBR calculates payments off discretionary income (AGI minus 150% of the federal poverty line). If discretionary income is zero or negative, the payment is $0. Otherwise it is 10% or 15% of discretionary income depending on the borrower’s IBR cohort.
For low-income borrowers, IBR can produce a genuine $0 monthly payment with no minimum floor. but generally, 10% of your AGI or discretionary income will be less than the 15% taken from you during AWG along with your tax refund offsets.
When Default Math “Looks Better” But Really Isn’t
There are a few cases where the raw monthly cost of default is lower than RAP:
A borrower with no garnishable wages and no tax refund. AWG = $0. Treasury Offset = $0. RAP still wants $10/month. IBR is at $0. But in this case, a $0 IBR is better than garnishment.
A borrower whose W-2 disposable pay sits under the 30x minimum wage protection. AWG cannot touch it. RAP still wants $10/month. IBR is $0. Again, $0 IBR is better.
A self-employed borrower who manages estimated taxes precisely. No refund to seize, no W-2 to garnish. Default takes very little. However, if the government gets wind of this, there are still other methods like levying your bank accounts.
The Actual Wage Garnishment Isn’t The Only Concern
Cash flow (or reduced cash flow due to AWG) is not the only cost. Default carries:
Collection fees (up to 20%) and interest capitalization.
Loss of all forgiveness credit – time in default doesn’t count for PSLF or time-based loan forgiveness.
Credit damage that raises the price of renting, car loans, car insurance, utility deposits, and even bank account approval.
Loss of access to further federal student aid.
Professional license risk in some states.
Treasury Offset reaching items borrowers forget about such as state refunds, certain federal benefits.
Current enforcement is also more aggressive than the pre-2020 baseline. Social Security offsets are back.
The key to remember that your entire financial life is more expensive as the result of the default. So while you may not think about the AWG, you will face higher costs elsewhere as well.
Bottom Line
In pure monthly cash flow terms, default can look cheaper for borrowers with no garnishable wages and no tax refunds. Once collection costs and fees, lost time to loan forgiveness, and the price of damaged credit get added in, IBR at $0 wins the low-income scenario, and RAP or IBR beats default for anyone with meaningful AGI.
Default is not a repayment strategy. It is a costly penalty box.
Laurentian Bank reported a second-quarter loss tied to restructuring and transaction costs, while its residential mortgage portfolio continued to decline as the bank prepares to exit retail and SME banking.
With a record-setting IPO in just a few weeks, SpaceX saw its rival in a contest to put astronauts on the lunar surface go up in flames, reinforcing its dominance in the space race and its primacy in NASA’s plans to go back to the moon.
On Thursday, a New Glenn rocket belonging to Jeff Bezos’ Blue Origin exploded during an engine-firing test at the launch pad in Cape Canaveral, ahead of a satellite launch scheduled for next week.
Blue Origin also planned to use the rocket to launch landers to the moon for NASA, delivering payloads and astronauts to the surface. SpaceX is jockeying to be selected by NASA for the lunar mission too, and may emerge as the only remaining option to meet an ambitious schedule.
The vulnerability highlights the multiple steps—and contractors—a lunar landing would entail. While NASA successfully sent astronauts around the moon last month in a Lockheed Martin Orion capsule launched by Boeing’s massive Space Launch System rocket, landing on the moon’s surface requires a separate spacecraft.
Next year, NASA plans to send astronauts into Earth orbit via the Orion and Space Launch System as part of its Artemis III mission. While in orbit, NASA expected to dock the Orion with either SpaceX’s lunar lander, a variant of the Starship, and/or Blue Origin’s lander, the Blue Moon.
But the New Glenn is supposed to launch the Blue Moon into space, and the rocket is now grounded as the cause of the explosion is investigated. Just days before the explosion, NASA awarded Blue Origin launch contracts, including one this fall for a Blue Moon lander mission to put NASA payloads on the surface.
A Blue Origin New Glenn rocket explodes during an engine-firing test on Thursday, May 28, 2026, in Cape Canaveral, Fla.
@JConcilus via AP
“Blue Origin’s inability to launch Blue Moon anytime soon is likely to put the company out of the running for Artemis III,” wrote Wendy Whitman Cobb, a professor at the U.S. Air Force School of Advanced Air and Space Studies, in the Conversation on Friday. “This setback means that Artemis III, and NASA’s entire lunar exploration program, is likely to be dependent on SpaceX for the time being.”
Meanwhile, SpaceX is still developing the Starship. While a next-generation version of the giant rocket completed a test flight this month that was largely successful, more work needs to be done to produce a lunar-lander variant.
Whitman Cobb warned that if SpaceX can’t get Starship ready in time, then NASA may need to delay the Artemis III orbital-docking test by a year to 2028—meaning the Artemis IV mission to put astronauts on the moon will miss its 2028 timeline.
Further delays could also open the door again to Blue Origin, if it can get the New Glenn back on track soon and test out its lunar lander.
But a mishap highlighting NASA’s reliance on SpaceX could not come at a better time for CEO Elon Musk, whose company is expected to go public on June 12 in what will likely be the largest IPO ever. SpaceX is seeking to raise up to $75 billion at a valuation of $1.75 trillion or more.
Since its founding in 2002, SpaceX has taken over the market. It claimed more than 80% of global rocket launches last year and has over 10,000 Starlink satellites in orbit, providing space-based internet connections to businesses and militaries.
In addition to serving NASA, SpaceX is a top launch provider for the Pentagon, which is also looking to the company to help develop President Donald Trump’s “Golden Dome” missile-defense shield.
“It’s a truly unique business with the deepest moat that exists today,” an investor told the Financial Times recently.
Starlink is SpaceX’s cash cow as the satellite business more than doubled its profit last year to $4.4 billion. Blue Origin has plans to compete in that arena as well by building out its constellation of Leo satellites. But the New Glenn explosion, which also damaged Blue Origin’s launchpad, has set that back as well.
Walter Isaacson, an author and an advisory partner at Perella Weinberg, pointed out that the New Glenn accident not only puts Blue Origin behind SpaceX in the lunar mission but further behind its rival in the satellite business.
“SpaceX is way ahead, and the loss of this launchpad on during this test means that it’s going to be harder for Blue Origin to catch up in the next two or three years with low-Earth-orbit communication satellites,” he told CNBC on Friday.
In his First Annual Message delivered to Congress on December 3, 1861, Lincoln declared, “labor is prior to and independent of capital,” adding that capital is only the “fruit of labor”.8 In this speech, where he uses the word “labor” thirty-one times, Lincoln argues for maintaining a moral foundation for business operations in which human labor, creativity, and dignity are the dominant factors over capital, profits, and efficiency.
That perspective resonates amid modern debates over AI and automation. While some business leaders predict widespread job displacement, Lincoln viewed labor as central to human purpose and self-worth. Innovation, in his view, should expand opportunity rather than reduce people to expendable inputs. Rather than viewing labor as merely a means to an end whose sole purpose is the generation of financial profit, Lincoln considered labor an essential element in defining one’s purpose in life, a core foundation of one’s own human dignity. 9
In today’s AI paradigm, Lincoln’s message remains as relevant as ever. Some of the nation’s most prominent business leaders predict that AI will eventually eliminate all human work10 and the largest corporations plan to invest in automation at the expense of human labor and welfare.11 A recent report suggests algorithmic scheduling systems in retail and logistics tend to prioritize speed and profit at the expense of employee stability and well-being.12
By contrast, AI-powered education platforms that allow workers to retrain and advance into roles with higher skills echo Lincoln’s belief that labor should be elevated rather than replaced.13 Lincoln’s belief that innovation should elevate rather than replace human work suggests he would support that latter and reject the former— used solely to maximize profits by displacing labor.
Chick-fil-A is bringing back its popular Cow Appreciation Day on July 14, 2026. Customers who visit participating locations dressed in cow-themed attire can score a free entrée, reviving one of the chain’s most beloved promotions.
The event originally launched in 2005 and became famous for rewarding guests who showed up in everything from full cow costumes to simple cow-print outfits. Chick-fil-A confirmed the return as part of its 80th anniversary celebration.
Offer Details
Bring your whole herd in-restaurant on July 14 from 7:00 a.m. to 7:00 p.m. to help celebrate Cow Appreciation Day®. Every customer who dresses like a cow can receive one free entrée from the following list, subject to availability:
Breakfast: Chick-fil-A® Chicken Biscuit (Original) or 4-count Chick-n-Minis®.
Lunch/Dinner: Chick-fil-A® Chicken Sandwich (Original or Spicy); 8-count Nuggets (Original or Grilled); or 3-count Chick-n-Strips.
Kids: A 5-count Nuggets Kids’ Meal (Original or Grilled), which includes a side, drink, and premium.
Guru’s Wrap-up
Time to dig that cow costume out of the closet, or something way simpler should work as well. Mark your calendars!
