What is an accredited investor? What is the difference between being accredited or not? Are you one, and if not, how do you become one? Steven dives into all things about being an accredited investor to answer these questions and more.
What is an accredited investor? What is the difference between being accredited or not? Are you one, and if not, how do you become one? Steven dives into all things about being an accredited investor to answer these questions and more.
Key Takeaways:
Steven Pesavento 00:00
Welcome back to the Investor Mindset podcast. I'm your host, Steven Pesavento. And each week, we share mindset tips and real estate investing strategies to help you take your business and your investment portfolio to the next level. Today, we're gonna be answering one of the questions that I get the most. And it's what is the definition of an accredited investor? Am I already accredited? And if I'm not, how can I get involved in these types of passive investment opportunities? We're gonna answer that and more. So come along with me. Let's sit down. And let's dive right in.
Steven Pesavento 00:28
This is the Investor Mindset podcast and I'm Steven pesavento. For as long as I can remember, I've been obsessed with understanding how we can think better, how we can be better, and how we can do better. And each episode we explore lessons on motivation and mindset for the most successful real estate investors and entrepreneurs in the nation.
Steven Pesavento 01:00
Welcome back, Steven Pesavento here with the Investor Mindset. And each week, we share mindset tips and real estate investing strategies to help you take your business and your investment portfolio to the next level. And today, we're gonna be covering a topic that I get questions about all the time, there's so much confusion on this topic that I think it's time we put it to bed for good, what is the difference? Or what are the qualifications to become, or to be qualified as an accredited investor? It's, it's a very important definition understand, but it's very simple. So today, I outlined what that definition is, why it exists, and most importantly, how you can get familiar with it so that you can take the right steps to get involved in the right investment opportunity. So without further ado, appreciate you listening. If you're just joining us, make sure you hit that subscribe button so you never miss another episode, you can do that right down below. And if you've been here for a long time, we appreciate you head over and drop us a review. Let us know what you think. Help us reach more people with this message.
Steven Pesavento 02:02
So as we dive into really outlining what the definition is of an accredited investor, I talked to many different investors on a weekly and monthly basis where they believe that they're not accredited. But the truth is they are. And so what does it take in order to be accredited investor? Well, there's three very simple tasks that the SEC the Security Exchange Commission has put out that determine whether or not you're quote accredited. And so what's the purpose behind this? Well, their intent is to protect you as an investor. And they believe that if you meet these qualifications, you have the financial know how, and you make enough money in order to lose it, because investing has risks that go along with it. So they're looking to protect you as an investor. So do I believe that personally, if you're not accredited, you don't have the ability to make your own decisions about whether you should get involved with an investment. Of course I don't, but we've got to follow the rules. So you do too. And so in order to be an accredited investor, you fall into one of these two categories, either you are single, and you make over $200,000 per year, and you've done so for the last two years. Or you're married and you make over $300,000 per year jointly. And you've done so for the past two years, and you expect to continue doing so in the future. Or you have a net worth a total value of your assets that you and your spouse own. Collectively, that is valued at over $1 million, excluding your personal residence. So it's a question that often comes up during investor intro calls, what is your approximate net worth? And we're curious, because it helps us understand your ability to invest on a continuous basis course, that decision will be up to you about finding that right investment. But it's important for us to understand so that we can bring you the right kind of deals. So if you fall into one of those two categories, you're credited, if you're right on the cusp, or you're right on the line, then obviously you want to have a little bit of conversation with us, you want to let us know that. And it's important that if you're in that growth trajectory, you believe you're making more money or your net worth is getting closer, or you're just not even sure about how to measure what that net worth is that's worth having a conversation, because a lot of business owners forget that their business has a value and that value is somewhat determined, in some part by what you believe your business is worth, what the revenue is, what the assets you hold all those kind of things that ended up coming into play.
Steven Pesavento 04:31
Now, going one step further. If you don't meet those, if you don't meet those qualifications, well, what does that mean for you? Well, it means that you need to get involved in deals that are quote 506 B deals, right? You think to yourself, Well, why does that matter to me? Well, it's just a fancy label that they've put to the type of opportunities that we put out. So you'll notice that at Von Finch anytime we have an option that's available to non accredited investors, we're going to kind of very clearly state that in, in the marketing materials that we put out. And in order if you are not accredited, then you have to schedule a call to build a personal relationship with a member of our team so that we can qualify and make that decision in termination that you are a good fit. So very, very simple process. But that's exactly what you need to do. And if you are accredited, and you're investing in those kinds of opportunities, what you'll do is you'll work with your CPA, your attorney, or a financial advisor, who will write a letter on your behalf just saying that you're accredited, or you'll submit paperwork, as you're going through the process. We've got a third party administrator who handles all of that.
Steven Pesavento 05:43
So I'm curious if you're watching on YouTube drop in the comments below. Are you an accredited investor? And did you know what that definition was before you watch today's video? So if you didn't no big deal now, you know, so you can easily answer that question and be able to decide which are the right type of investments for you. So thanks for listening. Hopefully, this was valuable. I look forward to seeing you on the next episode.
Steven Pesavento 06:11
Thank you for listening to the investor mindset podcast. If you liked what you heard, make sure to rate review, subscribe and share with a friend. Head over to the investor mindset.com to join the insider Club, where we share tools and strategies from the top investors and entrepreneurs and how to take it to the next level.