Am I an Accredited Investor – What are the Qualifications?

by | Nov 23, 2018 | Money and Finance

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The Securities andExchange Commission (SEC) created the category of an accredited investor to designate individuals who are in the higher echelons of investing capability – these are considered sophisticated investors. These types of individuals, and in some cases entities, do not necessarily require the same level of protection that a novice or small investor may require when investing in a company or project. The question then is: Am I an accredited investor?

The Qualifications

In order to pass the “test” of accredited investor status, you must meet one of the following qualifications. There are other details related to these criteria, but the following are the basics of answering the question: Am I an accredited investor?

* Possessing a net worth of $1 million minimum in total assets, not to include the value of a primary residence and after discounting all other liabilities including liabilities exceeding the value of your primary residence and liabilities incurred on your primary residence within the last 60 days; or

* Earning a yearly income of $200,000 minimum for an individual ($300,000 minimum with a spouse). These income levels must have been obtained in each of the previous two years with the reasonable expectation of the same or greater level of income to be earned in the coming year.

* A director, executive officer, or general partner of the issuer of the securities being offered or sold, or a director, executive officer, or general partner of a general partner of that issuer.

* A registered broker-dealer, an SEC-registered investment adviser, a licensed attorney, or a certified public accountant has already verified me as an accredited investor within the last three months.

An accredited investor may be an individual or a specific type of entity such as a bank, trust, or company. However, we are focusing on individuals in this article.

Accredited Investor Advantages

As an accredited investor you can get access to more deals and potentially invest in those deals if they match your investment goals. Some of the opportunities available to these investors include: real estate crowdfunding, real estate syndications, hedge funds, venture capital / angel investing.

Although accredited investors certainly have greater opportunities to access high value investments and increase their wealth, in 2016, the Congress passed Title III of the Jobs Act which opens up non-accredited investors to certain investments to which they previously did not have access.

After reviewing the above information, now you may be able to answer the question: Am I an accredited investor? For more information about verifying accredited investor status, contact an experienced company with knowledge and capabilities in the investor verification arena.

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