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

Due to their special tax status, REITs must follow rigorous 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 offer the benefits of liquidity, since it's traded openly on a stock exchange. But this liquidity is very likely to be priced into the value of the stocks, resulting in a liquidity premium, or a cost that all investors pay for the ability to buy and sell the asset whenever they wish.

What's more, publicly-traded REITs tend to be connected to wider market volatility, meaning that the share value may fluctuate depending on how the stock market 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, due to their possible double-digit 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 last few decades, pioneering new platforms like Fundrise have emerged. Fundrise intends to offer the benefits of personal market access, but with reduced fees that potentially assist investors earn better returns. Leveraging technology and new national regulations, Fundrise provides investors that the first ever diversified commercial real estate investment portfolio available right online to anyone in the United States, no matter their net worth.

Regardless of which investment strategy you decide to pursue to earn residual income, an essential part of the investment procedure is careful due diligence of every opportunity as it arises and working hard to remove any pre-existing biases. Take your time to determine which strategy makes the most sense for you, and carefully compute your residual income goals.

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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 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 thats the goal of retirement or what we like to call time liberty. .

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

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Consequently, if the goal get more 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 begin 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 sources of residual income, lets have 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 inventory of where you are at is indeed crucial. Are see post you currently doing one of these seven Dont be confused, not all businesses or investments are residual, in our opinion.

Earning income has two real definitions. Lets look at those first. Residual Income is income which continues to be generated after the initial effort has been expended. Compare this to what most people concentrate on earning: linear income, which is 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. .