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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. Today, an estimated 70 million Americans invest in REITs.

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

There are two key kinds of public REITs: traded and non-traded. Publicly-traded REITs give the benefits of money, since it's traded openly on a stock exchange. But this liquidity is likely to be priced into the worth of these stocks, resulting in a liquidity premium, or a price that most investors pay for the capability 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 the way the stock market 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 possible double-digit dividends. But, public non-traded REITs have recently come under heavy scrutiny due to the large upfront fees often charged to investorsand questionable practices around the disclosure of those fees.

In the last few years, pioneering new platforms such as Fundrise have emerged. Fundrise intends to offer the benefits of private market accessibility, but with lower prices that potentially assist investors earn superior returns. Leveraging technology and new national regulations, Fundrise provides investors that 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 opt to pursue to earn residual income, an essential portion of the investment process is careful due diligence of every opportunity as it appears and working hard to remove any pre-existing biases. Take time to figure out which approach makes the most sense for youpersonally, and carefully compute your residual income goals.

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When looking at income in the long run, 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 that 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 aim of retirement or what we like to call time liberty. .

When you retire, your Social Security income plus pensions, if they are left, plus dividends and interest off of your investments and get redirected here maybe an income annuity will fulfill your needs and hopefully exceed them, and that means 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 each paycheck and we get a little piece back when we retire (even though it is taxed in retirement again).

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So, if the objective is to get residual income when we retire, that seems 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 start 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 best site it that long.

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

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Taking inventory of where you're at is indeed crucial. Are you currently doing one of those seven Dont be confused, not all businesses or investments are residual, in our opinion.

Residual income has two actual 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 the majority of men and women focus on earning: linear income, which can be one-shot compensation or payment in the kind of a commission, wage, commission or salary.

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