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In 1960, Congress passed a law creating Real Estate Investment Trusts (REITs), large portfolios of income-producing real estate investments. A REIT is required by law to distribute 90 percent of its earnings to investors every year. Now, an estimated 70 million Americans invest in REITs.

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

There are two primary types of people 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 worth of the stocks, resulting in a liquidity premium, or a cost that most investors pay for the capability to buy and sell the asset whenever they wish.

Furthermore, 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, 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 are becoming popular, because of their potential double dividends. However, public non-traded REITs have recently come under heavy scrutiny due to the large upfront fees often charged to investorsand dubious practices around the disclosure of those fees.

In the past couple of years, pioneering new platforms like Fundrise have emerged. Fundrise intends to offer the benefits of personal market accessibility, but with reduced fees that potentially assist investors earn superior returns. Leveraging technology and new national regulations, Fundrise offers investors that the very first ever diversified commercial real estate investment portfolio accessible directly online to anyone in the United States, no matter their net worth.

Irrespective of which investment strategy you opt to pursue to earn residual income, an essential portion of the investment procedure is careful due diligence of each opportunity as it arises and working hard to eliminate any pre-existing biases. Take time to figure out which strategy makes the best sense for you, and carefully compute your residual income goals.

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When looking at income in the long run, shouldnt we're looking at what's going to happen and determine if 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 speak about residual income is thats the goal of retirement or what we like to call time liberty. .

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

Dividends and interest are a sort of residual income. Social Security certainly is, that the government takes money from us each paycheck and we get a small piece back when we retire (even though it's taxed in retirement again).

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So, if the goal is to get residual income when we retire, which appears 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 perhaps dont have an age limitation 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 origins of residual income, lets take a peek at other high-level places we can diversify. Who knows, perhaps you could start 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 those 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 . 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 webpage commission, wage, commission or wages.

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. .