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

Due to 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 real estate experience of the managing team.

There are two key types of public 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 likely to be priced into the value 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 desire.

Furthermore, 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 all the underlying properties owned by the REIT. .

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On the other hand, public non-traded REITs have become popular, because of their possible double-digit dividends. But, 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 those fees.

In the last few years, pioneering new platforms such as Fundrise have emerged. Fundrise aims to offer you the benefits of personal market accessibility, but with reduced prices that potentially assist investors earn superior returns. Leveraging technology and new national regulations, Fundrise offers investors the first ever diversified commercial real estate investment portfolio available 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 portion of the investment procedure 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 strategy makes the best sense for youpersonally, and carefully compute your residual income objectives.

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When looking at income in the long run, shouldnt we be looking at what is going to happen and determine if that's what we want life to seem 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 thats the aim of retirement or what we prefer to call time freedom. .

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

Dividends and interest are a sort of residual income. Social Security certainly is, the government takes money from us each paycheck and we receive a small 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 seems 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 will make it long.

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

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

Residual income has two real definitions. Lets look at these first. Residual Income is income which continues to be generated following the initial effort has been expended. Compare this to what the majority of men find more information and women focus on earning: linear income, which can be 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're going to use the first definition for the sake of this document. .