But if the bar for traditional investing is that high, what happens when we move into the world of alternative investments?
From hedge funds and private equity to art, wine, and yes—even trading card games—alternative investments come with their own complexities. They’re typically less liquid, harder to value, and often operate outside the strict boundaries of public market regulation. That’s why access to these types of investments usually comes with enhanced due diligence and eligibility requirements.
Let’s walk through what it takes to qualify to invest in alternatives—and why these requirements exist in the first place.
🧾 Enhanced Financial Profile & Accreditation
Before participating in most alternative investments, an individual must meet specific financial thresholds. This is known as being an accredited investor, which often means having a consistent six-figure income or a net worth exceeding $1 million (excluding your primary residence). Higher-tier investments, such as some private equity funds, may require qualified purchaser status—signifying even greater wealth and experience.
The reasoning is straightforward: alternative investments are riskier and less regulated. Regulators and issuers want to ensure investors can weather losses without jeopardizing their financial well-being. In some cases, third-party documentation (like a letter from a CPA or attorney) may be required to verify that an investor meets these thresholds.
🧠 Investment Knowledge and Sophistication
Alternative investments aren't just about having money—they're about understanding what you're getting into. Investors are expected to demonstrate a grasp of concepts like lock-up periods (how long you can’t access your money), capital calls (additional funds requested over time), and the potential for complete loss without recourse.
Being familiar with terms like “PPM” (private placement memorandum) and “prospectus” isn’t optional. The burden of understanding falls on the investor. The less oversight and disclosure an investment has, the more critical it becomes that the participant has experience and judgment to match.
🧩 Suitability and Behavioral Considerations
Beyond wealth and knowledge, investors must evaluate whether alternatives are appropriate for their personal goals and psychological risk tolerance. Can you lock up capital for five or more years? Are you allocating a manageable portion of your overall portfolio? Are you pursuing growth, diversification, or tax strategy—and do those goals justify the risk?
Firms don’t just want to know what you can afford. They want to understand what’s suitable for your situation. This often includes a detailed review of liquidity needs, financial objectives, and personal capacity to handle prolonged uncertainty.
📃 Legal & Compliance Acknowledgments
Engaging in alternatives usually means signing a stack of disclosures. These confirm you understand the nature of the investment, including:
- Its illiquidity
- Its fee structure
- Redemption limitations
- The absence of typical investor protections
In many cases, investors must acknowledge that they are not relying on the firm for legal or tax advice, and that they accept all associated risks. Depending on the investment vehicle, compliance checks (including OFAC screening and anti-money laundering assessments) are also standard—especially for international or pooled investments.
🔄 Product-Level Due Diligence (Investor Side)
Even if you meet the qualifications, you're still expected to do your homework. Investors are typically responsible for reviewing offering documents, understanding fee waterfalls (how profits are shared), and grasping fund mechanics—such as who manages the asset and what role you play as an investor (e.g., general partner vs. limited partner).
Additionally, alternatives often provide limited reporting, such as delayed valuations or K-1 tax documents. Investors must accept that their access to information may be irregular and that real-time pricing or public tracking may not exist at all.
📉 The Speculative Nature of Alternatives
All of this adds up to one reality: alternative investments are speculative by nature. This means they’re characterized by high uncertainty, significant volatility, and a very real possibility of losing your entire investment. Unlike traditional securities that trade on public exchanges with transparent pricing and regulation, speculative assets often rely on perceived value, subjective demand, and niche markets that can turn quickly.
Speculation isn’t inherently bad—but it demands respect. And many new entrants to the TCG space are unaware that the behaviors they mimic from influencers often lack the grounding, strategy, and due diligence required to handle real risk.
⚡ Coming Soon: A Checklist for TCG Investors
In the next part of this series, we’ll bring it all together and build a structured checklist for TCG investing—one that mirrors what’s required to open and qualify for real investment accounts. The goal isn’t to gatekeep. It’s to help passionate collectors understand what it truly means to invest—so that when they choose to participate, they do so with clarity, purpose, and an honest awareness of the risks involved.
Stay tuned.
⚠️ Important Note
This post is for educational and informational purposes only. It is not a recommendation or solicitation to invest in any security, asset, or collectible. Before making any investment decision, you should consult with a licensed professional who can evaluate your unique financial situation and help you create a plan that aligns with your goals and risk tolerance.