How To Reverse Fees, Lower Interest Rates, and Keep More Of Your Money

How To Invest in Real Estate Investment Trusts for Passive Income

What is a ‘Real Estate Investment Trust – REIT’

A real estate investment trust, or REIT, is a company that owns, operates or finances income-producing real estate. For a company to qualify as a REIT, it must meet certain regulatory guidelines. REITs often trades on major exchanges like other securities and provide investors with a liquid stake in real estate.

BREAKING DOWN ‘Real Estate Investment Trust – REIT’
REITs are not a new financial innovation. Established by Congress in 1960 as an amendment to the Cigar Excise Tax Extension of 1960, REITs operate in a manner comparable to mutual funds as they allow for individual investors to acquire ownership in commercial real estate portfolios that receive income from properties such as apartment complexes, hospitals, office buildings, timber land, warehouses, hotels and shopping malls.

Most REITs specialize in a specific real-estate sector – for example office REITs or healthcare REITs. Within this space, REITS must purchase and operate its holdings as a part of its portfolio. In most cases, REITs operate by leasing space and passing on collected rent payments to its investors in the form of dividends.

REIT Guidlines
A company must meet the following requirements to be qualified as a REIT:

Invest at least 75% of its total assets in real estate, cash or U.S. Treasuries
Receive at minimum 75% of its gross income from rents from real property, interest on mortgages financing real property or from sales of real estate
Pay a minimum of 90% percent of its taxable income in the form of shareholder dividends each year
Be an entity that is taxable as a corporation
Be managed by a board of directors or trustees
Have a minimum of 100 shareholders
Have no more than 50% of its shares held by five or fewer individuals
Different REIT Categories
REITs typically fall within three categories.

Most REITs are equity REITs. Equity REITs invest in and own income-producing real estate properties and give investors the opportunity to invest in these portfolios. They must distribute at least 90% of the portfolio’s income to its shareholders in the form of dividends.
Mortgage REITs invest in and own property mortgages. These REITs loan money to real estate owners and operators not only for mortgages but also for different types of real estate loans or through purchasing mortgage-backed securities. Their earnings are generated primarily by the net interest margin, the spread between the interest they earn on mortgage loans and the cost of funding these loans. This model makes them potentially sensitive to interest rate increases.
Hybrid REITs invest in both properties and mortgages.
How to Invest in REITs
Individuals can invest in REITs either by purchasing their shares directly on an open exchange or by investing in a mutual fund that specializes in public real estate. Some REITs are SEC-registered and public, but not listed on an exchange; others are private.

Many REITs will invest specifically in one area of real estate—shopping malls, for example—or in one specific region, state or country. Others are more diversified. There are several REIT ETFs available, most of which have fairly low expense ratios. The ETF format can help investors avoid over-dependence on one company, geographical area or industry.
(Information from https://www.investopedia.com/terms/r/reit.asp)

What is ‘REIT ETF’

REIT ETF is exchange-traded funds that invest the majority of assets in equity REIT securities and related derivatives. REIT ETFs are passively managed around an index of publicly traded real estate owners; indexes may vary from provider to provider but two popular benchmarks are the MSCI U.S. REIT Index and the Dow Jones U.S. REIT Index, both of which cover about two-thirds of the aggregate value of the publicly-traded REIT market domestically. REIT ETFs are characterized by their above-average dividend yields.
(Information taken from https://www.investopedia.com/terms/r/reit_etf.asp)

List of Real Estate Investment Trusts
CLICK HERE to get a list of real estate investment trusts

Conclusion

Real estate investment trusts are a way for an investor to start getting into the real estate market without putting down a 30% down payment.

With any investment there is risk, so do your research and see if investing in REITs is right for you!

As a passive income investor, I create passive income for myself and my family. In 2016 I quit my bank job to become a part time investor, part time finance freedom coach, and full time mommy =)

If you are interested in creating Financial Freedom for yourself and your family and want to do it with the guidance of caring and effective mastermind, then CLICK HERE, enter your first name and best e-mail address, and watch the free video!

PLEASE READ THE IMPORTANT DISCLOSURES BELOW.
This commentary provided by Yes Financially Free is for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities by Yes Financially Free or its affiliates. No information presented constitutes a recommendation by Yes Financially Free or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy.

Full portfolio management and advisory services are offered through an investment adviser registered with the Securities and Exchange Commission. Upon request, we will send you a free copy of E*TRADE Capital Management’s Form ADV Part 2A, which describes, among other things, affiliations, services offered and fees charged.

Data and statistics contained in this commentary are obtained from what Yes Financially Free considers to be reliable sources; however, its accuracy, completeness, or reliability cannot be guaranteed.

Investing in securities involves risk, including possible loss of principal.
Past performance is not an indication of future results.

Diversification, asset allocation strategies, automatic investing plans and dollar-cost averaging do not ensure a profit and do not protect against a loss in declining markets. Investors should consider their financial ability to continue their purchases through periods of low price levels.

Stocks fluctuate in response to the activities of individual companies and general market conditions, domestically and abroad. Investments in mid and small-cap stocks typically have higher risk characteristics than large cap stocks and may be subject to greater price fluctuations than large-cap stocks.

All bonds and fixed income products are subject to a number of risks, including the possibility of issuer default, credit risk, market risk, and prepayment and extension risk. In general, bond prices rise when interest rates fall and vice versa. This effect is usually more pronounced for longer-term securities. Lower-quality fixed-income securities generally offer higher yields, but also carry more risk of default or price changes due to potential changes in the credit quality of the issuer. Adverse conditions may affect the issuer’s ability to pay interest and principal on these securities and, as a result, they may have a higher probability of default.

Foreign investments may involve greater risks than U.S. investments, including political and economic risks, concentration risks, liquidity risks, and the risk of currency fluctuations, all of which may be magnified in emerging markets. Emerging and frontier market investments are subsets of foreign investments. Emerging markets are rapidly developing politically and economically, but present a greater degree of these foreign investment risks because of the developing stage of the emerging market. Frontier markets are in early stages of economic and/or political development and are even less developed than emerging markets. As such, risks associated with foreign investments may be significantly greater in a frontier market compared to emerging markets and foreign investments generally.

What Did You Do With The Money From Your Wedding Reception?

Mey here blogging about the interesting question What Did You Do With The Money From Your Wedding Reception?

…on your wedding day how much money did you get from gifts from your guests?

…what did you do with that money?

…did you buy dishes and appliances?

…did you put it in a joint savings account?

…what if you I told you that we invested that money and now we get paid monthly from that initial investment and I’m going to tell you how to do it too?

How We Made Our Wedding Money Make Us More Money

…Jomel and I got married on August 12, 2012 and we had our big wedding party at the end of October of that year…

…so we gathered up some cash from the party, and it was about $5,000 total…

…I discussed with Jomel and we decided to take that money and invest it for dividend income…

…so we opened a joint brokerage account and then started investing in ARR (click here for more about ARR)

…so right now, our original $5,000 investment is valued at about $2,500, meaning that if we sold all of our stock today we would get that much money (so ARR depreciated in value about 50% in the last 2 years)…

…and our dividends that we’ve earned in a little over 2 years until now have been about $1,000.00…

…currently we are making roughly $30.00/mo from this investment…

…now, we don’t know if the dividends will go up or down…

…however, we are happy that our investment is still making us money and will continue making us money until we are old and gray and pass it on to our estate…

What Would Have Happened If We Had Spent Our Wedding Money Instead?

…let’s say we had spent the money instead?

…over 2 years we could have spent about $200/mo…

…that would have helped pay some bills, just our utilities really =)

…and then what?

…we would have nothing left…

…we wouldn’t have monthly dividends to put in our joint account which have ranged from $30/mo – $60/mo…

…maybe we would have some furniture or stuff if we used it to get something…

…however, I don’t know about you, I would rather have the monthly dividends!

Conclusion

…what you did with your Wedding money is probably what you do with all of the money that comes into your life…

…you’re either investing or spending…

…wouldn’t it better to have our money work for us?

…I’m here to help you have that shift in a Financial Freedom mindset…

…because your freedom matters…

…more money for you means more money towards a harmonious marriage, and a stable family where you actually have the time and money to be there for your kids…

…please let me know in the comments below what you did with your the money from your Wedding Reception, or any other thoughts on your goal of financial freedom!

P.S.

…also, I want to let you know a little bit about me and what I do…

…I’m Mey, a blogger and a mother, wife and I’m committed to your financial freedom…

…I also use my blog to help myself and others achieve financial freedom by making money through blogging…

…have you ever thought of blogging too and making money teaching people something that you love?

…it could be on how to raise 3 boys, or on how to cook Vegan food…

…it could be on nutrition or working out to get muscle definition…

…whatever your passion is, there’s a simple system that I use to blog and make money too!

…if that is something that interests you then I invite you to CLICK HERE, watch the free video and get started =)

 

A Review Of Passive Income From REIT ARR

…Mey here on Monday morning listening to 6 Figure Shortcuts (which is the best course in building a 6 Figure income online EVER) and blogging about A Review Of Passive Income From REIT ARR

…so, to become financially free you need to have passive income…

…one way that my husband and I make money is that we invest in REITs (click here for an introduction to REITs), and most of our money is in one REIT in particular – ARR…

…to understand more about ARR, go ahead and click here to get an explanation of what a Ticker symbol is and how to research it on free websites

…this REIT pays a monthly dividend of about 16%…

…you might think WOW, that’s great…

…that’s why my husband and I bought so much of it…

…well, the price kept dropping and now the money that we put into it is worth half of what we invested (we kept buying as the price kept falling too)…

…and when the stock price goes down, the amount of money paid in dividends goes down as well…

…then a couple of months ago the stock did a 8 to 1 reverse split, meaning that 8 stocks were combined to make 1 stock…

…so it was about $2.80 per stock and then it became $22.40 per share…

…that’s when my husband and I stopped buying and just watched…

…reason is the stock could still fall in value, and then be reverse split again…

…so, the stock price has been stable since the reverse split, which happened back in August 2015…

…during this time, we still make a lot of money from the dividends from the shares of ARR that we already bought…

…so I decided to review where we were at…

…the fact that the value of our stock has decreased does not concern me as much as the dividend income decreasing…

…the reason we invested in ARR is for passive income…dividends…

…so I calculated the amount of dividends that we have received divided by the amount of money that we have invested and the return has come out to 9% over the last 5 years that I personally have been investing in ARR…

…now that’s still pretty good…

…so it basically went from 16% face value of dividends and became really 9%…

…now, truthfully, past results do not predict the future…

…so I don’t know if ARR is going to go down or up in the future…

…they say what goes up must go down, well it hasn’t gone up in the last 5 years, and it’s just been steady for the last 5 months…

…and I honestly started thinking that it might be a stock that perpetually goes down, and then reverse splits and then goes down again…

…I don’t know…

…I will say this, I’m ok with the money that I have invested in ARR so far…

…afterall, last year my husband and I claimed about $5,000 in passive income…

…which was mostly from ARR…

…and that’s pretty good…

…if we moved to Thailand or Taiwan we would already by free…

…even though it used to be more than double…

…that’s still a lot of passive income for the amount that we invested…

…not sure if I will buy more…

…probably will invest in a more stable ARR like GOOD…

…even though it gives a smaller return of about 8%…

…I hope that gives you a good idea of the risks involved in buying ARR…

…my brother actually told me that the higher the return, the more risky (usually) is the investment…

…let me know what you think of this review in the comments below!

P.S.

…I love blogging about financial freedom and sharing the knowledge that I have gained on saving, investing and mindset about financial freedom…

…I started blogging because I heard it could make you a lot of money as well…

…and eventually that money would become passive income…

…or at least, highly leveraged income…

…I have come to find that there is a system you need in place to make large amounts of money blogging…

…if you are interested in a long term strategy of passive income creation that also lets you express your creativity…

…then CLICK HERE, watch the free video and get started =)