Accredited Investors - The Athens cashflow club - Meeting 20

Although our usual presentations have a more practical orientation and they are including concepts that are applicable in Greek market, ...in areas such Real Estate, Stock Market, and Business, today's presentation has a different character... ...it focus on areas that we are NOT allowed to invest. The law prohibits cetrain investments to ordinary investors and these are only available to Accredited Investors. (AI) Why this is happening its actually the subject of today's presentation. Whatever questions you might have keep them for the Q&A section... ...at the end of this presentation. Please take some notes if you like but again keep your questions for the end. One last thing to have in mind is that in this presentation we will introduce some Finance terms. We will not go into details on this since this is an introductory seminar. (Nick, this one goes from left to the right?) (Fixing a small last minute technical problem) (Beginning of presentation with Club's badges and music) First thing first. Why we should have an interest on investments that the law doesn't allow us to participate? Let’s see after who are these High Net Worth Investors that are called "Accredited Investors". I don’t think there is an exact translation of the term "Accredited Investors" in Greek, since there is not an exact equal term here. Next we will cover what kind of investment are Accredited Investors into, and of course why these investments are not allowed to ordinary investors. Finally we will have our Q&A session and I will try to answer as many of your questions I can. Ok let’s see why we should care. One thing is that we will have a better understanding of Investments Triangle. As many of you might already know there is a well known triangle that is call the Maslow's Triangle, on which we can find... ...the hierarchy of human needs. It starts with the basic biological needs and gradually goes way up to needs for self-fulfillment. Somehow the same principle applies to Investment Triangle. To make it simple let’s say if your parents taught you as a fist lesson to start savings... ...then for sure your next lesson is not to be involved in Futures trading or Forex as an example. Every level comes with a certain experience and requires higher and higher skills. So everything is under an Investment Triangle. The part we will cover today goes to the top of this Triangle. By watching this presentation you'll be able to have a better understanding of what we are actually "teaching" in HCCA... ...which is the difference between to be "Rich" and be "Financial Independent"... ...since most of us we are mostly looking to achieve in life is to be Financial Independent. Which is boiled down to not depending only on our jobs income first... ...and to be Rich after. To be Rich is the second part of our goal but always requires the first part to be achieved. It not possible to be Rich if you are not Financially Independent. The final reason is clearly to understand our Club games which is the well known Cashflow 101 and Cashflow 202 (Rich Dad's Games). You ll better understand the Fast Track cycle of the game since this is exactly where the Accredited Investors making the bulk of their money. So let’s see who these Accredited Investors are. "AI" as a short form for the purpose of this presentation. The legal, statutory framework around the term AI started in USA with the US Securities Act of 1933/ codified 15 USC / 27-05-1933. In this statue included who is considered AI, what are the obligations of AI against various financial institutions and vice-versa, etc. Generally speaking an AI doesn't need the legal "protection" of an ordinary investor since he has the knowledge and the necessary capital for such investments. The logic behind the law here is that such combination of knowledge and capital on behalf of an AI is more than enough... ...to protect himself, and no further legal protection is necessary for him. (A member of the audience adding some comments at this point, but all of them turns to be part of the remaining presentation)!!! Two AI categories are: 1) Individuals with Net Worth of at least $1,000,000, annual income $200.000 or family income $300,000. 2) Corporations the limits are $5.000.000 AND all of their shareholders must be AI as individuals as well. Similar laws are in place in few jurisdictions other than USA. In EU there is the Pan-European Professional Client Classification. (MiFID=Markets in Financial Instruments Directive 2004/39/EC) (apl 2007/11/01). In UK we have the Certified High Net Worth Individual. (FSMA Financial Services and Markets Act 2000) (applied in 2004/01/01). We are seen most of European countries have a significant lag of 70 years after USA to form a law on this subject. Other jurisdictions like Pacific Rim countries, Australia, New Zealand and Japan have passed similar laws. Canada also have passed laws for AI. Now we have some non official sub-categories for AI. This are not part of a specific statue but they are important because some companies are offering... ...investment products based on those sub-categories. We have Low-End AI with Net Worth between $1 mil -$5 mil, Mid-Range AI with $5 mil -$30 mil and High-End AI with more than $30 mil. Here as an example we might have a company that will not offer an investment to an AI with $3mil based on their marketing group... ...but cases like this are rare and most of the companies due to competition are following the general minimum rules.