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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% of its earnings to investors every year. Today, an estimated 70 million Americans invest in REITs.

On account of their particular 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 primary kinds of public REITs: traded and non-traded. Publicly-traded REITs offer the benefits of liquidity, 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 wish.

Furthermore, publicly-traded REITs tend to be connected to broader market volatility, meaning that the share value may fluctuate depending on how 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 have become popular, because of their potential double dividends. But, 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 last few years, pioneering new platforms such as Fundrise have emerged. Fundrise intends to offer you the benefits of personal market accessibility, but with reduced prices that potentially help investors earn better returns. Leveraging technology and new national regulations, Fundrise offers investors that the very first ever diversified commercial property investment portfolio available directly online to anyone in the United States, no matter their net worth.

Regardless of which investment strategy you opt to pursue to earn residual income, an essential portion of the investment procedure is careful due diligence of every opportunity as it appears and working hard to eliminate any pre-existing biases. Take your 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 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 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 thats the goal 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 off of your investments and perhaps an income annuity will meet your needs and hopefully surpass them, and that means you can walk away from More hints the 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 get 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 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 before 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 limit into our 60s What guarantee do we have that we'll make it that long.

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

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

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