Money Expert: I Have a $10M Net Worth — 5 Ways I’d Get It Back If I Lost It All
Written by
David Nadelle
Edited by
Rebekah Evans
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Real estate mogul, creator of the Legacy Investing Show and a GOBankingRates “Top Money Expert,” Preston Seo is on a roll. By helping people unlock their financial freedom through generating cash flow through real estate earnings, Seo has amassed a huge social media following and built an impressive net worth in a short time.
Seo’s road to riches origin story is a good one. Walking away from his $250,000 software sales job to start a career in real estate, Seo took a risk and started investing in the potentially profitable, passive revenue-generating income that Airbnbs can provide.
Today, Seo’s Airbnb portfolio makes him $400,000 a year and his real estate is worth in excess of $10 million. But what would he do if had to start all over again? In a recent Instagram post that starts with “Here’s what I’d do today if I lost it all,” Seo laid out how he’d regain his wealth in five steps and how you could too.
“This isn’t just my story, it could be yours too,” he said in a YouTube video. Here’s the five steps Seo would take to get his fortune back if he lost it all.
Transfer 401(k) Funds to a Self-Directed IRA (SDIRA)
When Seo left his multi-six-figure career to focus on real estate investing full-time, he decided that to take control of his life, he had to take control of his money. “A Self-Directed IRA lets me put money into real estate, private equity, crypto and gold instead of being stuck with basic funds,” he said.
Transferring your 401(k) into a self-directed IRA (SDIRA) will give you control of your financial future and could result in a higher rate of return. However, they aren’t without their concerns, including a lack of liquidity and excess of rules associated with alternative assets and a higher potential for fraud, according to the SDIRA experts at The Entrust Group. Hidden fees by companies managing your 401(k) or IRA erode 63% of your savings over 50 years, according to Seo. But there’s a chance you could pay higher fees with a SDIRA too.
Create a 12-Month Emergency Fund Using High-Yield Savings
An emergency fund or safety net is a separate savings account set up to cover living expenses in the event of an unexpected financial cost, such as a job loss, medical emergency, unforeseen house repairs or car trouble. It can provide you peace of mind and is a better option than borrowing money, using credit cards or withdrawing funds from a retirement account.
Experts recommend having at least three to six months of living expenses in your emergency fund, but that will depend on your unique financial situation. “Stack cash for stability,” Seo said. “I’d save six to 12 months of expenses in a high-yield account like Wealthfront — earning 4% APY while keeping my money safe.” The best high-yield savings accounts can earn well over 4%, but make sure to research fees and terms before committing.
Use SDIRA To Purchase an Airbnb
Seo notes that Airbnb units perform 10 times better than traditional rentals. “I’d sublease a rental and turn it into an Airbnb, bringing in $2,500 per month without owning the property,” he posted on Instagram. “A virtual assistant would run it so I only work an hour a week.”
Invest $33 a Day in Bitcoin
Although it’s considered a form of currency, most crypto holders use the digital dough as an investment, believing in its future as a portfolio diversification asset and its potential for high returns. Seo uses River to auto-invest $33 a day into bitcoin. That comes out to just under $1,000 a month.
While that is an admirable goal, most Americans simply don’t have that kind of cash available to invest in a highly volatile asset. However, Seo’s intent is sound; you should bankroll regularly into something that will earn you money. And you own crypto, you should figure out whether to sell or HODL (Hold on for Dear Life) right now.
Use a 50/40/10 Spending Budget
First popularized by Sen. Elizabeth Warren and her daughter, Amelia Warren Tyagi, in their 2005 book “All Your Worth — The Ultimate Lifetime Money Plan,” the 50/30/20 (needs/wants/savings) budget rule provides a conservative framework for people to follow and is still relevant (and debated) today.
Seo turned this convention on its head, allocating 50% of after-tax income to investments, 40% to needs and a 10% sliver to wants. Most people have the income to build wealth but it takes discipline to actually do it. “Eliminate distractions. No bars, no vacations.” Seo mentioned in an Instagram post. If your goal is to make money, sacrificing the wants by cutting your expenses profoundly is essential.
More From GOBankingRates
