Following a requirement of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Securities and Exchange Commission (SEC) will consider whether to raise the income and net worth requirements for accredited investors later this year. Some advocacy groups think the current levels are too low to protect investors from fraud and risk of loss and are pushing for an increase. Rather than simply evaluating the current thresholds, the SEC should consider limiting the amount a person can invest in \u201ca single, nonpublic securities offering\u201d to a set fraction of his or her net worth. Such an approach would boost the amount of capital available to private companies, establish consistency with proposed equity crowd-funding rules, encourage investor diversification, and allow ordinary Americans to co-invest with the wealthy. More importantly, it would keep those in Washington from falsely assuming that wealth measures investor sophistication, or offers much protection against fraud or loss. In setting its rules, the SEC must balance investor protections with capital availability. Shifting to a fixed-investment approach would increase the number of people who could put money into private companies, making more capital available to those businesses. Even in the pre-crowdfunding era, surveys showed that there were nearly 8 non-accredited informal investors for every accredited informal investor. The ratio is likely larger today. The change also would make the private placement rules consistent with the SEC\u2019s proposed equity crowd funding rules, which permit non-accredited investors to make investments in private companies through online portals, subject to annual caps on the share of income and net worth they are permitted to invest. Using a fixed-investment standard for equity crowd-funding, but a financial threshold standard for private placements makes little sense if both activities involve efforts by private companies to sell equity to individual investors. A fixed-investment methodology would also motivate investors to better diversify their portfolios. Under the current financial threshold rule, nothing precludes investors for putting all of their money (less the value of their homes) in shares of a single private company. That lack of diversification places investors at substantial risk of loss. A fixed-investment standard could be designed to force investors to widen their holdings, which would better protect investors. Shifting to a set-investment-approach would also reduce inequities in the current system. Financial thresholds create groups of \u201chaves\u201d and \u201chave-nots\u201d that keep those with less money from co-investing with the \u201cone percent.\u201d By barring average Americans from making the same investments as the best-off, the current system perpetuates unequal access to financial opportunities. A fixed-investment method would end the false premise that financial thresholds protect investors. \u201cDollar thresholds have never been an accurate proxy for investor sophistication,\u201d the North American Securities Administrators Association (NASAA) recently wrote to the SEC. Because current thresholds were set with little consideration to whether they represented the actual amount of money that investors could afford to lose, adjusting them upward for inflation merely makes them inflation-adjusted arbitrary cut-offs. Financial cut-offs do little to protect investors from fraud. Fraudsters even may be more likely to target the rich since the financial returns to fraud are higher when the targets have more money. At the same time, wealth does little to improve a person\u2019s fraud detection skills. Many of those duped by master fraudster Bernie Madoff were accredited investors several times over. A fixed-investment-methodology meets the goal of protecting investors, while avoiding many of the negatives present with financial thresholds. Rather than just considering whether to raise the current accredited investor cut-offs, the SEC should reconsider its entire approach.