Do you only have a small amount to invest? Do you lack the time and knowledge to manage investment portfolios or properties? Are you new to building wealth? Well, I think this is a fantastic opportunity and a smart choice for anyone working towards financial freedom.
How does Fundrise work will delve into the following:
- Basic Overview
- Necessary Information to Invest
- Registering An Account
- My Opinion
What is Fundrise?
Fundrise is an online investment company based in the United States. It differs from most other firms because it allows both professional and amateur investors to join. The main form of investment is in real estate.
I will concentrate on the beginners’ needs because projektfreedom focuses mainly on those starting off on their journey to financial freedom.
It was founded in 2010 by Dan and Ben Miller in Washington, D.C. They began with crowdfunding and on Dec 3, 2015, launched the world’s first eREIT. In June 2017 they introduced the eFUND which is a diversified portfolio of for-sale housing in US cities.
Now, this may sound complicated but it’s not. Please read on and you will see how easy it is to get involved and how astonishingly little you will need to pay to participate. It used to be that only the big boys could play with real estate but not anymore!
What Do You Need to Know?
- What Do I Invest My Money In?
- Must I pay Transaction Fees?
- How Do I Keep Track of My Investments?
- What Happens to The Cash I Earn?
1. Generate Your Returns With Real Estate
There are no stocks to invest in here. All clients portfolios consist of a mix of real estate assets located across the United States. As described above, there are the eREITS and eFUNDS. The actual, specific assets chosen will be dependent on the kind of account opened. More on that below.
2. A Limited Number of Fees Are Required
Two types of fees are to be paid. The first is based on eDirect Funds (eREIT and eFUND) which is a 0.85 % annual asset management fee. The second is an annual investment advisory fee for clients who partake. It is 0.15%. Fundrise claims to save you between 0.37% to 5.45% compared to fees charged using traditional methods.
3. Follow Along From The Comfort of Your Home
The online portfolio or account is where you can track the performance of your investments. The company posts continuous updates as well as information for tax filing and other important materials. I believe there is also data and maybe photos concerning the specific properties which they have invested in on your behalf.
4. Re-Investing Makes It Grow Bigger
There are two approaches to using the money you earn. Generally speaking, it can be taken out monthly but there is a 60-day waiting period after submitting a request for redemption. The other method which I like is to re-invest dividends (the money earned). This can be done automatically for you.
How Does It Work?
- Choose A Goal
- Decide How Much to Invest
- Set Up An Account
- Cash Out or Re-invest
1. What’s Your Money Goal?
There are three goals offered with something for everyone:
A. Supplemental Income
The focus here is to maximize income. It is suitable for people who want an additional passive income stream; would like to invest for a short time, or are older and wish to retire soon.
B. Balanced Investing
This is for folks looking for general investing with maximum diversification. It is for moderate to long-term investors and it for people who may be new to investing outside the stock market.
C. Long-term Growth
This is great if you want to maximize returns over the life of your investment. You are young and can afford to wait a long time to collect your earnings and lastly are comfortable with variance from year to year.
2. Perfect For Young People With Low Cash Flow
The minimum amount necessary to begin is $ 500 for a starter account and $1000 for an advanced portfolio. That’s amazing. It means folks at any age in all walks of life can take advantage of this opportunity. The more that is invested the greater the return. Of course, younger people have time on their hands.
3. Click to Open An Account
It really is that simple. After visiting the site and choosing your goal a click of a button will bring you to a page where you can review some of the investments you will be given. Another click will bring you to a registration page where personal details are entered. That’s it.
4. Just Sit Back & Wait For Things to Happen
The money will accumulate over time. Fundrise has a calculator that predicts the return on your investment. There really is not much for you to do except check the updates and watch your cash grow. It is almost 100% hands off somewhat similar to having a broker manage stocks. However, once a year you must report your earnings for tax purposes.
Is it Legit?
This is definitely a legitimate way to earn money. I think it is absolutely fabulous for beginners or folks with a small amount to invest. The company has an excellent reputation. The Better Business Bureau has given it an A+ rating which is the highest rating it hands out.
My Final Thoughts
I have discussed in other articles that the best way to achieve financial freedom is to become a professional investor. However, depending on where you are in life, there may be a number of steps we need to take before becoming one. I think investing in real estate in this manner is a strong step forward.
Unfortunately, I reside outside of the US and cannot take advantage of this wonderful opportunity. I do hope that it will be open to Canadians sometime in the near future so I can also participate.
What Are Your Views?
Are you a member of Fundrise.com? Have you tried a similar company? Do you know of any other US or Canadian eREIT or eFUND sellers? We’d love to hear from you. Please leave a comment below and if you have any questions, I would be more than happy to answer them.
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