Investing in financial markets has its share of rules and regulations designed to protect investors. One such regulation involves the distinction between accredited and non-accredited investors. But what exactly does it mean to be an accredited investor?
Defining an Accredited Investor
An accredited investor, according to the U.S. Securities and Exchange Commission (SEC), refers to an individual or entity meeting specific financial thresholds, allowing them access to certain types of investments that are typically beyond the reach of the general public. These thresholds are primarily based on income, net worth, or professional experience in the financial industry.
Accreditation Criteria
Income: For individuals, meeting income criteria entails demonstrating an annual income exceeding a certain threshold. As of 2022, an individual must have earned at least $200,000 annually for the past two years, with the expectation of maintaining a similar income level in the current year. For married couples, the threshold stands at $300,000.
Net Worth: An individual can qualify as an accredited investor by showcasing a net worth of at least $1 million, excluding the value of their primary residence. This net worth can be individually held or jointly with a spouse.
Professional Certifications: Accreditation also extends to investment professionals with credentials such as the general securities representative license (Series 7), investment adviser representative license (Series 65), private securities offerings representative license (Series 82), or those recognized as a private fund’s “knowledgeable employee.”
Why Accreditation Matters
The criteria for accreditation aims to protect investors, ensuring that only individuals with a certain level of financial capability or professional expertise gain access to exclusive investment opportunities. Accredited investors enjoy access to financial tools beyond the reach of most others, providing a unique advantage in the investment landscape.
At Clear Mind Equity Partners, we partner with accredited investors to fulfill our multifamily real estate investment offerings. If you are accredited and interested in exploring our active opportunities, we invite you to fill out our investor form today.
