Can I Be an Accredited Investor Even Though My Assets Are Less Than $1 Million?

by Carol Deeb

Researching stocks and other investments helps you make the right decisions about what to do when investing your hard-earned money. The goal is to watch your money multiply, but some investors watch it disappear. That's why the Securities and Exchange Commission regulates who is allowed to buy unregistered securities. You can qualify to be an accredited investor by meeting certain criteria, and you don't necessarily have to be worth $1 million.

Securities Act Requirements

The Securities Act of 1933 requires companies that sell stock, bonds or other securities to register with the SEC. Registering with the SEC is labor-intensive, requiring disclosure documents and a fee. In addition, the SEC must review the price that you plan to request for your stock. Private information about your company must be made public and a close review is made of your business practices.

Accredited Investor

If you want to sell your company's securities, you do not have to register with the SEC if those wanting to buy your stock fall under an exemption for accredited investors. The SEC assumes that someone who qualifies as an accredited investor is savvy in investment issues, and therefore less likely to lose money by being uninformed about security purchases. This protects investors by making companies prove to the SEC that they are screening potential clients before taking their money.


Accredited investors must qualify to buy securities from unregistered companies. For example, banks, insurance companies and investment firms are accredited investors. In contrast, an individual, who is not part of a corporation, is considered accredited if he owns $1 million dollars in assets. As of the date of publication, the total amounts of assets owned may include the value of your primary residence. However, proposed legislation may eliminate this allowance. If you do not own $1 million in assets, you can qualify as an accredited investor if you have annual income of more than $200,000 individually or $300,000 with your spouse.


If you meet the qualifications of an accredited investor, you may not have leverage if you lose the money that you invest with a company. Since the SEC assumes that you are knowledgeable about investments once you are accredited, you will have a difficult time proving that you were a victim of fraud or other suspicious activity on the part of a company.

About the Author

Carol Deeb has been an editor and writer since 1988. Her work has appeared in magazines, newspapers and online publications, as well as a book on education. Deeb is a real-estate investor and business owner with professional experience in human resources. She holds a Bachelor of Arts in English from San Diego State University.

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