If you’ve been hanging around financial independence forums, you might have noticed two competing approaches to financial independence.
The first advocates accumulative a large portfolio of shares and sell those shares as income during retirement. And the second — known as the Thornhill Method — advocates accumulating a growing dividend stream and living off dividend income during retirement.
You may have noticed that there is a growing number of people advocating the Thornhill Method. It makes sense. The approach is quite intuitive and easy to understand, and seemingly overcomes challenges with the original approach to financial independence (e.g. sequence of returns risk).
However, there hasn’t really been a serious, objective analysis of the Thornhill Method and its implications for retirement. It’s a big topic, so in this first post we’ll take a deep dive into dividends to compare dividend income and selling shares for retirement income.