The point is to have your assets return 4% (or whatever you draw) in real terms. I.e., if inflation is 5%, you want your assets to return 9% (if you draw 4%). If you can't get 4% real return on average, you can't draw 4% forever, but maybe you can draw 3%. As for dividends, that can certainly be part of your return, but appreciation can be part too. Profitable rental income comes in by reducing how much you need your portfolio to throw off.