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In 1960, Congress passed a law creating Real Estate Investment Trusts (REITs), big 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.
Due to their particular tax status, REITs should follow rigorous compliance standards and therefore carry a certain excellent standard for both the vehicles investment strategy and the real estate experience of the managing team.
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 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 dubious practices around the disclosure of those fees.
In the last few decades, pioneering new programs such as Fundrise have emerged. Fundrise aims to offer you the benefits of personal market accessibility, but with reduced fees that potentially assist investors earn better returns. Leveraging technology and new national regulations, Fundrise offers investors the very first ever diversified commercial property investment portfolio accessible 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 each opportunity as it appears and working hard to remove any pre-existing biases. Take your time to determine which strategy makes the best sense for you, and carefully compute your residual income goals.
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When looking at income in the long run, shouldnt we be looking at what's going to happen and determine if that is what we want life to seem like We need to work backward from that 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 the goal of retirement or what we prefer to call time Continued freedom. .
When you retire, your Social Security income plus pensions, if they are left, plus dividends and interest from your investments and maybe an income annuity will meet your needs and hopefully exceed them, and that means that you can walk away from the day job.
Dividends and interest are a form of residual income. Social Security certainly is, the government address takes money from us each 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 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 prior to 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 limitation 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 from this source of residual income, lets take a peek at other high tech places we can 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 own opinion.
Residual income has two real definitions. Lets look at those . Residual Income is income that continues to be generated following the initial effort has been expended. Compare this to what most people focus on earning: linear income, that can be one-shot compensation or payment in the kind of a commission, wage, commission or wages.
We believe that income which exceeds your expenses is named PROFIT! So, we are going to use the first definition for the sake of the document. .