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In 1960, Congress passed a law creating Real Estate Investment Trusts (REITs), big 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.

Due to their special tax status, REITs must follow strict compliance standards and therefore carry a certain quality standard for the vehicles investment plan 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 liquidity, because it is traded openly on a stock exchange. However, this liquidity is very likely to be priced into the value of the shares, resulting in a liquidity premium, or a price that most investors pay for the ability to buy and sell the asset whenever they wish.

What's more, publicly-traded REITs tend to be connected to broader market volatility, meaning that the share value may fluctuate depending on the way 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 popular, because of their possible double-digit dividends. However, public non-traded REITs have recently come under heavy scrutiny because of the large upfront fees often charged to investorsand questionable practices around the disclosure of these fees.

In the last couple of decades, pioneering new programs such as Fundrise have emerged. Fundrise intends to offer you the benefits of personal market accessibility, but with reduced prices that potentially assist investors earn superior returns. Leveraging technology and new national regulations, Fundrise provides investors the very first ever diversified commercial property investment portfolio accessible directly online to anyone in the United States, no matter their net worth.

Regardless of which investment strategy you decide to pursue to earn residual income, an essential portion of the investment process is careful due diligence of each opportunity as it arises and working hard to eliminate any pre-existing biases. Take your time to determine which strategy makes the best sense for youpersonally, and carefully calculate your residual income goals.

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When looking at income in the long run, shouldnt we be looking at what's going to happen and determine whether 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 thats the aim of retirement or what we like to call time freedom. .

When you retire, your Social Security income plus pensions, if they are left, plus dividends and interest off of your investments and perhaps an income annuity will meet your needs and hopefully surpass them, so that you can walk away from the day job.

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

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Consequently, if the objective is to get residual income when we retire, that appears based on Social Security rules to only be possible in our 60s, and the government has mandated penalties prior to taking our money before 59.5, wouldnt it be prudent to begin investing in sources of residual income now that maybe 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 take a look at other high-level places we could diversify. Who knows, perhaps 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 indeed crucial. Are you currently doing one of these seven Dont be confused, not all businesses or investments are remaining, in our opinion.

Residual income has two actual definitions. Lets look at those . Residual Income is income that continues to be generated following the initial effort has been expended. Compare this to what the majority of people concentrate on earning: linear income, which is one-shot compensation or payment in the kind of a fee, wage, commission or wages.

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