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

Due to their particular tax status, REITs should follow rigorous compliance standards and thus carry a certain quality standard for both the vehicles investment strategy and the property experience of the managing team.

There are two primary types 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 stocks, resulting in a liquidity premium, or a price that all investors pay for the ability to get and sell the asset whenever they desire.

Furthermore, 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, 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 are becoming more popular, because of 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 few decades, pioneering new programs like Fundrise have emerged. Fundrise aims to offer the benefits of personal market access, but with reduced prices that potentially assist investors earn superior returns. Leveraging technology and new federal regulations, Fundrise offers investors that 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 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 figure out which strategy 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're looking at what is 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 reach today, viewing our decisions with money as the pre-cursor of tomorrow The reason we even speak about residual income is thats the aim of retirement or what we prefer to call time freedom. .

When you retire, your Social Security income and pensions, if they're left, and dividends and interest off of your investments and perhaps an income annuity will fulfill your needs and hopefully surpass them, so you can walk check my site 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 every paycheck and we receive a little piece back when we retire (even though it is taxed in retirement again).

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So, if the objective 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 sources of residual income now that perhaps dont have an age limitation into our 60s What guarantee do we have that we will make it that long.

Additionally, what control do we really have over Social Security and our 401Ks Looking at the sources of residual income, lets have 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 those seven Dont be confused, not all businesses or investments are residual, in our own opinion.

Earning income has two real 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 the majority of men and women focus on earning: linear income, that is one-shot compensation or payment in the kind of a commission, wage, commission or wages.

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