4 ms·
The cost of a bad high-risk investment is an annoyance to a qualified investor. It is catastrophic to a poor person. This is also why we require car/home insura
by _ah 9y ago
The cost of a bad high-risk investment is an annoyance to a qualified investor. It is catastrophic to a poor person. This is also why we require car/home insurance, but wealthy folks can opt out and self-insure since a total loss won't bankrupt them.
Unfortunately, letting "the market" decide will just make a bunch of poor people into broke people. Do you want to take a risk with a very low chance of success? The state has a Lotto ticket they'd like to sell you.
- njarboe 9y agoThere could be some kind of test as an alternative way to become an "accredited investor". If you make $250,000 for two years, or have $1 million in liquid assets, or pass the test. Why not?
- _ah 9y agoBecause Risk is risky. Even brilliant professional investors have deals which go bad. Passing a test does not remove the bankrupcy problem.
- njarboe 9y agoHaving a lot of money does not remove the bankruptcy problem. Having a family and/or friend support system does. Maybe if you can get four people who will vouch to let you sleep at their place while you recover from bankruptcy would be a better test? Also, as said elsewhere, society now seems to let people risk big money gambling at casinos when the expected return is always negative.