SS102: How to Become an Accredited Investor

Accredited investors are allowed to invest into securities that are not registered with the Securities and Exchange Commission. On this episode, Charles discusses what is an accredited investor and how to become one.

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Welcome to Strategy Saturday; I’m Charles Carillo and today we’re going to be discussing how to become an accredited investor.

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First off, why would someone want to become a credit investor? Well, a credit investors are able to access investment products not available to the general public. This includes hedge funds, angel investing, venture capital funds, private equity deals,private real estate deals, crowdfunding, along with other private placement deals that are not registered by the Securities Exchange Commission, the s e c. Now these investments are usually considered alternative investments and are typically are described as being riskier, but they also have the ability for higher returns in many cases. In other words, access to unique and restricted investments with possibly higher returns, along with increase diversification for your portfolio. On the other hand, these investments are usually higher risk, higher investment minimum amounts, higher fees. In illiquid, there are a number of differing statistics out there, but about 8% to 10% of US households are credited investor households. There are three ways to be considered an accredited investor. One is by license, two is by income, and three is by net worth. First, if you hold a series 7 65 or 82, license in good standing.

Second, if you have earned over $200,000 or $300,000 jointly with a spouse during each of the last two calendar years, and you plan to maintain that income level. And third, if your net worth exceeds $1 million, excluding the value of your primary residents. And a caveat there is, that’s usually a huge deal breaker for a lot of people because the majority usually people’s largest investment is their primary residence. It is normal to have a professional like your financial advisor, accountant or attorney complete and sign your accredited verification letter. There are many templates online. For me, my attorney will sign mine when I need an updated letter, which is typically right now every five years. And I just complete mine. I email his office and he signed it and sends it back. I first became an accredited investor years back when I was running a small online business.

And during the life of that business, I had a few good years invested the majority of what I made into real estate and combined with a Roth IRA open when I was 18, made me an accredited investor. Now, how do you become an credit investor? Well, first is to calculate your net worth just as just to know where you stand it and make, make sure to exclude your primary residence. If you own a home, this is you, you have your net worth, and then you also have net worth calculation. Then you have your credit investor calculation and they’re very similar, but you have to remove your primary resides and this will give you an idea of where you stand. Second is to make a self as assessment. So don’t copy my path or someone’s else’s path that’s become successful. If you’re already making financial progress in your path.

And if you’re a profession or your business is on an upward directory, maybe go full in and really focus on it. Focus is power. Third, it would be very difficult to become an credit investor if you don’t make that much money, and that is where I would first look to make changes. If you make $75,000 a year and you’re worth $200,000, you really need to reassess your plan. What can you do to double or triple your income while keeping your expenses the same? Also note, you don’t need to make $1 million to be accredited. You might just need to make and invest half that and let your investments push you to the million dollar mark. Compound interest is such a powerful wealth-building tool. Fourth, once you have the money from increasing your net worth, don’t invest into highly speculative investments. I would invest into solid investments and then go back to work. Don’t waste your time trying to find the next crypto investment or the next penny stock that is supposed to be the next Amazon. Focus your energy on building your business or advancing in your profession while investing into solid investments like real estate index funds, et cetera, and always speak to your financial advisor prior to making any investment decisions. So I hope you enjoyed. Please remember, rate, review, subscribe, submit comments and potential show [email protected] Look forward to two more episodes next week. See you then.

Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Syndication Superstar, LLC, exclusively.

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