What Does It Mean To Be An 'Accredited Investor'?

If you’ve grown tired of investing in the same old boring publicly traded companies, bonds and commodities and want to open up a new world of investment, maybe you have what it takes to be a member of the SEC’s elite club of accredited investors.

Accredited investors have access to securities that no other investors can touch. 

Qualifications

In order to qualify as accredited, an investor must meet one of the following two conditions:

1. Individual income of $200,000 or more (or joint income with a spouse of $300,000 or more) in each of the last two years and a reasonable means of maintaining that income level in the future.

2. Net worth of more than $1 million, excluding the value of a primary residence.

How To Become An Accredited Investor

If you are part of the rare group that wasn’t immediately shut down by the two conditions outlined above, congratulations: you passed! Becoming an accredited investor requires no application or certification. If you meet the standards, you’re accredited.

What Are The Advantages To Becoming An Accredited Investor

In a recent interview with Benzinga, Mike Furlong, co-founder and CEO of Sliced Investing, discussed the advantages to being an accredited investor. “It opens up all kinds of doors in terms of investment diversification,” Furlong explained. “Being an accredited investor allows you to invest into private offerings – investments like hedge funds or private companies.”

Accredited investors also have access to other non-registered securities and are allowed by the SEC to invest in venture capital funds and companies participating in equity crowdfunding as well. The SEC deems accredited investors capable of taking on more risk than the typical investor.

Posted In: Mike FurlongSliced InvestingEducationHedge FundsPersonal FinanceInterviewGeneral