24 Million Americans Gain Entry to Investing Market for the Elites

<p>The number
of "accredited" investors in the US has increased significantly over
the past few years, largely driven by high inflation rates. According to new
data from the <a href="https://www.financemagnates.com/terms/s/securities-and-exchange-commission-sec/">Securities and Exchange Commission (SEC</a>), there were over 24
million accredited investor households in the US in 2022, up from 16 million in
2019.</p><p>This gives them access to markets that are reserved for only a few. Despite this, the average investors prefer to diversify their savings differently, opting for crypto or gold.</p><p>More Americans Gain Access
to Private Investments amid High Inflation</p><p>An
accredited investor meets certain financial thresholds and can invest in
private securities like hedge funds, private equity, and venture capital. However,
just three years ago, only 13% of US households had access to private market
investments. The record-high inflation, which drove up prices and consequently
led to an increase in earnings, has resulted in a significantly larger number
of people exceeding the accredited investor threshold. The number of eligible households
<a href="https://www.sec.gov/news/press-release/2023-253" target="_blank" rel="nofollow">has risen by over five percentage points</a> to 18.5%.</p><p>One of the
main reasons behind this rapid increase is that the financial qualifications
for accredited investor status have not kept pace with inflation. To qualify,
an individual must have $200,000 in annual income or $1 million in net assets,
excluding their primary residence. However, these thresholds have stayed static
since they were first introduced in the early 1980s.</p><p>Accounting
for inflation, the income threshold would now need to be over $900,000 for a
couple, or the net worth threshold would need to be around $3 million. If
adjusted accordingly, only 5.7% of US households would currently qualify as
accredited.</p><blockquote><p lang="en" dir="ltr">Nearly half of U.S. households will qualify to invest in sometimes lucrative, often risky private markets deals as accredited investors by 2042, the SEC estimated in a report last week. Currently, just under 20 percent do.