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In 1960, Congress passed a law creating Real Estate Investment Trusts (REITs), large portfolios of income-producing real estate 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 rigorous compliance standards and therefore carry a certain quality standard for both 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 money, because it is traded openly on a stock exchange. But this liquidity is very likely to be priced into the worth of these stocks, 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 market 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 have become popular, due to their potential double dividends. However, public non-traded REITs have recently come under heavy scrutiny because of the large upfront fees often charged to investorsand dubious practices around the disclosure of these fees.

In the past couple of years, pioneering new programs like Fundrise have emerged. Fundrise intends to offer you the benefits of private market access, but with lower fees that potentially assist investors earn better returns. Leveraging technology and new national regulations, Fundrise offers investors that the first ever diversified commercial property investment portfolio accessible 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 part of the investment process is careful due diligence of each opportunity as it arises and working hard to eliminate any pre-existing biases. Take time to determine which strategy makes the best sense for you, and carefully compute 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 look like We need to work backward from this point until we achieve 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 freedom. .

When you retire, your Social Security income and 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 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 receive a little piece back when we retire (even though it is taxed in retirement again).

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Consequently, 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 sources of residual income now that perhaps dont have an age limit 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 origins of residual income, lets take a look at other high tech places we could 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 inventory of where you're 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.

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

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