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

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

There are two primary kinds of people REITs: traded and non-traded. Publicly-traded REITs give the benefits of money, since it's 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 all investors pay for the ability to buy and sell the asset whenever they wish.

Furthermore, publicly-traded REITs tend to be connected to broader market volatility, meaning that the share value may fluctuate depending on how 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 because of the large upfront fees often charged to investorsand questionable practices around the disclosure of these fees.

In the last few years, pioneering new platforms such as Fundrise have emerged. Fundrise intends to offer you the benefits of private market access, but with reduced prices that potentially help investors earn better returns. Leveraging technology and new national regulations, Fundrise offers investors the first ever diversified commercial property investment portfolio available 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 portion of the investment process is careful due diligence of each opportunity as it appears and working hard to remove any his explanation pre-existing biases. Take your time to determine which strategy makes the best sense for youpersonally, and carefully compute your residual income goals.

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When looking at income in the future, shouldnt we website here 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 prefer to call time freedom. .

When you retire, your Social Security income and pensions, if they are left, and dividends and interest off of 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 receive 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 have 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 before 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 it long.

Furthermore, what control do we really have over Social Security and our 401Ks Looking at the sources of residual income, lets have a peek at other high-level places we could diversify. Who knows, perhaps you could begin 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 so 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 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 the majority of men and women focus on earning: linear income, which is one-shot compensation or payment in the form of a fee, wage, commission or salary.

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