Unlock the exclusive world of accredited investing where the stakes are high, the opportunities are great and the rewards can be a game changer. From hedge funds to venture capital delights, they embark on an investment journey that only a select few are allowed to explore.
When I became an accredited investor, I found myself in an elite group with the financial resources and regulatory permission to access investments that many could not, which opened the doors for me to exclusive areas such as hedge funds, venture capital firms, specific mutual funds, private equity funds and more.
Although I had this “exclusive access”, it took me a while to invest in alternative asset classes.
The Securities and Exchange Commission states that as an accredited investor, I have a level of sophistication that allows me to build a periled investment portfolio than a non-qualified investor. Although this may not be true for everyone in general, in my matter I had demonstrated the financial resilience necessary to bear more perils (see investing with dumbbells), especially when my investments were experiencing an unforeseen downturn.
Introduction to Accredited Investors
An accredited investor is a natural person or business entity authorized to trade in securities that may not be registered with the tax authorities. You are entitled to this privileged access because you meet one or more requirements in terms of income, net worth, asset size, governance status or work experience.
The concept of a qualified investor arose from the idea that people or organizations with a higher financial sense or more resources are superior equipped to understand and bear the perils of certain investment opportunities.
In the past, the distinction in the middle accredited and non-accredited investors was made to protect less experienced investors from potentially peril or less transparent investment opportunities.
Regulators such as the U.S. Securities and Exchange Commission (sec) have established criteria to determine who is eligible as an accredited investor to ensure that they have the financial stability and sophistication required for more complex investment projects.
Best Investment Opportunities for Accredited Investors
Here’s a look at some of the best investments for accredited investors…
1. Fundrise
Minimum investment: 500
Ideal for beginners
Fundrise has revolutionized the real estate investment landscape. Democratizing access to real estate portfolios allows individuals to invest without the complexity of property management or the need for significant capital. The innovative approach of the platform provides contact with a traditionally lucrative, but often inaccessible market sector
Fundrise allows investors to access a wide range of real estate, from commercial companies to residential units. The platform’s team of experts manages these portfolios, thus ensuring a balance in the middle peril and return. With its user-friendly interface and transparent reporting, Fundrise has become a first choice for many people who venture into real estate investments.
How It Works
Investors start by choosing a suitable investment plan for Fundrise. After the investment, the platform pools the funds with other investors and disallocates them to various real estate projects. Since these properties generate rental income or capital gains, investors receive returns in the form of dividends or increases in value.
2. Fairébé
Minimum investment: 10,000
Best suited for: experienced investors
Equitybee offers a unique platform that bridges the gap in the middle private companies that are about to go public and potential investors. This innovative approach provides a unique opportunity for investors to take advantage of the potential of startups and other private companies before they make their public debut.
The platform mainly focuses on employee stock options. By allowing investors to invest in these options, they may be able to benefit from their appreciation as the company grows. With a wide range of companies, from emerging startups to established giants, Equitybee offers a wide range of investment opportunities.
How It Works
Investors browse stock options available from various companies on Equitybee. Once you have decided on an option, invest your funds, which will then be used to purchase employees’ stock options. If the company goes public or is acquired, the investor can benefit from the increase in the value of these shares.
3. Percentage
Minimum investment: 500
Ideal for beginners
Per Cent stands as a beacon in the vast sea of the personal loan market and illuminates a sector that is often overshadowed by traditional investments. This booming market, with a value of over 7 trillion, is made up of companies that borrow from non-banks. The percentage provides a unique perspective on this market and allows investors to diversify their portfolios beyond typical stocks and bonds.
The appeal of Percent lies in its ability to achieve shorter maturities and higher returns, combined with largely decorated public procurement investments. This makes it an attractive offer for those who want to move away from the volatility of traditional markets.
How It Works
By joining Percent, investors get a variety of opportunities for private loans. After selecting an investment, the funds are pooled with other investors and loaned to loan-seeking companies. When these companies repay their loans, investors earn interest, which provides them with a steady stream of income.