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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. Today, 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 excellent standard for the vehicles investment strategy and the property experience of the managing team.

There are two key types of people 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 shares, resulting in a liquidity premium, or a cost that most investors pay for the ability to buy 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 market 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, 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 dubious practices around the disclosure of these fees.

In the past couple of years, pioneering new programs like Fundrise have emerged. Fundrise aims to offer the benefits of personal market access, but with lower prices that potentially help investors earn better returns. Leveraging technology and new national regulations, Fundrise offers investors the very first ever diversified commercial real estate investment portfolio accessible right online to anyone in the United States, no matter their net worth.

Regardless of which investment plan you decide to pursue to earn residual income, an essential portion of the investment process is careful due diligence of each opportunity as it arises and working hard to remove 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 long run, shouldnt we're looking at what's going to happen and determine if that is what we want life to seem like We need to work backward from that point until we reach 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 plus pensions, if they are left, plus dividends and interest from your investments and maybe an income annuity will meet your needs and hopefully surpass them, and that means you can walk away from your day job.

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

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Consequently, 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 before 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 that long.

Additionally, what control do we really have over Social Security check my reference and our 401Ks Looking at the sources of residual income, lets have a look at other high-level places we can diversify. Who knows, perhaps you could begin generating residual income now and step into that time independence sooner than your 60s.

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Taking stock of where you're at is indeed crucial. Are you currently doing one of these seven Dont be confused, not all businesses or investments are remaining, in our opinion.

Earning income has two real definitions. Lets look at those first. Residual Income is income which continues to be generated following the initial effort has been expended. Compare this to what most men and women focus on earning: linear income, that can be one-shot compensation or payment in the kind of a commission, wage, commission or salary.

We think that income that exceeds your expenses is named PROFIT! like this So, we're going to description use the first definition for the sake of the document. .