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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 each year. Now, an estimated 70 million Americans invest in REITs.

On account of their special tax status, REITs should 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 key types of public REITs: traded and non-traded. Publicly-traded REITs give the benefits of liquidity, since it's traded openly on a stock exchange. But this liquidity is very likely to be priced into the value of these shares, resulting in a liquidity premium, or a price that most investors pay for the ability to get and sell the asset whenever they wish.

What's more, publicly-traded REITs tend to be correlated to broader market volatility, meaning that the share value may fluctuate depending on how the stock exchange is doing, regardless of whether or not anything has changed with the underlying properties owned by the REIT. .

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On the other hand, public non-traded REITs have become popular, due to their potential double dividends. However, public non-traded REITs have recently come under heavy scrutiny due to the large upfront fees often charged to investorsand dubious practices around the disclosure of these fees.

In the last couple of decades, pioneering new programs like Fundrise have emerged. Fundrise aims to offer the benefits of private market access, but with lower prices that potentially assist investors earn better returns. Leveraging technology and new federal regulations, Fundrise provides investors that 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 strategy you opt to pursue to earn residual income, an essential portion of the investment procedure is careful due diligence of every opportunity as it arises and working hard to eliminate any pre-existing biases. Take time to determine 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's going to happen and determine if that is what we want life to seem like We need to work backward from this point until we achieve 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 like to call time freedom. .

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

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

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So, if the goal 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 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.

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

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

Residual income has two real definitions. Lets look at those first. Residual Income is income that continues to be generated following the initial effort has been expended. Compare this to what most men and women concentrate on earning: linear income, that can be one-shot compensation or payment in the kind of a fee, wage, commission or salary.

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