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

On account of their particular tax status, REITs should follow rigorous compliance standards and therefore carry a certain quality standard for both the vehicles investment strategy and the real estate experience of the managing team.

There are two key kinds of people REITs: traded and non-traded. Publicly-traded REITs give the benefits of liquidity, because it is traded openly on a stock exchange. However, this liquidity is very likely to be priced into the worth of these stocks, resulting in a liquidity premium, or a cost that most 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 broader market volatility, meaning that the share value may fluctuate depending on how the stock market 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 have become more popular, due to their potential double dividends. But, public non-traded REITs have recently come under heavy scrutiny because of the large upfront fees often charged to investorsand dubious practices around the disclosure of those fees.

In the last couple of years, pioneering new programs like Fundrise have emerged. Fundrise intends to offer the benefits of private market access, but with reduced fees that potentially help investors earn superior returns. Leveraging technology and new federal 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 plan you opt to pursue to earn residual income, an essential part of the investment process is careful due diligence of each opportunity as it arises and working hard to remove any pre-existing biases. Take time to figure out which approach makes the most sense for youpersonally, and carefully compute your residual income objectives.

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When looking at income in the long run, shouldnt we be looking at read what he said what is going review to happen and determine whether that's what we want life to seem like We need to work backward from this point until we reach now, viewing our decisions with money as the pre-cursor of tomorrow The reason we even talk about residual income is thats the aim of retirement or what we like to call time liberty. .

When you retire, your Social Security income and pensions, if they are left, plus dividends and interest off of your investments and maybe an income annuity will fulfill your needs and hopefully exceed them, so 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's taxed in retirement again).

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So, if the goal is to have 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 before 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 will make it long.

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

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Taking stock of where you are at is so 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 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 most men and women concentrate on earning: linear income, that can be one-shot compensation or payment in the kind of a commission, wage, commission or wages.

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