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In 1960, Congress passed a law creating Real Estate Investment Trusts (REITs), large portfolios of income-producing property 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.

Due to their particular tax status, REITs must follow strict compliance standards and thus carry a certain excellent standard for the vehicles investment strategy and the real estate experience of the managing team.

There are two primary types of public REITs: traded and non-traded. Publicly-traded REITs offer 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 the shares, resulting in a liquidity premium, or a price that most investors pay for the capability to buy and sell the asset whenever they wish.

Furthermore, publicly-traded REITs tend to be connected to wider market volatility, meaning that the share value may fluctuate depending on the way 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 due to 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 such as Fundrise have emerged. Fundrise intends to offer the benefits of private market access, but with lower prices that potentially help investors earn superior returns. Leveraging technology and new national regulations, Fundrise provides investors that the first ever diversified commercial property 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 every opportunity as it appears and working hard to remove any pre-existing biases. Take time to figure out 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're looking at what's going to happen and determine whether that is what we want life to look like We need to work backward from that point until we achieve now, viewing our decisions with money as the pre-cursor of tomorrow The reason we even speak about residual income is the goal of retirement or what we like to call time freedom. .

When you retire, your Social Security income and pensions, if they are left, plus dividends and interest off of your investments and perhaps an income annuity will fulfill your needs and hopefully surpass 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 every paycheck and we get a small piece back when we retire (even though it is taxed in retirement again).

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So, if the objective 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 before taking our money before 59.5, wouldnt it be prudent to start investing in resources of residual income now that maybe 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, perhaps 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're at is indeed 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 real definitions. Lets look at those . Residual Income is income that continues to be generated following the initial effort has been expended. Compare this to what the majority of people focus on earning: linear income, that can be one-shot compensation or payment in the kind of try this site a fee, wage, commission or salary.

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