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How a Classist System Has Kept Americans from Building Wealth—Until Now.

The “accredited investor” label is difficult to obtain. That used to be a deal-breaker for investing in the things you care about.

July 28, 2021

Corporations, private equity firms, and even investment portfolios are all fairly new concepts in the scope of American history. But the concept of investing—putting capital into a project or a business because you believe it will yield a profit—is as old as capitalism itself.

Why is it, then, that most Americans are locked out of investing in the projects and businesses they believe in? 

It’s because of an exclusionary system designed to support well-to-do Americans—called “accredited investors”—who already control trillions of dollars of wealth in this country. 

To be considered an accredited investor, an individual must have an annual income exceeding $200,000 (or $300,000 in joint income with a spouse). Alternatively, an individual or couple can qualify with a net worth greater than $1 million. Based on the high monetary threshold, in addition to bureaucratic red tape, it is no surprise that only about 10% of households are considered accredited investors. Shockingly, however, this small group controls more than three-quarters of private wealth in America.

How did the investment system end up so rigged against everyday Americans? 

The roots run deep.

After the stock market crashed in 1929, the Securities and Exchange Commission (SEC) was established in an attempt to restore public confidence in investing. Decades later, amid a period of deregulation in the 1980s, the SEC created Regulation D to allow accredited investors to invest in private opportunities without rigorous vetting by the government.

This accredited investor status exists, in theory, to protect the general public from engaging in risky or uninformed investments. Ironically, these rules meant to protect investors and restore confidence in investing have only served to divide Americans and exacerbate wealth inequality. Even with the 2020 addition of a FINRA license that allows people to obtain accredited status, there are still significant limits to the opportunities available for licensed individuals—not to mention the license is extremely difficult to obtain.

The exclusionary system has created a walled-off playground for the wealthy to get even wealthier. Generations of hard-working Americans have been told that because you are not wealthy, you are not sophisticated. You cannot handle the risk associated with great investment opportunities. You are not among the chosen few who can build wealth.

Isn’t it time we tear down these barriers?

Rhove rejects this classist system wholeheartedly. We believe it is time for a change.

We believe that wealth-building opportunities and ownership should be available to everyone.

That is why Rhove empowers you to invest in the things that matter, without all the hoops to jump through. You don’t need to be an accredited investor to own a piece of the places you love. You don’t even need to have a lot of money to invest.

The status quo tells us we shouldn’t trust “unqualified” investors. We reject the idea that people who want to own equity in their communities must meet a certain economic standard.

Rhove is the only platform that makes real estate investing easy, accessible, and social.

Join us on our mission to give anyone, anywhere, the opportunity to experience ownership and invest in the people and places that inspire them. When you are able to invest in what you love, we all flourish.

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