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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.

Due to their special tax status, REITs should follow rigorous 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 key types of people REITs: traded and non-traded. Publicly-traded REITs give the benefits of money, since it's traded openly on a stock exchange. But this liquidity is very likely to be priced into the worth of these stocks, resulting in a liquidity premium, or a price that most investors pay for the capability to get and sell the asset whenever they wish.

Furthermore, publicly-traded REITs tend to be correlated 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 all 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 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 couple of decades, pioneering new platforms such as 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 federal regulations, Fundrise provides investors that the very first ever diversified commercial real estate investment portfolio accessible 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 portion of the investment procedure is careful due diligence of each opportunity as it appears and working hard to eliminate any pre-existing biases. Take your time to figure out which approach makes the most sense for you, and carefully calculate your residual income objectives.

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Find out what's happening in Building Residual Income Meetup bands around the world and get started meeting up with the ones near you.

When looking at income in the long run, shouldnt we're looking at what is going to happen and determine if that's what we click for more want life to seem like We need to work backward from this point until we achieve today, 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 plus pensions, if they're left, plus dividends and interest off of your investments and maybe an income annuity will fulfill your needs and hopefully exceed them, so you can walk away from the day job.

Dividends and interest are a sort of residual income. Social Security certainly is, that the government takes money from us each 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, 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 maybe dont have an find more age limit into our 60s What guarantee do we have that we will 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 take a look at other high-level places we could diversify. Who knows, maybe you could start generating residual income now and step into that time freedom sooner than your 60s.

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Taking inventory of where you are at is so crucial. Are you currently doing one of those seven Dont be confused, not all businesses or investments are residual, in our opinion.

Earning income has two real definitions. Lets look at those . Residual Income is income which continues to be generated following the initial effort has been expended. Compare this to what most men and women concentrate on earning: linear income, that is one-shot compensation or payment in the kind of a commission, wage, commission or salary.

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