What is an Accredited Investor?

Private investments are not open to everyone. The SEC created the concept of the accredited investor to ensure that only individuals with sufficient income, net worth, or financial expertise can participate.

Key Criteria
Income test: $200,000 annual income ($300,000 with spouse) for the past two years.
Net worth test: Over $1 million in net worth, excluding primary residence.
Professional credentials: Holding a Series 7, 65, or 82 license qualifies.
Entity investors: Trusts or companies with $5 million+ in assets also qualify.
Why It Matters
Accredited investors are considered financially sophisticated and better able to understand the risks of private deals. By limiting access, the SEC provides a safeguard against uninformed or over-leveraged investing.

Takeaway
If you qualify as accredited, you can access a broader range of opportunities like real estate syndications, venture funds, and private equity.