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

On account of their special tax status, REITs should follow rigorous compliance standards and thus carry a certain excellent standard for the vehicles investment plan 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 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 price that all investors pay for the capability to buy and sell the advantage whenever they wish.

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 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 have become popular, because of their possible double-digit 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 such as Fundrise have emerged. Fundrise aims to offer the benefits of private market accessibility, but with reduced fees that potentially assist investors earn superior returns. Leveraging technology and new national regulations, Fundrise provides investors the first ever diversified commercial real estate investment portfolio accessible directly online to anyone in the United States, no matter their net worth.

Regardless of which investment plan you opt 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 your time to figure out which approach makes the most sense for you, and carefully compute your residual income goals.

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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 is what we want life to look like We need to work backward from that point until we achieve today, 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 like to call time liberty. .

When you retire, your Social Security income plus pensions, if they're left, and dividends and interest off of your investments and perhaps an income annuity will click for info fulfill your needs and hopefully exceed them, so you can walk away from your 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 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 before taking our money before 59.5, see page wouldnt it be prudent to start investing in sources of residual income now that maybe dont have an age limit 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 have a peek at other high-level places we could 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 so 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 real definitions. Lets look at those . Residual Income is income which continues to be generated following the initial effort has been expended. Compare this to what the majority of men and women focus on earning: linear income, that can be one-shot compensation or payment in the form of a commission, wage, commission or salary.

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