Accredited Investor Qualifications: How To Become An Accredited Investor Without High Income Or Net Worth

Stock markets hitting record highs every day have many investors, including myself figuring out our portfolio’s diversification.

Analyzing the list of best assets to buy, we notice that asset-based lending provides the best return on a risk-adjusted basis. Since asset-based lending involves lending money secured by assets, some protection level assumes the investment is accurately valued.

The rise of professionally managed platforms provides opportunities for investing in passive asset-based lending such as real estate syndicationfarmland, art, lawsuit financing, etc.

The SEC regulations restricting investments to only specific investors’ categories resulted from past frauds. 

Why Accredited Investor Restrictions Exist

Accredited Investor Qualifications Based On Finances

Income Criteria Accredited investor qualification is based on an annual income exceeding $200,000 ($300,000 joint filing) for the last two years with the expectation of earning the same or more income in the current year.

Accredited Investor Qualifications Based On Knowledge

The SEC improved the accredited investor definition and added the knowledge criteria. Any individual can meet the accredited investor qualifications by having specific professional certifications, designations, or other credentials issued by an accredited educational institution.

The approved designations include individuals in good standing with the Series 7, Series 65, or Series 82 licenses. The SEC could also reevaluate and add additional certifications, titles, or credentials in the future.

Also, as part of the rule change is the SEC adding the term “spousal equivalent.” This means that if one spouse qualifies as an accredited investor, the person’s spouse does as well.

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