How to Control $100K in Stocks with Only $25K Down With Erwin Szeto

In this episode of the Wisdom Lifestyle Money Show, host Scott Dillingham sits down with Erwin Szeto, a seasoned real estate investor, licensed realtor, and insurance professional who has built an eight-figure portfolio through strategic investing. Erwin shares his remarkable journey from immigrant child to successful investor, revealing how the book Rich Dad Poor Dad transformed his understanding of wealth-building and led him from stock market losses during the dot-com bubble into decades of profitable real estate investing across more than 40 properties.

The conversation takes a fascinating turn when Erwin introduces a game-changing investment strategy that allows investors to control stock market assets with only 25% down payment. This leveraged investing approach uses segregated funds, which are insurance-based investment products offered by Canadian insurance companies that combine growth potential with principal protection guarantees of 75%. Unlike traditional stock market investing where you must pay 100% upfront, this strategy enables investors to leverage their capital similar to how real estate investors use mortgages, potentially multiplying returns significantly while maintaining built-in downside protection.

Erwin breaks down the mathematics behind why this approach can outperform traditional real estate investing in certain scenarios. With the S&P 500 historically returning approximately 10% annually and investors only needing to put down 25%, the effective return on invested capital could reach 40% before fees, eclipsing typical real estate appreciation of 3-5%. The strategy also offers headache-free passive investing without tenant management, property maintenance, or the operational complexities that come with landlord responsibilities.

Beyond returns, Erwin highlights the powerful estate planning benefits of segregated funds. Because these investments are structured as insurance contracts, they bypass probate entirely, allowing beneficiaries to receive funds directly within days of the investor's passing rather than waiting months or years for estate settlement. This feature proves particularly valuable for first-generation wealthy Canadians planning generational wealth transfer, especially considering Erwin's observation that approximately 90% of children show no interest in managing their parents' real estate portfolios.

The episode also covers the BRRRR strategy adapted for stock market investing, where investors can re-leverage their profits to compound returns over time, similar to the popular real estate refinancing technique. With lending available up to $2 million per person or corporation and minimum investments around $17,000, this strategy offers scalable wealth-building for investors seeking portfolio diversification beyond traditional real estate holdings.