SEC Modernizes the Accredited Investor Definition
These are good steps, but abolishing all wealth-tests entirely would still be better.<p>There&#x27;s no wealth-test that prevents a person from losing all their money in highly-leveraged investments - from real-estate to fancy public-market securities. (Over-leveraging into real estate is practically encouraged by public policy.)<p>There&#x27;s no wealth test against putting all one&#x27;s cash into gambling, which can be arbitrarily worse than even the riskiest non-fraudulent startup investment, depending on your choice of wagers. (Official state lotteries are among the worst games, with the most manipulative marketing - to a level of deception that would generate lawsuits &amp; legislation if attempted by private actors.)<p>There&#x27;s no wealth test before purchasing legal but addictive &amp; judgement-impairing substances like alcohol &amp; marijuana.<p>But if you want to put $5-$20K into a friend&#x27;s business, or a business you know well, the SEC makes it hard unless you&#x27;re already a millionaire. It&#x27;s insanely paternalistic &amp; economically destructive - a ghostly holdout from some bad experiences in another era, the 1930s, when the ranges of available information, experience, and alternative temptations were all tiny &amp; quaint compared to the 2020s.