One way to dramatically increase your net worth over time is by changing the words you use. A long time a go I talked about fast words, how you could simply create more wealth faster by using a faster vocabulary of wealth build terms than slow terms.
You will often find accredited investors using faster words more often. What is an accredited investor, don’t worry, I’ll explain below. That’ll be a new fast word for you to begin. But let me give you a quick example of the old fast words post if you don’t have the time to read it now.
- a slow word is saving money, a fast word is raising Capital.
- a slow word is appreciation, a fast word is Depreciation or “Phantom Cash”
- a slow word is high paying job, a fast word is Cashflow
Do you see the difference in language, that rich people generally talk with stronger, more powerful faster action words than poorer people. The rich and poor don’t talk just differently, they talk the complete opposite. And you understand this. I’m sure you already talk much differently than your friends if your already more successful. And now of course realize, there are even more successful people talking even strong and faster words than we do that were not even aware of.
I once heard that your IQ increases as your vocabulary increases. So lets increase our vocabultarys sohall we? So I will start to post one for now, and in later posts, new fast words that you might not be aware of so together we can increase our vocabulary and our IQ. But of course I’m not just going to talk about any words, were going to explore fast words that by using them will increase our income making abilities by ten folds because we are using faster money making language whichw ill affect our actions and ultimately, our income.
The first fast word today, is about “accredited investors.” I mention it earlier in this post about how accredited investors more often say fast words than non-accredited investors. Let’s first explain what is an accredited investor.
An accredited investor is actually a term defined by the IRS to describe a high-net worth individual or couple. You are either an accredited investor or not in the eyes of the IRS. Here is what describes an accredited investor as an individual.
- A personal or couple, has a net worth exceeding $1 million dollars
- A single person who has earned over $200,000 in the last 2 years in a row, and is expected to do the same next year
- A couple who has earned over $300,000 in the last 2 years and is expected to do the same or more next year.
In essence, an accredited investor is someone defined by the IRS who makes money, or either has a lot of money. But the real question here is why does the IRS have a definition for accredited investors, they didn’t just decided to say people making money were accredited investors for no reason, there is a specific reason they have defined a person as accredited and I’ll share that with you.
It can really be summed up as this, the IRS believes someone who is accredited has enough financial intelligence to take part in risky investments. Because of this, they have made it illegal for some non-accredited investors to invest in certain things. You see a non accredited investor can only invest their money into a security managed by the SEC, while the accredited investor does not.
So for instance, if you wanted to invest other peoples money into stocks for example, if you were not registered for the Securities and Exchange Commissions, it is illegal to invest peoples money if they are non-accredited investors. The SEC regulates all securities, and the reason the do this is because they are trying to protect the non-accredited people from loosing their money in a risky investment. So they make it illegal if you aren’t accredited to invest into certain things that aren’t regulated, non-regulated SEC securities.
Basically the IRS doesn’t think that if you aren’t accredited you are more likely to be scammed by someone. And if you were an accredited investor they believe you are smart enough about money that you have enough intelligence to invest into something un-regulated.
Now if again lets say you wanted to invest other peoples money in stock, and you had your business your security registered with the SEC already, the SEC has already made sure that you are doing legitimate business and now anyone can invest into your security. The SEC regulates securities and makes it illegal for you to invest the money of poorer people so you can’t take advantage of people if you are selling an registered security. But you could invest the money of an accredited investor because the SEC manages they can handle their own money and make the investment.
So on the legal side of this all, the person who would get trouble is the deal maker, and if you put together stock deals or real estate deals for instance and you weren’t registered with the SEC, you could come under serious legal attention by the SEC if you were putting deals together for non-accredited investors.
So to sum this up, the importance of this post was to tell you what an accredited investor is, and that there are investments that not all people take can in part in. If it is not regulated by the SEC you have to be an accredited investor to take part in it. So you want to be an accredited investor.
Have any questions on what an accredited investor is?