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

On account of their special tax status, REITs must follow rigorous compliance standards and therefore carry a certain excellent 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 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 these shares, resulting in a liquidity premium, or a cost that all investors pay for the ability to get and sell the advantage whenever they desire.

What's more, publicly-traded REITs tend to be correlated to wider 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 are becoming more popular, because of their potential double 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 few decades, pioneering new platforms such as Fundrise have emerged. Fundrise aims to offer the benefits of personal market accessibility, but with lower prices that potentially assist investors earn superior returns. Leveraging technology and new national regulations, Fundrise provides investors that the very first ever diversified commercial property investment portfolio accessible right online to anyone in the United States, no matter their net worth.

Irrespective of which investment plan you decide to pursue to earn residual income, an essential portion of the here investment procedure is careful due diligence of each opportunity as it arises and working hard to eliminate any pre-existing biases. Take time to determine which approach makes the best sense for you, and carefully calculate 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 whether that's what we want life to look like We need to work backward from this point until we achieve today, viewing our decisions with money as the pre-cursor of tomorrow The reason we even speak 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're left, plus dividends and interest off of your investments and maybe an income annuity will meet your needs and hopefully exceed them, so that you can walk away from your day job.

Dividends and interest are a sort of residual income. Social Security certainly is, that the government takes money from us each 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 goal is to have 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.

Furthermore, what control do we really have over Social Security and our 401Ks Looking at the origins of residual income, lets take a peek at other high tech places we could diversify. Who knows, maybe you could begin generating residual income now and step into that time freedom sooner than your 60s.

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

Residual income has two actual definitions. Lets look at those . Residual Income is income that continues to be generated after 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 fee, wage, commission or salary.

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