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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% of its earnings to investors every year. Now, 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 both the vehicles investment strategy and the property experience of the managing team.

There are two primary types of public REITs: traded and non-traded. Publicly-traded REITs offer the benefits of liquidity, because it is traded openly on a stock exchange. However, this liquidity is very likely to be priced into the value of the shares, resulting in a liquidity premium, or a cost that all investors pay for the ability to get and sell the asset 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 are becoming popular, because of their potential double dividends. However, 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 programs like Fundrise have emerged. Fundrise intends to offer you the benefits of private market access, but with lower prices that potentially help investors earn superior returns. Leveraging technology and new federal regulations, Fundrise provides investors the first ever diversified commercial property investment portfolio accessible directly 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 procedure is careful due diligence of every opportunity as it appears and working hard to eliminate any pre-existing biases. Take time to determine which approach makes the most sense for youpersonally, and carefully calculate your residual income goals.

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Find out what's happening in Building Residual Income Meetup groups around the globe 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 whether that is what we want life to look 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 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 are left, and dividends and interest from your investments and maybe an income annuity will fulfill your needs and hopefully surpass them, and that means that you can walk away from your 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 receive a small useful reference piece back when we retire (even though it's taxed in retirement again).

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So, if the objective 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 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.

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, maybe you could begin generating residual income now and step into that time independence sooner than your 60s.

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Taking stock of where you're at is indeed 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 real definitions. Lets look at those first. Residual Income is income that continues to be generated following the initial effort has been expended. Compare this to what the majority of men and women concentrate on earning: linear income, that is one-shot compensation or payment read this post here in the form of a fee, wage, commission or salary.

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