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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.
Due to their particular tax status, REITs should follow strict compliance standards and thus carry a certain excellent standard for both the vehicles investment strategy and the property experience of the managing team.
Furthermore, publicly-traded REITs tend to be correlated 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 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. However, public non-traded REITs have recently come under heavy scrutiny because of the large upfront fees often charged to investorsand questionable practices around the disclosure of these fees.
In the past couple of decades, pioneering new platforms like Fundrise have emerged. Fundrise intends to offer the benefits of personal market accessibility, but with lower prices that potentially help investors earn better returns. Leveraging technology and new national regulations, Fundrise offers investors that the very first ever diversified commercial real estate investment portfolio available right online to anyone in the United States, no matter their net worth.
Irrespective of which investment strategy you opt 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 time to determine which strategy makes the most sense for you, and carefully calculate 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'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 the aim of retirement or what we like to call time freedom. .
When you retire, your Social Security income and pensions, if they are left, and discover this dividends and interest off of your investments and maybe an income annuity will fulfill your needs and hopefully exceed them, and that means you can walk away from the day job.
Dividends and interest are a form of residual income. Social Security certainly is, the government takes money from us every paycheck and we receive a little piece back when we retire (even though it is taxed in retirement again).
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So, if the goal is to get 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 prior to 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 limitation into our 60s What guarantee do we have that we'll make it long.
Additionally, what control do we really have over Social Security and our 401Ks Looking at the sources of residual income, lets take a peek at other high-level places we can 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 own opinion.
Residual income has two real definitions. Lets look at these first. Residual Income is income which continues to be generated after the initial effort has been expended. Compare this to what most people focus on earning: linear income, which can be one-shot compensation or payment in the form of a commission, wage, commission or salary.
We believe that income which exceeds your expenses is named PROFIT! Thus, we are going to use the first definition for the sake of the document. .