If you become an accredited investor, the door opens to an array of investment opportunities that are not available to the average investor in stocks and bonds. Because these opportunities are subjected to less scrutiny and regulation, they often come with higher risks to the investor. For this reason, proper due diligence on the part of the investor is key before diving into one or more of these investment options.
Crowdfunding
The practice of raising money online (for a product, company, or project) from the general public and online is referred to as crowdfunding. This form of capital raising is facilitated through crowdfunding platforms online in which investors can make deposits.
Real Estate Syndication
In this method, a group of investors combines their funds together in a pool to buy real estate property. It is also referred to as property syndication.
REITs
Real estate investment trusts (REITs) are companies arranged as trusts that combine together and superintend investment funds in a range of different investment property opportunities that generate profit.
Private Equity Real Estate
Investing in funds managed by professionals that involve speculative property investment offerings is referred to as private equity real estate. This can range from luxury high-rises to underdeveloped land.
Hedge Funds
These are funds professionally managed by career investors that are subjected to less scrutiny and regulation than ETFs and mutual funds.
Venture Capital
This is a type of equity financing in which angel investors and venture capitalists deliver funding for promising startups and small companies in exchange for a piece of ownership in the business.
Convertible Investments
These are financial securities such as preferred shares or bonds that may be converted into common stock for a predetermined price and can increase in value over time. When you become an accredited investor you can use this investment solution to support businesses you believe have a long-term revenue and growth potential.
Hard Money Loans
These are short-term loans that are offered by persons or private businesses – as opposed to traditional lenders such as banks or credit unions – and accept a piece of property or another asset as collateral.
Interval Funds
These are closed-end funds. The shares of these funds are not usually traded on the secondary market. Rather, they serve as an investment company that routinely offers to buy back shares from its shareholders. Accredited investors wanting to increase the diversification of their financial portfolio, participate in regular investment opportunities, and divest themselves of their holdings at a profit may opt for internal funds.
In Summary:
If you become an accredited investor, you gain access to a larger number of investment opportunities than the average investor. Naturally, many of these opportunities come with greater risk, while potentially providing greater rewards.
If you fulfill the requirements of accredited investor status and are considering the switch to a more aggressive investment plan that provides the potential for higher returns, you may want to consider the opportunities only open to accredited investors.
