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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 percent of its earnings to investors every year. Today, an estimated 70 million Americans invest in REITs.

On account of their particular tax status, REITs should follow strict compliance standards and therefore carry a certain quality standard for the vehicles investment strategy and the property experience of the managing team.

There are two key kinds of people REITs: traded and non-traded. Publicly-traded REITs offer the benefits of liquidity, since it's traded openly on a stock exchange. However, this liquidity is very likely to be priced into the worth of the shares, resulting in a liquidity premium, or a price that all investors pay for the ability to get and sell the advantage whenever they wish.

Furthermore, publicly-traded REITs tend to be connected to broader market volatility, meaning that the share value may fluctuate depending on the way 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 are becoming more popular, because of their potential double dividends. But, 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 those fees.

In the last few years, pioneering new platforms such as Fundrise have emerged. Fundrise aims to offer you the benefits of private market access, but with lower prices that potentially assist investors earn better 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.

Irrespective of which investment strategy you decide to pursue to earn residual income, an essential part of the investment process is careful due diligence of each opportunity as it appears and working hard to remove any pre-existing biases. Take your time to figure out which strategy makes the most sense for youpersonally, and carefully compute your residual income goals.

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When looking at income in the future, shouldnt we be looking at what is going to happen and determine whether that is what we want life to look 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 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 from your investments and maybe an income annuity will my company fulfill your needs and hopefully exceed them, and that means you can walk away from your day job.

Dividends and interest are a form of residual income. Social Security certainly is, that 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 objective is to have 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 maybe dont have an age limitation 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 origins of residual income, lets have a peek at other high-level places we can diversify. Who knows, maybe 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 indeed crucial. Are learn this here now 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 those . Residual Income is income which continues to be generated following the initial effort has been expended. Compare this to what the majority of men and women focus on earning: linear income, that is one-shot compensation or payment in the form of a fee, wage, commission or wages.

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