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In 1960, Congress passed a law creating Real Estate Investment Trusts (REITs), big portfolios of income-producing property 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 must follow strict 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 key 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. However, this liquidity is likely to be priced into the worth of these stocks, resulting in a liquidity premium, or a cost that most investors pay for the capability to buy and sell the advantage 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 market is doing, regardless 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 questionable practices around the disclosure of these fees.

In the last few years, pioneering new platforms like Fundrise have emerged. Fundrise intends to offer you the benefits of personal market accessibility, but with lower fees 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 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 portion of the investment process is careful due diligence of each opportunity as it arises and working hard to eliminate any pre-existing biases. Take time to determine which strategy makes the best sense for youpersonally, and carefully calculate your residual income objectives.

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When looking at income in the future, shouldnt we be looking at what's going to happen and determine whether that's what we want life to look like We need to work backward from this point until we reach 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 prefer to call time liberty. .

When you retire, your Social Security income plus pensions, if they're left, plus dividends and interest from your investments and perhaps an income annuity will fulfill your needs and hopefully exceed them, and that means that you can walk away from the 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 get a little piece back when we retire (even though it is taxed in retirement again).

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Consequently, if the objective is to have residual income when we retire, which seems based on Social Security rules to only be possible in our 60s, and the government has mandated penalties prior to taking our money webpage before 59.5, wouldnt it be prudent to begin 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.

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, maybe 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 these seven Dont be confused, not all businesses or investments are residual, in our own opinion.

Earning income has two actual definitions. Lets look at these first. Residual Income is income that continues to be generated after the initial effort has been expended. Compare this to what the majority of men and women concentrate on earning: linear income, which is one-shot compensation or payment in the form of a fee, wage, commission or wages.

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