Facts About Accredited Investors

Accredited Investors
Accredited Investors

Have you saved up a large nest egg and are now ready to delve into the world of stock markets and other investment options? You might be tempted by some of the higher paying ventures, such as equity funds, and venture capital investments. However, many of these are open only to accredited investors.

Peter Comisar asserts that there is a wide range of investment opportunities that don’t require you to be an accredited investor. Even without accreditation, you can still put money in real estate, crowdfunding opportunities and mutual funds to name a few. But if you still yearn to be an accredited investor, here are some hurdles you have to pass.

Sufficient Income

To be an accredited investor, you and your spouse have to have at least an upper-middle-class income to qualify. What that amount is varies depending on the trust fund in which you want to invest. Not only do you have to earn a sufficient amount, but you also have to continue earning it year after year.

Sufficient Knowledge

You also have to understand how funds work. Being an employee of an equity company would count toward this, or being a licensed stockbroker. The organizers of these funds only want people who know what they are getting into as well as the risks involved.

Sufficient Net Worth

You should have sufficient money saved that losing the large amount you’re asked to invest won’t leave you destitute. The ordinary savings most people have won’t cut it. It has to be high enough that you remain wealthy even if the venture suffers a loss.

Sufficient Trust

There’s no test or other official procedure to determine whether you can be an accredited investor. The individual companies determine whether you make the grade. They’ll ask to see some kind of proof you earn the money you say you do, such as tax records and bank documents. They’ll want to get to know you and make sure you can handle such large investments.

If you have what it takes, however, you could get in on the ground floor of a promising business venture that could reap huge awards. If you don’t, keep in mind that crowdfunding is a way for lower-income individuals to invest in venture capital funds and other equity investments.

Keep these facts in mind the next time you’re tempted to jump into the venture capital arena. With a high enough income, you could get the return of your dreams.

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