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

Due to their particular tax status, REITs must follow strict compliance standards and therefore carry a certain quality standard for both the vehicles investment strategy and the real estate experience of the managing team.

There are two primary types of people REITs: traded and non-traded. Publicly-traded REITs give the benefits of money, because it is traded openly on a stock exchange. However, this liquidity is very likely to be priced into the worth of the stocks, resulting in a liquidity premium, or a price that most investors pay for the capability to buy and sell the asset whenever they desire.

What's more, publicly-traded REITs tend to be correlated to wider market volatility, meaning that the share value may fluctuate depending on the way the stock market is doing, regardless 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. 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 those fees.

In the last few years, pioneering new programs like Fundrise have emerged. Fundrise intends to offer the benefits of private market access, but with lower prices that potentially help investors earn superior returns. Leveraging technology and new federal regulations, Fundrise provides investors the very first ever diversified commercial real estate investment portfolio available right online to anyone in the United States, no matter their net worth.

Irrespective of which investment plan you opt to pursue to earn residual income, an essential portion of the investment procedure is careful due diligence of every opportunity as it appears and working hard to remove any pre-existing biases. Take your time to figure out which strategy 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 be 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 aim of retirement or what we prefer to call time liberty. .

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

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

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So, if the goal is to get residual income when we retire, which appears based on Social Security rules to only be possible in our dig this 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 perhaps dont have an age limitation into our 60s What guarantee do we have that we'll make it long.

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

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Taking inventory 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 residual, in our opinion.

Earning income has two actual definitions. Lets look at these first. Residual Income is income which continues to be generated following the initial effort has been expended. Compare this to what most men and women focus 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 that exceeds your expenses is called PROFIT! Thus, we are going to use the first definition for the sake of this document. .