Investing in REITs Is Your Key to Financial Freedom - Here's Our Favorite

Most people fail to appreciate the power of compounding returns.

There's no denying that we live in a world of instant gratification, especially in terms of the stock market.

Heck, I fall prey to the desire for fast profits just like anyone else. But many years ago, I realized that beating the market by just a point or two could deliver insane profits thanks to the power of compounding.

Outperforming by even the slimmest of margin is the real secret to getting rich on Wall Street.

And if the margin of performance is several percentage points... the difference can be massive.

For example, an investor with $100,000 that makes the market average return of 6% per year would have $180,000 after 10 years. This assumes that all returns are reinvested in the market.

Not a bad result for anyone looking to grow their wealth. But it's not the kind of number that accelerates retirement or helps achieve financial independence.

Now, let's put that $100,000 into the market and assume we beat the indexes by 4% each and every year for the next 10 years.

That 4% isn't a big number. Some hedge funds generate returns that double the market returns.

How much would the investor have in their account after 10 years?

The total may surprise you.

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The $100,000 invested at a return of 10% with monies reinvested in the market would grow to $235,000 over a 10-year period.

That's 55% more than the investor that simply matched the market.

So where can investors find that 4% outperformance each and every year for the next decade?

Over the long haul, the answer is real estate investment trusts or REITs.

The best REITs offer both high-yield dividends and the potential for significant returns.

And REITs look even better when interest rates are low, like they should be for the foreseeable future.

Some REITs today are paying a dividend of 10% alone.

If you factor in appreciation of even a few percentage points, an investor could be looking at well above 4% outperformance.

But there is higher risk in owning the REITs that pay the highest dividends.

For this exercise of targeting 4% above market returns, I want to take less risk targeting a REIT with a high, but not outrageously high, dividend.

That's why I settled on the following REIT as the best to invest in today...

This Is the Best REIT to Buy Right Now

[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]In my book, Innovative Industrial Properties Inc. (NYSE: IIPR) is the top REIT right now, paying a dividend yield of 4%.

That means we just need to eke out appreciation of 6% per year to beat the market by that 4% number we discussed earlier.

Considering we are nearing absolute zero (or even negative) interest rates, this sort of appreciation is nearly a given.

Fixed-income investors have few alternatives. Buying a REIT is one way to stay ahead of the game.

Innovative Industrial Properties is in the business of owning and leasing properties in the medical cannabis market.

Talk about explosive growth potential.

The legalization of marijuana is coming, and with it, a large market of participants looking to exploit the opportunity.

All of these players will need facilities of the type owned by Innovative Industrial Properties.

The company is making big money already. And that cash flow is being used to give investors that 4% dividend - and growing.

Analysts expect the company to nearly double their profits in 2020.

With the stock trading for only 45 times current year estimated earnings, shares are cheap relative to expected growth.

One could argue that the 45 multiple is justified given the solid dividend.

As a REIT, one thing is certain, Innovative will be paying out a higher dividend should the company meet current expectations.

That's the rule of being a REIT - paying out cash flow to investors.

With almost double the profit, investors can expect the dividend yield to increase by the same amount, assuming no change in the underlying stock price.

There are plenty of moving parts here in analyzing Innovative Industrial Properties, but the key point is that we can safely assume 4% outperformance year in and year out for the next decade.

If so, thanks to the power of compounding, a modest investment could appreciate considerably.

America's Favorite "Shark" Debuts Summit for Finding Unicorn Startups

Angel investing is taking the world by storm.

Everyday people from coast to coast are now backing little-known startups long before they IPO, and they're exploding in value, becoming worth billions upon billions of dollars.

But when you're in the position to have all of these exciting deals at your fingertips, you need a way to determine which could be winners - and which are nothing more than hype.

As you'll see in this brief video, the Angels & Entrepreneurs Summit is exactly the ticket...

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