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Originally Posted by Gravydoo II
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It doesnt. It works, but it works best for those with money.
Did you know you're not even ALLOWED to be an accredited investor if you dont make 200k a year. Because too many poor people owning stock and businesses can crash the economy for the rich people... They are the only ones privileged to crash the economy and make big investments. They are allowed to bet the farm. You're not.
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To be fair, this is a mischaracterization of the AI standard and the rationale behind it. First, you don’t need to be an AI to buy many public stocks.
The AI standard applies to private funds and private stocks. And the reason it exists is that the SEC wants to ensure people with less money are more protected so that they don’t go out and buy into higher risk situations. The idea is that someone below the AI threshold is 1. Less financially able to bear the risk of the loss of their investment and 2. Potentially less sophisticated from a financial knowledge standpoint and therefore might not be able to fully analyze the investment and it’s risks. The AI standard isn’t some scheme by the rich to keep themselves as the only people able to buy private stocks and funds...trust me; as an example, the rich want as many people as possible to be able to buy shares in their hedge funds haha