The most common ways to be considered an accredited investor are to either have a net worth of more than $1 million or to have an annual income exceeding $200,000.
Meeting that criteria will give you the status to make exclusive types of investments. But maybe you are still new to learning about accredited investors and aren’t sure what opportunities are available to you.
Scott Steinberg of Rocket Mortgage elaborates, breaking down some of the most popular options on offer and how they work.
Real Estate Investment Trusts
REITs, for short, are groups that handle funds for a range of properties, such as how groups like PREIT and Simon Property Group oversee their collections of malls throughout the Pennsylvania area. Whereas with much of real estate investments you are left managing the property or being a landlord, investing in REITs lets the investment trust take care of those aspects, while you focus on the financial side.
If you want to get involved with a career investor, hedge funds can offer you the most versatility in your options. The reason being that once investments start getting into high asset stakes, it is assumed people with that level of wealth are financially responsible enough to not need as much regulation to protect them. That is why hedge funds are free to deal in derivatives, options, and shorts, and you as the investor are able to pick the fund with the investment strategy that most appeals to you.
Everyone knows about sites like Kickstarter and GoFundMe and how they raise funds from the public to support a project. But the term can also apply to things like equity crowdfunding, wherein the investor actually obtains a share of the company in exchange for their investment.
There is also the option to partake in real estate crowdfunding, which allows for more flexibility than outright buying a property, such as the capability to have a stake in a property that might be beyond what you would normally be able to get financially involved with.
It’s not new
Fred Hubler, Chief Wealth Strategist of Creative Capital Wealth Management Group, says, ”Many accredited investments have been around for a long time. It is one of the most used assets classes for foundations and endowments due to the lack of correlation to the public stock and bond market.”
“When we build our household endowment model,” Hubler continues, “we utilized many of the same accredited investment types as these foundations.”.
The status of being an accredited investor provides investors with many exciting options to consider. Though the risks of investing in projects with fewer regulations will be greater, for the savvy investor, it can also yield higher returns.
To learn about more accredited investor opportunities you could put your assets into, be sure to read Rocket Mortgage’s article here.
Want to know if you’re on the right path financially? Fred Hubler’s Second Opinion Service (SOS) is a no-obligation review with Creative Capital Wealth Management Group‘s Chief Wealth Strategist.
It’s simply not possible to get a reliable second opinion from the same person who gave you the first one. Click here to schedule an SOS meeting with Fred and his team.