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In 1960, Congress passed a law creating Real Estate Investment Trusts (REITs), large portfolios of income-producing real estate investments. A REIT is required by law to distribute 90 percent of its earnings to investors each year. Now, an estimated 70 million Americans invest in REITs.

On account of their special tax status, REITs must follow strict compliance standards and therefore carry a certain excellent standard for 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 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 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 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 are becoming more popular, due to their possible double-digit 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 these fees.

In the past couple of years, pioneering new platforms like Fundrise have emerged. Fundrise intends to offer you the benefits of private market access, but with reduced prices that potentially help investors earn superior returns. Leveraging technology and new federal regulations, Fundrise offers 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 portion of the investment process is careful due diligence of each opportunity as it appears he has a good point and working hard to remove any pre-existing biases. Take your time to figure out which approach makes the best 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 start meeting up with the ones near you.

When looking at income in the future, shouldnt we're looking at what is 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 now, viewing our decisions with money as the pre-cursor of tomorrow The reason we even speak about residual income is the aim 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 perhaps an income annuity will meet your needs and hopefully surpass them, so that you can walk away her response from 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 receive a small piece back when we retire (even though it's taxed in retirement again).

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Consequently, if the goal is to get 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 prior to taking our money before 59.5, wouldnt it be prudent to begin investing in sources of residual income now that perhaps dont have an age limitation into our 60s What guarantee do we have that we will make it that long.

Additionally, 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-level places we could 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 inventory of where you're 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.

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

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