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Can money buy happiness? That’s up for debate, but your tax bracket does impact your investing options and tools available to you. It’s not quite the “have’s” and the “have not’s,” just about anyone can trade stock. However, certain high-risk investments are available only to accredited investors.
Who are Accredited Investors?
As defined by the SEC, accredited investors are individuals with a net worth of over $1 million, and a gross income of over $200,000 in the two most recent tax years with a reasonable expectation to earn the same throughout the current year.
What can accredited investors tap into that unaccredited investors can’t? Here’s the list.
- Hedge funds
- Venture capital
- Private equity deals
- Equity crowdfunding
- Angel investing
These are all super high risk investment types that often reap extremely high reward. The SEC limits these investments to accredited investors to ensure they have enough dough to roll with the risk.
In addition to these investment types, accredited investors can be gained special privileges to investments open to all. This can look like a company offering shares exclusively non-accredited investor.
Conclusion
In short, accredited investors have enough money to unlock the entirety of the trading world. Should you still invest as a non-accredited investor? Absolutely, enjoy the fee market as much as you can. You don’t need to be accredited to access a multitude of awesome investing options.