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In 1960, Congress passed a law creating Real Estate Investment Trusts (REITs), large portfolios of income-producing real estate investments. A REIT is required by law to distribute 90 percent of its earnings to investors every year. Now, an estimated 70 million Americans invest in REITs.

On account of their special tax status, REITs must follow rigorous compliance standards and thus carry a certain quality standard for the vehicles investment strategy and the property experience of the managing team.

There are two primary types of public REITs: traded and non-traded. Publicly-traded REITs give the benefits of money, since it's traded openly on a stock exchange. But this liquidity is likely to be priced into the value of the stocks, resulting in a liquidity premium, or a cost that most investors pay for the ability to buy and sell the asset whenever they desire.

Furthermore, publicly-traded REITs tend to be connected to wider market volatility, meaning that the share value may fluctuate depending on how the stock market is doing, irrespective of whether or not anything has changed with all the underlying properties owned by the REIT. .

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On the other hand, public non-traded REITs have become more popular, because of their possible double-digit dividends. But, public non-traded REITs have recently come under heavy scrutiny due to the large upfront fees often charged to investorsand questionable practices around the disclosure of those fees.

In the past couple of decades, pioneering new programs such as Fundrise have emerged. Fundrise aims to offer the benefits of private market access, but with lower fees that potentially help investors earn better returns. Leveraging technology and new federal regulations, Fundrise offers investors the very first ever diversified commercial property investment portfolio accessible right online to anyone in the United States, no matter their net worth.

Regardless of which investment strategy you opt to pursue to earn residual income, an essential portion of the investment procedure is careful due diligence of each opportunity as it appears and working hard to eliminate any pre-existing biases. Take time to figure out which approach makes the best sense for youpersonally, and carefully compute your residual income objectives.

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When looking at income in the future, shouldnt we're looking at what is going to happen and determine if that's what we want life to seem like We need to work backward from that point until we reach today, viewing our decisions with money as the pre-cursor of tomorrow The reason we even talk about residual income is the goal of retirement or what we prefer to call time freedom. .

When you retire, your Social Security income and pensions, if they're left, and you could check here dividends and interest from your investments and maybe an income annuity will meet your needs and hopefully surpass them, and that means that you can walk away from the day job.

Dividends and interest are a sort of residual income. Social Security certainly is, the government takes money from us each paycheck and we receive a little piece back when we retire (even though it's taxed in retirement again).

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Consequently, if the goal is to get residual income when we retire, which appears based on Social Security rules to only be possible in our 60s, and the government has mandated penalties before taking our money before 59.5, wouldnt it be prudent to begin investing in resources of residual income now that perhaps dont have an age limit into our 60s What guarantee do we have that we will make it that long.

Furthermore, what control do we really have over Social Security and our 401Ks Looking at the sources of residual income, lets have a peek at other high-level places we could diversify. Who knows, maybe you could start generating residual income now and step into that time independence sooner than your 60s.

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Taking stock of where you are at is so crucial. Are you currently doing one of those seven Dont be confused, not all businesses or investments are residual, in our opinion.

Earning income has two actual definitions. Lets look at these . Residual Income is income that continues to be generated after the initial effort has been expended. Compare this to what most people focus on earning: linear income, which is one-shot compensation or payment in the form of a commission, wage, commission or salary.

We think that income that exceeds your expenses is named PROFIT! Thus, we are going to use the first definition for the sake of the document. .