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

On account of their special tax status, REITs must follow rigorous compliance standards and therefore carry a certain quality standard for the vehicles investment strategy 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 money, because it is 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 price that most investors pay for the ability to buy and sell the asset whenever they wish.

What's more, publicly-traded REITs tend to be connected 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 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 because of the large upfront fees often charged to investorsand questionable practices around the disclosure of these fees.

In the past couple of decades, pioneering new platforms like Fundrise have emerged. Fundrise intends to offer you the benefits of personal market accessibility, but with lower prices that potentially assist investors earn better returns. Leveraging technology and new federal regulations, Fundrise provides investors the 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 plan you decide 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 eliminate any pre-existing biases. Take time to figure out which approach makes the best sense for you, and carefully calculate your residual income objectives.

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When looking at income in the future, shouldnt we be looking at what's going to happen and determine whether that's what we want life to seem 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 speak about residual income is the aim 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 from your investments and maybe an income annuity will meet your needs and hopefully surpass them, so you can walk away from your day job.

Dividends and interest are a form of residual income. Social Security certainly is, the government takes money from us every paycheck and we receive 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, 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 begin investing in sources of residual income now that perhaps dont have an age limitation into our 60s What guarantee do we have that we'll make it long.

Furthermore, what control do we really have over Social Security and our 401Ks Looking at the origins of residual income, lets take a look at other high-level places we could diversify. Who knows, perhaps 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're at is so crucial. Are you currently doing one of these seven Dont be confused, not all businesses or investments are residual, in our opinion.

Earning income has two real definitions. see post Lets look at useful reference these . Residual Income is income which continues to be generated after 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 kind of a fee, wage, commission or wages.

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