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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 percent of its earnings to investors every year. Today, an estimated 70 million Americans invest in REITs.

Due to their special tax status, REITs must follow strict compliance standards and thus carry a certain quality standard for the vehicles investment plan and the property experience of the managing team.

There are two primary types of people REITs: traded and non-traded. Publicly-traded REITs give 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 most 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 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 have become more popular, because of 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 those fees.

In the last few years, pioneering new platforms such as Fundrise have emerged. Fundrise intends to offer you the benefits of personal market access, but with reduced fees that potentially help investors earn better returns. Leveraging technology and new national regulations, Fundrise provides investors that the very 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 strategy you decide to pursue to earn residual income, an essential portion of the investment procedure is careful due diligence of each opportunity as it arises and working hard to eliminate 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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Find out what's happening in Building Residual Income Meetup groups around the world and start meeting up with all the ones near you.

When looking at income in the long run, shouldnt we're looking at what's going to happen and determine if that is what we want life to look like We need to work backward from this point until we achieve 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 prefer to call time liberty. .

When you retire, your Social Security income plus pensions, if they're left, and dividends and interest off of your investments and maybe an income annuity will meet your needs and hopefully surpass them, so 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 little piece back when we retire (even though it is taxed in retirement again).

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So, if the objective is to have residual income when we retire, that appears based on Social Recommended Site 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'll 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 tech places we can diversify. Who knows, perhaps you could begin generating residual income now and step into that time freedom sooner than your 60s.

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Taking stock of where you are at is so crucial. Are you currently doing one of these seven Dont be confused, not all businesses or investments are residual, in our opinion.

Residual income has informative post two real definitions. Lets look at these . Residual Income is income that continues to be generated after More about the author the initial effort has been expended. Compare this to what the majority of people focus on earning: linear income, which is one-shot compensation or payment in the form of a fee, wage, commission or wages.

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