Forfeiture
When we do something bad and have to give up something we own.
If we decide to go all Breaking Bad and cook up drugs in our house (don’t do this), then the government could seize the house as a thank-you for the illegal activity. This is called a forfeiture. Similarly, if we decide to just stop paying our mortgage, the bank can eventually take our house as well.
It’s not just houses that can be forfeited. Cash, cars, basically any property or asset we have is subject to forfeiture. If we get sued and have to cough up a hundred grand in damages, that counts. Businesses convicted of shady behavior like insider trading or funding terrorism are also subject to forfeiture. If our house or company or whatever is forfeited, we don’t get compensated for it. It’s just gone, man.
So really, if we can, we should avoid ending up in a forfeiture scenario.
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Finance: What is an Accredited Investor?9 Views
Finance a la Shmoop. What is an accredited investor. Well the difference
between an accredited college and an unaccredited college, can be like you
know the difference between Princeton, and the school of Feel Good Energy, that
your great Aunt Bertha, set up in her garage last year. Yeah different kind of [woman dancing in garage with disco ball]
college. Well accredited investors work on a
similar idea. A bunch of someone's have come along and agreed that accredited
investors, have a bunch of qualifications. In other words they're legit. So
accredited investors are simply investors, who qualify to do a certain
investment. Usually accredited means, that they have credit, or assets, or wampum, or
knowledge, like intellectual capital, instead of financial capital, or along with
both. Which means that they're big boys and big girls, who are able to invest a
large amount of money, in a risky venture. Officially they're investors who have an
income of at least $200,000 for the past two years, three hundred thousand for [checklist for investors on chalkboard]
joint accredited investors, like married people or partners, or have a net worth
of at least a million bucks individually, or jointly, or our executives, partners, or
directors of the entity issuing those securities. Meaning raising the dough
itself. Institutional investors, such as mutual funds, hedge funds, and pension
funds, also fit the bill. Additionally entities can be considered
accredited, but their threshold is 5 million bucks in assets. By the way if [man talking on lawn]
all the owners of an entity, like a law firm or something like that, are
accredited, well then the entity is considered accredited
as well. So yeah they're accredited investors. Not to be confused with a
credited investor, who is really excited to have a small part in a movie. [guy in movie theater]