How to Qualify As An Accredited Investor
Accredited Investors are a select group, defined by law and privy to investment offerings that non- accredited investors are not. Here's how to find out if YOU qualify.
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Instructions
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ACCREDITED INVESTORS: A SELECT GROUP
This may surprise some people, but most investors in America do not have access to many of the most lucrative investment opportunities that are available. Double-digit returns are commonplace and new company initial offerings are just a couple of the things that most of us will never see.
WHY?
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ACCREDITED INVESTORS: BACKGROUND
Following the 1929 Stock Market crash and ensuing Great Depression, the U.S. Congress decided that the federal government needed to intervene in the securities markets and establish new 'rules of the road'.
Congress passed the Securities Act of 1933, still in effect today, required companies offering securities to the public, to provide detailed information about their company and the investments themselves. The objective was to allow potential investors to make better informed investment decisions.
The Securities Act of 1933 also provided a new definition of those investors that can be permitted to invest in certain types of investments and called them: Accredited Investors
In 1934, Congress passed the Securities Act of 1934, which created the U.S. Securities and Exchange Commission (aka: SEC). The SEC was given authority to administer all laws relevant to the securities markets, including the Securities Act of 1933.
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ACCREDITED INVESTORS: DEFINITION
According to the Securities Act of 1933: "For an individual to be considered an Accredited Investor, they must have a net worth of at least one million US dollars or have made at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) and have the expectation to make the same amount this year."
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NET WORTH: DEFINITION
Net worth is the value of everything you own minus what you owe. (Assets - Liabilities = Net Worth)
NOTE: This includes the equity in your home.
In the Resources Section below, I have provided a FREE Net Worth Calculator link to help you determine if you would qualify as an Accredited Investor on that basis.
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ACCREDITED INVESTORS: WHY IS THIS IMPORTANT TO KNOW?
Some people aren't aware that they qualify as Accredited Investors. Many have never given it much thought and might be surprised to find that they fit the definition.
The most common oversights are: they forget to include the equity in their home and/or the value of their IRA and 401K accounts.
The reason all of this is important is because if you DO qualify as an Accredited Investor, you have access to a whole new universe of investments that most people will never see!
Many people think that double-digit returns have to be scams. Well, guess again!
Is there risk associated with these investments? Of course! Show me an investment that is completely safe. Cash? NOPE Savings Bonds? NOPE (See my link in the Resources Section titled "Safest Money Investments" for more information on this.)
Here is the bottom line: You owe it to yourself to find out if you qualify as an Accredited Investor. If you do, get together with your Financial Adviser and ask them to share with you all current and future investment opportunities that are only available to Accredited Investors.
You may never invest in any of these opportunities, but then again, you might!
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Don't have a Financial Advisor? That's OK, you can contact me. And my information is always FREE!
To contact me: in the Resources Section you will find a link titled "Contact The Author". Click on it and fill out my Contact Info Form with any questions you might have and I'll respond promptly!
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Tips & Warnings
Be sure to use the FREE Net Worth Calculator below to determine if you qualify as an Accredited Investor.
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Comments
View all 17 Comments-
BCPASSIONS
Feb 19, 2009
Thank you for the informative article. Excellent!!
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kimarkent
Feb 14, 2009
Nope don't fall anywhere near the 'accredited investors income".....like way above my head. Thanks anyways...this must be good for some percent of the population....
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Victoria R.
Feb 14, 2009
Good article on a topic I had never heard of. 5*
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jennen
Feb 14, 2009
Great article... thank you
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Patrick Vick
Feb 13, 2009
God, I need to make some money. 5
