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The 4% rule is a retirement strategy that suggests withdrawing 4% of your portfolio annually, assuming a balanced investment strategy, typically between stocks and bonds. It stems from historical data indicating that this withdrawal rate has generally allowed retirees to maintain their lifestyle over decades without running out of money.
On the other hand, dividend investing focuses on acquiring shares in companies that regularly pay dividends. The appeal here lies in the steady income these dividends provide, enabling investors to live off their investments without depleting their principal. This strategy can be particularly attractive for those prioritizing stability and income generation.