What is an Accredited Investor and the Benefits of Being One?

You will discover many investment options as you explore ways to build your long term wealth.

In your search, you might come across the term “accredited investor.” Perhaps you noticed certain investments are only open to accredited investors. You might wonder what one is and the benefits of being one. Read on to find out!

In this article, we’ll explain what it means to be an accredited investor and who qualifies. We’ll also discuss the benefits and responsibilities of being one.

What is an Accredited Investor?

An accredited investor is an individual or business entity that can buy investments not registered with the Securities and Exchange Commission (SEC). They have access to a broader range of investment options not available to everyone, such as real estate crowdfunding and venture capital.

The SEC sets the criteria for who qualifies as an accredited investor.

These rules aim to limit accredited investors to those with the “financial sophistication” and net worth to withstand the additional risk of unregistered investments.

Unregistered investments are riskier since they don’t have the same disclosures and regulations as registered investments.