> relatively low traditional income requirements ($200k/yr)
$200k/year may be "relatively low" in certain areas, but it borderline unattainable in many parts of the country.
People can be smart, and perfectly capable of understanding the risks with offerings in their own industry, without making 200k/year. Don't automatically discredit people with airquotes based on their salary alone.
There are also many people who make more than $200k/year who are, quite frankly, not "financially sophisticated enough to take on the risk".
Yeah, the $200k/year threshold excludes something like 97% of individual income earners (https://dqydj.com/income-percentile-by-age-calculator/). That's not relatively low, its a significant barrier to entry. Worse, a $200k income in SF or NYC (where an outsized portion of those income earners live) is a different beast when it comes to disposable income if compared to Johnson City, Tennessee.
Matt Levine has it right- just peg the total amount of investments in these sorts of vehicles to 10% of cash, stocks, and bonds, until the investor crosses the $X million dollar mark.
Yes, it is a significant barrier to entry. That is its purpose.
Upper-income households (double the national median) account for 20% (side note: yeah, we have a yawning wealth gap). Those household incomes are $207,400 in 2018. So I'm not going accept your 3% number.
> Upper-income households (double the national median) account for 20% (side note: yeah, we have a yawning wealth gap). Those household incomes are $207,400 in 2018. So I'm not going accept your 3% number.
You are comparing two different things, so your objection is invalid.
Also, as noted elsewhere, part of this change was to expand what incomes in the household count towards the accredited investor threshold. Some number of those households didn't qualify because some portion of their household income didn't.
$200k/year may be "relatively low" in certain areas, but it borderline unattainable in many parts of the country.
People can be smart, and perfectly capable of understanding the risks with offerings in their own industry, without making 200k/year. Don't automatically discredit people with airquotes based on their salary alone.
There are also many people who make more than $200k/year who are, quite frankly, not "financially sophisticated enough to take on the risk".