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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 each year. Now, an estimated 70 million Americans invest in REITs.
On account of their particular tax status, REITs must follow strict compliance standards and thus carry a certain quality standard for both the vehicles investment plan and the property experience of the managing team.
What's more, publicly-traded REITs tend to be correlated to broader market volatility, meaning that the share value may fluctuate depending on the way 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 are becoming popular, because of 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 these fees.
In the last few years, pioneering new platforms like Fundrise have emerged. Fundrise intends to offer the benefits of personal market access, but with lower prices that potentially help investors earn superior returns. Leveraging technology and new national regulations, Fundrise offers investors that the first ever diversified commercial property investment portfolio available 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 process is careful due diligence of each opportunity as it appears and working hard to remove any pre-existing biases. Take time to figure out which approach makes the most sense for youpersonally, and carefully compute your residual income objectives.
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When looking at income in the future, shouldnt we're looking at what is going to happen and determine whether that's what we want life to look like We need to work backward from that point until we reach today, viewing our decisions with money as the pre-cursor of tomorrow The reason we even talk about residual income is thats the goal of retirement or what we prefer 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 perhaps an income annuity will fulfill your needs and hopefully surpass 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, that the government takes money from us every paycheck and we get a small piece back when we retire (even though it is taxed in retirement again).
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So, 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 prior to taking our money before 59.5, wouldnt it be prudent to begin investing in resources 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 of residual income, lets have a look at other high-level places we can diversify. Who knows, maybe you could start generating residual income now and step into that time independence sooner than your 60s.
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Taking inventory of where you are at is indeed crucial. Are you currently doing one of these seven Dont be confused, not all businesses or investments are remaining, in our own opinion.
Earning income has two real definitions. Lets look at those first. Residual Income is income that continues to be generated following the my blog initial effort has been expended. Compare this to what the majority of men and women focus on earning: linear income, that is one-shot compensation or payment in the form of a commission, wage, commission or salary.
We believe that income which exceeds your expenses is called PROFIT! So, we're going to use the first definition for the sake of this document. .