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Emoji Finance Friday©: Accredited Investor

1. You have a question 

2. For your advisor about an investment 

3. She explains to you 

4. That you need Two Years of $200K Income 

5. Or $1 Million net worth not including your house

6. To be considered an accredited investor

Let us break this down 

You have a question for your financial professional about an investment; the advisor explains to you that you need to have at least two years of income of $200,000 to qualify and/or a net worth of a million dollars not including the house where you live. This all equals something called an accredited investor. 

What is it? 

An accredited investor is a person or an “entity” that meets certain criteria of someone who has been deemed by the government to be allowed to invest in securities that aren’t registered with the SEC, therefore being able to invest in securities that have less regulation. 

To be a considered an accredited investor you must satisfy ONE of the below 

• Individual annual income of $200,000 for the last two years 

• Joint annual income of $300,000 for the last two years 

• Joint or individual net worth of $1,000,000, not including your primary residence 

• If you are a general partner or an executive partner 

• Director or related to issuing security 

• An entity that has assets worth at least $5,000,000 

• Registered brokers and investment advisors 

All it takes is to qualify for one of the above and you are into the club of “accredited investors:” 

Why Do You Care?

Well, becoming an accredited investor opens up the doors to alternative investments that come with diversification into real estate; Want to invest in a strip mall? Well, you can join with a bunch of other accredited investors to own part of one; this is called a REIT (Real Estate Investment Trust). Or even make investments that give you tax breaks! Yes, investing money and getting a tax break #winwin. For example, there are investments on low-income housing that you can claim a tax break for if you are investing in this vehicle, but again you can only get into these alternative investments if you are accredited. 

We here believe that every one of you orcas should strive to become an accredited investor because of the diversification and opportunity it gives you as an investor. Again, once you become one it is wise to work with a professional to find the right investments that fit your needs. So let's all punch our stamps and become accredited! #goals

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