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

On account of their particular tax status, REITs should follow rigorous compliance standards and thus carry a certain excellent standard for the vehicles investment strategy and the real estate experience of the managing team.

There are two primary kinds 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 worth of these shares, resulting in a liquidity premium, or a cost that most investors pay for the ability to buy and sell the asset whenever they desire.

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 exchange is doing, irrespective 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, due to their possible double-digit 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 those fees.

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

Regardless 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 arises and working hard to eliminate any pre-existing biases. Take your time to figure out which strategy makes the most sense for you, and carefully compute your residual income goals.

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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's what we want life to look like We need to work backward from that point until we reach now, 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 liberty. .

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

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

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So, 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 perhaps dont have an age limitation into our 60s What guarantee do we have that we'll 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 tech places we could diversify. Who knows, perhaps you could begin 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 you currently doing one of these seven Dont be confused, not all businesses or investments are residual, in our own opinion.

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

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