Ready to make the big leap from Robinhood to a well-known hedge fund like Citadel and Bridgewater Associates? Well, hold on a minute because there’s something you should know…

You can’t just go online and open an account with one of these firms the same way you can with Vanguard or Fidelity. Generally, to become an investor with a hedge fund and private equity firm, you have to prove that you qualify as an accredited investor.

What’s an accredited investor? The U.S. Securities and Exchange Commission defines one as someone with either:

• A net worth over $1 million, excluding your primary residence (individually or with spouse or partner)
• Income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year

Basically, the idea is that if you’ve been able to attain such a high level of wealth up to this point, then you’ve probably got the knowledge, skills, and experience to make prudent decisions about whether or not to invest with these types of financial institutions.

This isn’t necessarily financial discrimination. A lot of it has to do with how these investments are structured. Without getting too technical, when someone hands their money over to a hedge fund, they essentially become a business partner of the entity. Obviously, there are a lot of legal and tax implications that come along with such a partnership that go beyond buying a few shares of common stock.

The good news is that even if you don’t qualify as an accredited investor, who cares? You can still be financially savvy and build a massive net worth just by practicing good money management and systematically making smart contributions over time. Half the time these exclusive investments don’t outperform retail investments anyway.

My favorite story of this is Warren Buffett famously made a bet back in 2008 with a hedge fund that they couldn’t beat the S&P 500 index. Ten years later he won by a landslide – the S&P 500 was up 125% while the hedge fund only gained 36%. That should give you some insight into just how much better a simple strategy can work over an unnecessarily complicated one.