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

On account of their particular tax status, REITs must follow strict compliance standards and therefore carry a certain quality standard for the vehicles investment plan and the property experience of the managing team.

There are two primary types of public REITs: traded and non-traded. Publicly-traded REITs give 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 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 correlated to broader market volatility, meaning that the share value may fluctuate depending on the way the stock market is doing, irrespective 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 popular, due to 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 questionable practices around the disclosure of those fees.

In the past few years, pioneering new programs like Fundrise have emerged. Fundrise intends to offer you the benefits of personal market accessibility, but with reduced prices that potentially assist investors earn better returns. Leveraging technology and new federal regulations, Fundrise offers investors 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 plan you decide to pursue to earn residual income, an essential part of the investment process is careful due diligence of every opportunity as it arises and working hard to eliminate any pre-existing biases. Take time to determine which approach makes the most sense for youpersonally, 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 if 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 speak about residual income is thats the aim of retirement or what we prefer to call time freedom. .

When you retire, your Social Security income and 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, 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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So, if the goal is to get residual income when we retire, that seems 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 begin investing in sources of residual income now that maybe dont have an age limit 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 sources of residual income, lets have a peek at other high tech places we can diversify. Who knows, perhaps 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 address crucial. Are you currently doing one of these seven Dont be confused, not all businesses or investments are residual, in our opinion.

Residual income has two actual definitions. Lets look at these . 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! So, we're going to use the first definition for the sake of the document. .