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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 percent of its earnings to investors each year. Now, an estimated 70 million Americans invest in REITs.

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

There are two key kinds of public REITs: traded and non-traded. Publicly-traded REITs offer the benefits of money, since it's traded openly on a stock exchange. But this liquidity is very likely to be priced into the value of the shares, resulting in a liquidity premium, or a cost that all investors pay for the ability to get and sell the advantage 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 how the stock exchange 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 more popular, due to 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 these fees.

In the past couple of years, pioneering new platforms such as Fundrise have emerged. Fundrise intends to offer you the benefits of private market accessibility, but with lower fees that potentially assist investors earn superior returns. Leveraging technology and new federal regulations, Fundrise offers investors the very 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 decide to pursue to earn residual income, an essential part of the investment process is careful due diligence of every opportunity as it appears and working hard to eliminate any pre-existing biases. Take time to determine which strategy makes the most sense for you, and carefully calculate your residual income goals.

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When looking at income in the long run, shouldnt we're looking at what is 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 reach now, viewing our decisions with money as the pre-cursor of tomorrow The reason we even speak about residual income is the goal of retirement or what we prefer to call time liberty. .

When Read More Here you retire, your Social Security income plus pensions, if they are left, and dividends and interest off of go your investments and maybe an income annuity will meet your needs and hopefully exceed 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 each paycheck and we get a little piece back when we retire (even though it's taxed in retirement again).

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Consequently, if the objective is to have residual income when we retire, which 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 maybe dont have an age limitation into our 60s What guarantee do we have that we'll 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 look at other high tech places we can 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 stock of where you are at is so 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 first. Residual Income is income that continues to be generated following the initial effort has been expended. Compare this to what most men and women focus on earning: linear income, that is one-shot compensation or payment in the form of a commission, wage, commission or salary.

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