In The United States, an accredited investor is someone who has a net worth of at least one million dollars, excluding the value of their primary residence, or has income of at least $200,000 a year for the last two years or $300,000 together with a spouse, with the expectation to make at least as much every year going forward.

Once you become an accredited investor, you’re now allowed to invest in certain types of private investments, which are usually less liquid, potentially more risky, and sometimes more complex than public equities and bonds. These investments include: private equity, venture capital, angel investing, limited partnerships, and hedge funds.

I’ve written consistently about how I think an adjusted gross income of roughly $200,000 – $250,000 is the ideal income for maximum happiness due to the maximum you can put away in a SEP-IRA or Solo 401k, a more agreeable federal tax level, less persecution by the government, a more digestible AMT, and enough income per individual to survive happily anywhere in the world. Now we can include being an accredited investor as yet another reason to shoot for $200,000 – $250,000 in income.

One of the 10 misses in my 2014 year in review post was missing out on some great investments. I truly believe there are fortunes to be made every single day if we look hard enough. The problem is, we all get busy with our lives and don’t really bother.

Part of the reason why investors hand their money over to professional money managers is so that they at least know someone is spending their working hours trying to make them money, even if it is for a fee. The busier I get, the more amenable I am to farming out more money to people who pick stocks for a living. That said, I’ll never stop chasing unicorns.

Take a look at a pretty sweet infographic created by Motif Investing on some of the most profitable investment ideas of 2014. We’ll then discuss some investment lessons at the end of the post. The benchmark comparison is the S&P 500, which has returned roughly 13% YTD.

At long last, Lending Club went public recently with an estimated $5 billion market cap. It’s the first really big new generation fintech IPO, and boy is it going to make a lot of people a lot of money. To give you some perspective, at a $5 billion market cap, Lending Club is ~$1.3 billion larger than Yelp! I’ve been following both Lending Club and Prosper since their inception as their offices were right next to mine in downtown San Francisco.

In 2013, I finally decided to invest some money into P2P lending with Prosper to see what the fuss was all about. I had a friend working at Prosper at the time who helped teach me about the market place and the company over several lunches. I’ve written a post on tips for P2P borrowers from a lender’s perspective, a post highlighting the P2P lending returns by borrower rating and credit score, and how P2P lending can even get a little addictive due to the ability to pick and choose who gets to borrow your money.

I was relatively gung ho about allocating several hundred thousand dollars to P2P lending, but I didn’t because I still wanted to do more research given I expected rates to stay low and the stock market to outperform as a result. I also ended up buying another house, so I only invested several thousand in P2P lending as a result, and basically ignored the account for much of the year until now.

MY EXPERIENCE WITH PROSPER ALMOST TWO YEARS IN

Here’s a snapshot of my current performance: 

A 7.43% overall return isn’t too shabby for 2014 given the stock market has returned about ~9% over the same period. I’m a very conservative investor with P2P lending since it’s only been about two years of actual investing. As a result, I pretty much invested in A and AA Prosper Rating borrowers along with several B Ratings to get some juice.

After spending 13 years in equities on Wall Street, I’ve been able to personally speak to some of the most successful institutional investors around on how to invest and manage money. The one consistent piece of advice I always hear is to invest in long-term trends and forget about the day-to-day minutiae. For example, shorting/underweighting Japanese equities since the late 1980s and going overweight commodities in the 1990s have been great winning decisions.

As a result of my experience working with successful fund managers, I weaned myself off of trying to constantly trade around the market after the NASDAQ burst and have been focused on long-term, idea-driven investing ever since. I’ll always have a Unicorn Fund to punt around for the next multi-bagger stock, but the fund is always less than 5% of my net worth or 10% of my entire equity exposure.

Motif Investing is a fascinating company based right here in the San Francisco Bay Area. I’ve been following them for the past couple of years after they raised a $25 million round of funding led by Goldman Sachs in 2013, won the Finovate Fall 2013 and Finovate Spring 2014 “Best In Show,” and raised another $35 million round in 2014 led by JP Morgan. Motif Investing makes most of its money off transactions (trades) when you buy or sell one of their “motifs” based on an investment idea you have. They might also expand into the money management business as well.

A motif is essentially a basket of 30 stocks you can invest in, which are aimed to profit from a specific idea or underlying theme. Let’s say you think new housing construction is going to quicken in the US next year. You could buy a housing motif which might contains Lennar, KBH, Home Depot, Bed, Bath, and Beyond, Zillow, and more in various weightings. Given my focus on buying winning long-term ideas and ignoring the short-term volatility, I really like Motif’s value proposition for retail investors.

When the Japanese bombed Pearl Harbor, my grandfather was there to serve as a Captain in the Army. During the Vietnam War, my father also served in the Army and was sent overseas to be a stockade prison guard in nearby Thailand. Then there’s me. A man who did not carry the family tradition of serving one’s country. I felt unworthy.

I wanted to join the US Foreign Service to help America in a more diplomatic way, but I felt too stupid to pass the Foreign Service Exam, so I did not try. One of the duties my father had while serving at the State Department in Washington D.C. was to be an oral exam examiner. He shared with me stories of the difficulties in making it through.

I’ve discussed a lot about having money guilt in the past, and I think part of my guilt comes from not being able to serve our country as my father and grandfather have done. A part of me is driven to make up for my lack of contribution by helping people with their personal finances. Money is a means to a better life, and I hope to make some sort of difference.

It’s an atrocity that there are homeless veterans in America. The government needs to do more to make sure that every single veteran finds a job when they come home. The private sector has to take the lead as well. If there are veterans out there who would like to share their story or become a writer for Financial Samurai, shoot me an e-mail.