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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. Today, an estimated 70 million Americans invest in REITs.
On account of their particular tax status, REITs must follow rigorous compliance standards and thus carry a certain excellent standard for the vehicles investment plan and the real estate experience of the managing team.
Furthermore, publicly-traded REITs tend to be connected to broader market volatility, meaning that the share value may fluctuate depending on how the stock exchange 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 more popular, because of 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 those fees.
In the past couple of decades, pioneering new platforms such as Fundrise have emerged. Fundrise intends to offer you the benefits of private market access, but with reduced fees that potentially help investors earn superior returns. Leveraging technology and new national regulations, Fundrise offers investors that the 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 every opportunity as it arises and working hard to remove any pre-existing biases. Take time to figure out which strategy makes the most sense for youpersonally, and carefully calculate your residual income goals.
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When looking at income in the future, 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 this point until we reach today, viewing our decisions with money as the pre-cursor of tomorrow The reason we even speak about residual income is the goal of retirement or what we like to call time freedom. .
When you retire, your Social Security income and pensions, if they're left, plus dividends and interest off of your investments and perhaps an income annuity will meet your needs and hopefully exceed them, and that means that you can walk away from your 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 get a little piece back when we retire (even though it's taxed in retirement again).
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Consequently, if the objective is to get residual income when we retire, which appears 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 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 more information of residual income, lets take a look 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 these seven Dont be confused, not all businesses or investments are residual, in our own opinion.
Earning income has two real 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 most people focus on earning: linear income, which can be one-shot compensation or payment in the kind of a commission, wage, commission or wages.
We think that income that exceeds your expenses is called PROFIT! So, we're going to use the first definition for the sake of this document. .