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In 1960, Congress passed a law creating Real Estate Investment Trusts (REITs), large portfolios of income-producing property investments. A REIT is required by law to distribute 90 percent of its earnings to investors each year. Now, an estimated 70 million Americans invest in REITs.

On account of their special tax status, REITs must follow rigorous compliance standards and therefore carry a certain quality standard for the vehicles investment strategy and the property experience of the managing team.

There are two key types of public 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 these stocks, resulting in a liquidity premium, or a cost that all investors pay for the ability to get and sell the asset whenever they wish.

What's more, publicly-traded REITs tend to be correlated to wider market volatility, meaning that the share value may fluctuate depending on the way the stock market is doing, irrespective 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 have become more popular, due to their possible double-digit dividends. But, 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 few years, pioneering new programs like Fundrise have emerged. Fundrise aims to offer you the benefits of personal market access, but with lower prices that potentially help investors earn superior returns. Leveraging technology and new federal regulations, Fundrise offers investors that the very 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 strategy you opt to pursue to earn residual income, an essential portion of the investment process is careful due diligence of each opportunity as it arises and working hard to eliminate any pre-existing biases. Take your time to figure out which strategy makes the best sense for you, and carefully compute your residual income objectives.

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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 is what we want life to seem 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 talk about residual income is the aim of retirement or what we prefer 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 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 each 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 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 start investing in sources of residual income now that perhaps dont have an age limit into our 60s What guarantee do we have that we'll make it that long.

Additionally, what control do we really have over Social Security and our 401Ks Looking my company at the origins of residual income, lets take a peek at other high-level places we can diversify. Who knows, maybe you could start generating residual income now and step into that time freedom sooner than your 60s.

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

Residual income has two actual definitions. Lets look at those . Residual Income is income which continues to be generated after the initial effort has been expended. Compare this to what most people concentrate on earning: linear income, that is one-shot compensation or payment in the kind of a fee, wage, commission or wages.

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