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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 each year. Now, an estimated 70 million Americans invest in REITs.

On account of their special tax status, REITs should follow strict compliance standards and therefore carry a certain quality standard for both the vehicles investment strategy and the real estate experience of the managing team.

There are two key kinds of public REITs: traded and non-traded. Publicly-traded REITs give the benefits of money, since it's traded openly on a stock exchange. However, this liquidity is likely to be priced into the value of these stocks, resulting in a liquidity premium, or a price that all investors pay for the capability to buy and sell the asset whenever they wish.

What's more, publicly-traded REITs tend to be correlated to wider 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 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 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 questionable practices around the disclosure of those fees.

In the past couple of decades, pioneering new platforms like Fundrise have emerged. Fundrise aims to offer the benefits of personal market access, but with reduced prices that potentially help investors earn better returns. Leveraging technology and new federal regulations, Fundrise provides 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 strategy you decide to pursue to earn residual income, an essential part of the investment process is careful due diligence of every opportunity as it arises and working hard to remove any pre-existing biases. Take time to determine which strategy makes the best sense for you, and carefully calculate your residual income objectives.

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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's 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 thats the goal of retirement or what we like to call time liberty. .

When you retire, your Social Security income plus pensions, if they are left, and dividends and interest off of your investments and perhaps home an income annuity will fulfill your needs and hopefully surpass 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's taxed in retirement again).

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Consequently, 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 limit into our 60s What guarantee do we have that we'll make it that long.

Additionally, 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 tech places we could 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 are at is indeed crucial. Are you currently doing one of these seven Dont be confused, not all Check This Out businesses or investments are residual, in our own opinion.

Residual income has two real definitions. Lets look at these first. Residual Income is income which continues to be generated following the initial effort has been expended. Compare this to what the majority of people concentrate on earning: linear income, which can be one-shot compensation or payment in the form of a commission, wage, commission or wages.

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