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In 1960, Congress passed a law creating Real Estate Investment Trusts (REITs), big portfolios of income-producing real estate 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 should follow rigorous compliance standards and therefore carry a certain quality standard for the vehicles investment plan and the real estate experience of the managing team.

There are two primary kinds of people REITs: traded and non-traded. Publicly-traded REITs give the benefits of liquidity, because it is traded openly on a stock exchange. However, this liquidity is very likely to be priced into the worth of the stocks, resulting in a liquidity premium, or a cost that most investors pay for the ability to buy and sell the advantage whenever they desire.

What's more, publicly-traded REITs tend to be correlated to wider market volatility, meaning that the share value may fluctuate depending on the way the stock exchange is doing, irrespective 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 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 dubious practices around the disclosure of these fees.

In the last few decades, pioneering new platforms like Fundrise have emerged. Fundrise intends to offer the benefits of private market access, but with reduced prices that potentially assist investors earn better returns. Leveraging technology and new national regulations, Fundrise offers investors the first ever diversified commercial real estate investment portfolio available directly 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 procedure is careful due diligence of every opportunity as it appears and working hard to remove any pre-existing biases. Take your time to determine which strategy makes the most sense for you, 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 whether that is what we want life to look like We need to work backward from that 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 aim of retirement or what we prefer to call time freedom. .

When you retire, your Social Security income plus pensions, if they are left, and dividends and interest off of your investments and perhaps an income annuity will fulfill your needs and hopefully exceed 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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Consequently, if the objective is to have residual income when we retire, that appears based on Social Security rules to only be visit here 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 maybe dont have an age limitation 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 sources of residual income, lets take a look at other high-level places we can diversify. Who knows, perhaps you could start generating residual income now and step into that time independence sooner than your 60s.

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Taking stock 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 remaining, in our own opinion.

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

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