What We Mean When We Talk About Accredited Investors

When people hear the term “accredited” they often think of tests or some kind of professional designation. There's no test! It's just a silly choice of wording.

Across Canada, individuals qualify as accredited investors if they meet at least ONE of the following criteria:

• You had net income before taxes of more than $200,000 over each of the past two years, and you have an expectation that this income threshold will be met in the current year
• Combined with your spouse, you had net income before taxes of $300,000 over each of the past two years, and you have an expectation that this income threshold will be met in the current year
• Combined with your spouse, you have net financial assets worth more than $1 million (net of related debt). This includes cash and securities, including the value of any private companies you have investments in/ownership of.
• Combined with your spouse, net assets worth more than $5 million (net of debt). This includes cash and securities, and real estate. (The key difference here versus above is that this category includes your house. If you have a $4M+ house and less than $1M invested elsewhere you still qualify.)

While some folks classify as accredited investors because they are registered advisors and dealers, the vast majority of people classify as accredited investors through the above wealth threshold.