Welcome back to the Wisdom Lifestyle Money Show. I'm your host, Scott Dillingham. I've got a really amazing guest, and I'm super excited to have Erwin on. I've known Erwin for years, and we've talked about having him on. It just never happened, with our schedules.
Scott Dillingham:But Erwin has an amazing story and, an amazing product actually to talk about today. So, Erwin, first, I'd love to hear your story, and then we're going to tell people how they can qualify and acquire stock market assets with 25% down. First off, thanks
Erwin Szeto:for having me on Scott. We've known each other forever. Doing my mortgages over ten years ago. Yep. And and I love that we still continue to work together, helping people mostly invest in the stateside.
Erwin Szeto:But just briefly, I'm a child of immigrants. I don't know what it is. It's always been my nature. I wanted to get ahead in life and I always wanted to be rich. Personal finance investing has always been a personal interest and passion of mine.
Erwin Szeto:I went to business school. Sadly in business school, it taught us nothing about real estate. Yep. True story. And then when the .com bubble killed my stock portfolio, you know, I started looking more at real estate investments.
Erwin Szeto:I my girlfriend's father gave me the book Rich Dad Poor Dad and understand, holy cow I went to business school. I was like, holy cow, I did not know that business owners have all these tax benefits and basically it almost as if the tax code's written for people to run businesses, including invest in real estate. Because investing in real estate when done with as an active owner, essentially it's just running your small business. So I said, oh, this is a no brainer. And then I could do the math.
Erwin Szeto:Right? Stock market, I was expecting, you know, six to 10% returns, passive. Right? Real estate, I was underwriting only 3% appreciation, but at the time we only need to put down 20% down so I could do the math. So 3% appreciation, I'm only putting in one fifth of money, basically times five.
Erwin Szeto:So my expected return should be around 15%. So I can beat the stock market being a real estate investor. So it a no brainer for me. And then the journey for real estate investing went for quite a long time. I've owned over, I've had significant interest in over 40 properties.
Erwin Szeto:Just recently I had an 8 figure portfolio here in Canada. It's been nearly slashed in half because real estate Ontario has been very painful for me and my clients. Hence, I've been divesting and allocating resources elsewhere. I bought a house in Texas just two years ago and allocating some more money back into the stock market.
Scott Dillingham:Which is super cool. And I love that you started with Rich Dad Poor Dad because that is honestly the same way that I did too. It was a book about finance and I was interested in financings, or finances, I should say, not financing. And someone said, oh, you should read Rich Dad Poor Dad. Right?
Scott Dillingham:So I read The Wealthy Barber, and then I read that, and I'm like, wow. This is incredible. Right? And it just opened my eyes to a brand new world that I never thought. So, super cool.
Scott Dillingham:So yeah, I think it's quite unique too, that you have such a history in real estate, right? Like you said, you've built up an 8 figure portfolio. You've had vested interest in more than 40 properties. And then now you have a fantastic product for the stock market. So it's a little bit of a diversion and I'm sure it's, you know, for the better.
Scott Dillingham:And I would love to hear more about the product. I did hear you speak about it once publicly and I was actually shocked about what you had to say. And I'm like, you know what? Like, let's connect and let's let's put this out there because I think that's important. So why don't you dive into how somebody can actually acquire stocks for 25% down as opposed to a 100% down like we are used to.
Scott Dillingham:Right.
Erwin Szeto:Right. I should also mention that I've been a licensed realtor in Ontario since 2010 at Rockstar Real Estate. I've been very proud member and coach of Rockstar Real Estate Brokerage since 2010. So also I've run a team and so with my team, my clients and I, we've helped local investors transact on close to half $1,000,000,000 worth of local real estate, all investment properties, no pre construction condo. So very proud of that.
Erwin Szeto:So I make money selling real estate, specialized in investment properties. And I was literally just having a conversation with my kid cousin yesterday who's looking at buying house hacking. I'm like, don't do it. He's looking at buying a house and house hacking. I'm like, don't do it.
Erwin Szeto:Before I get into the stock stuff, quickly, I said, you know, where you're investing, not much appreciation. So the only way you make money is cash flow, but you're dependent on the tenant paying you rent. Because if they don't pay you, you are screwed. So how is this a good investment? Right?
Erwin Szeto:There's a here run some numbers. Just like I mentioned earlier, to me real estate used to be a no brainer, 3% appreciation. I know people who are listening to this are thinking more like four to 6%. Let's just split the difference, use 5% appreciation for real estate. If I was to put down Now the stock market historically, when I say stock market, I'm old school.
Erwin Szeto:I read books. I'm a big fan of Warren Buffett. Not everything he says, but keep it boring. Let's just talk about the S and P five hundred as stock market. S and P five hundred has about, you know, well over fifty year history of returning over 5010% compounded annually every year.
Erwin Szeto:It's an average, right? So if I could, and so when I learned about this, the possibility of having to only put down 25% control essentially a fund of matches the stock index, the stock market, anyone should be able to do the math. If I can earn 10% but only have to put down 25% down, basis times four. Right? So my retroactive return should be 40% and that absolutely eclipses anything you can do in real estate without having to, you know, get a mortgage, have tenants.
Erwin Szeto:Right? It's headache free because it's basically, basically every real estate investor knows. If you, you know, real estate only beats the stock market because you can leverage it. We all go to you to get a mortgage. But if you're going to cash buy investment properties, that doesn't make any sense, right?
Erwin Szeto:Just invest in the stock market, let it be headache free. So again, so this is pretty new within the last two years that it's now possible to actually borrow money to to invest in the stock market. So 75% loan to value. In turn, I only need to put down 25% to invest in essentially the stock market.
Scott Dillingham:Which is super cool. It's super cool. And you know what? You nailed it when you said that. So like during my journey of building my portfolio, I was actually really busy doing mortgages.
Scott Dillingham:And then even though I had property management and I had a team of contractors that did renovations and repairs and stuff, you're still needed. It's not as passive as you want unless you invest in share, actually. But doing it in Canada through, you know, the team that you can build here, it took a lot of time. So I actually was like, you know what? I'd almost rather invest in the stock market or or partially.
Scott Dillingham:You know what I mean? Like, diversify Mhmm. Just to make my life easier so I don't have to deal with with tenant issues. And Mhmm. You're right.
Scott Dillingham:This this does it. So can you tell us more? Like, how is it even possible to buy, you know, a $100 worth of of stocks for $25? Mhmm.
Erwin Szeto:So let me just take a step back as well. Like what you shared is actually very, very common among our clients. And for those who don't know, most people don't know who I am. Most people know who my wife, Cherry Chan, the famous YouTube accountant. She really got recognized by the stewardess on the Air Canada flight back from Hong Kong.
Scott Dillingham:That's cool. From somewhere. I know where
Erwin Szeto:you are. You saved me a bunch of money in my That's awesome.
Scott Dillingham:Super cool. Yeah.
Erwin Szeto:Anyways, so between Cherry and I, our clients are consistently feeling stuck. And when I meet with them, what I see is that almost all of them are well over 90% concentrated in real estate of their investment portfolio, their investment money, of their net worth concentrated in local real estate, generally in Ontario and and it's all residential, almost all residential. So a lot of people are not happy with that. So just even for a pure diversification play, because I don't think any financial planner in the world, the greatest financial planner in the world would never tell you to have all your assets in local real estate in one currency, one country. Yeah.
Erwin Szeto:Fair enough? Yeah. Right?
Scott Dillingham:I agree. No one would say that.
Erwin Szeto:No one would say that. So then I and so then I show them, here's an option. Like for example, the like the richest people in the world usually have a good percentage of their wealth in the stock market, at least a quarter. Right? So let's start with funny how quarter keeps coming up 25%.
Erwin Szeto:So to answer your question, how is this actually possible? Like the nuts and bolts of the investment is actually, it's to take a step back. Everyone knows what a mutual fund is. I've never, invested in them only when I was forced to through a company plan. I just never liked the fees.
Erwin Szeto:It never make any sense. Anyone who studied financial planning or personal finance knows, managed funds almost never beat the index. Warren Buffett famously had offered a million dollar bet for any hedge fund manager to beat the index. If they beat it, he donate a million dollars to their favorite charity. One person took them up on it and they lost quite badly.
Erwin Szeto:They actually lost before the end of the term. They actually gave up before the end of the term. So it's hilarious. Point is, so why would I pay more money to make less money? That's right.
Erwin Szeto:Right? Now, that's mutual funds. Now, and then when this was, when the concept was introduced to me, insurance companies have their own version of mutual funds called segregated funds. So what's different about them is the majority of those funds that the insurance company manages are they guarantee return of principal of 75%. Because these are some of the biggest companies we have in Canada, of the quality of guarantee, there are lenders willing to step up and lend 75% loan to value.
Erwin Szeto:So I can go put down, for example, I can come out of pocket, for example, dollars 25,000. I can borrow $75,000 to invest in the stock market. Now now even though I'm out of pocket only $25,000, I now control a $100,000 worth of the stock market.
Scott Dillingham:And Yeah. And I'm sorry. No. But you you just said something there that was I thought was super cool too is so you're saying they're going to guarantee 75% of the principal. So they're going to guarantee 75 k of your 100 k investment.
Scott Dillingham:So if the market crashes, let's just say, right, because I know some people are concerned with that, with everything going on. We're recording this at the 2026. Right? So you're saying 2026 that I can invest 25 k to buy a 100 k and 75 k is protected and guaranteed, essentially.
Erwin Szeto:So, yes. So you're at risk is your investment. Okay. Right? But also real estate investors need to remember this seemed to be forgotten for a while because it was just a bull run for, you know, you and I have been in for a long time, so it's been a bull run.
Erwin Szeto:It's that in real estate, you can lose beyond your investment. People are like, pre construction condo investors, for example, are learning that you can lose beyond your Here you're here, your losses are capped.
Scott Dillingham:You're right. And it's it's it's a cycle. Like, it's a cycle, but you're right. We see people that purchased in the past two years. We're seeing in certain markets, their values are less than, you know, what what they paid.
Scott Dillingham:And I can I can kind of see that maybe turning around hopefully soon? But but yeah. So we are seeing that, but it's a cycle. But I like that you have that protection because when you buy a house, nobody guarantees 75% of its value.
Erwin Szeto:Mhmm. And you've been around long enough to know as well every time there's a crash, it's probably a buying opportunity.
Scott Dillingham:Mhmm.
Erwin Szeto:Right? And I'm not saying everyone should put all their eggs in one basket, but for but I'm talking about, like, much smaller numbers than someone has to do to get into one real estate investment property in Canada. Right?
Scott Dillingham:Yeah. Now let's say let's say, okay, I wanna do this or somebody listening that's, you know, they wanna do it and maybe they've only got $5. Like, can they still do it with that little or is there a minimum?
Erwin Szeto:The minimum lend, because the lenders, you know, you're a lender, you understand. They're in this to make money too. So the minimum lend I think is, I think the total investment has to be $50,000 So that works it to like the minimum investment basically works out to be like just around 17,000. Someone has to come
Scott Dillingham:out of pocket for investment. Okay. Okay. So that's reasonable. That's definitely reasonable.
Scott Dillingham:That's, you know, a lot of, a lot of people have that. So, okay, so that's great. So then that's the minimum. And then, tell us more.
Erwin Szeto:Yeah. Again, everyone understands mutual funds. There basically is a complete other world in the insurance industry. Again, are called segregated funds. There's thousands of options.
Erwin Szeto:Right? So, but again, I'm just for easy explanation, I like to keep it simple. Let's talk about the stock market. I know many Canadians think the stock market is the TSX, which is what which would be wonderful if they had invested in the stock in the in the Toronto Stock Exchange. I believe it's up 36% in in 2025.
Erwin Szeto:So imagine if you leverage that. Right? You're talking well over And a 100% I'm not saying don't be a landlord, don't be a real estate investor. But for people, again, looking for some diversification, something that's heavy, free and passive, you know, this makes a lot of sense. And again, this is headache free.
Erwin Szeto:It's all paper based. It's also liquid as well. Here's the fun thing as You can bur this as well. Yeah. So you understands, your audience understands BRRRs or Absolutely.
Erwin Szeto:Right. So say, let's go back to my example of I came out of pocket 25,000, that's my down payment. So my total investment is a 100,000 in the stock market. Say the stock market goes up 10,000 right time. Yep.
Erwin Szeto:Now, now my return is $10,000 on a $25,000 investment. I can actually, I probably need a bit more money but I can re leverage my profits. So give it two years for example, make it $20,000 my equity gain. I can now take that 20,000 and leverage that. Right?
Erwin Szeto:Super cool. Yeah. Borrow, borrow three times so I can borrow 60,000 and redeploy now deploy another 60,000 in the in the stock market based
Scott Dillingham:on my initial investment of 25,000. That's super cool. And I know you talked high level with Jillian. She let me know. But Jillian is actually setting up people's primary residence.
Scott Dillingham:There's a lending product that allows them to turn their home into a tax write off. So she actually sets them up with that. And then with a combination of what you're doing, I actually think that would be fantastic. So you could make your home a write off. You can leverage it by these items, which you can then releverage to to buy more.
Scott Dillingham:I think it's a obviously, there's risk with every investment.
Erwin Szeto:Yes.
Scott Dillingham:And but I I can see that as a huge acceleration, like phenomenal. I actually love it. I think it's really cool.
Erwin Szeto:Yeah. And it's way it's very scalable. The lending is extremely scalable. The lending stops at 2,000,000
Scott Dillingham:per Okay.
Erwin Szeto:Per person, per corporation. So it's quite some time until you run out.
Scott Dillingham:So if you have different corps, does that still
Erwin Szeto:exclude you? Your spouse, your kids.
Scott Dillingham:Okay. Great. Okay. Super cool. So then like, how does this work?
Scott Dillingham:Obviously I'm not sorry. Yeah. No, I was just going to say like, I, you know, we're licensed for mortgages. So you must have some type of investment license, right, for to be able to offer this to people?
Erwin Szeto:Yes. And I haven't been I haven't been doing a good job of being public about it. I do have my license my insurance license. Okay. Super So again, it's part of our service to our clients.
Erwin Szeto:The thing is just like the clients that you run into, just like just like people like Jillian, people like people in our community, a lot of them are first generation wealthy. Yep. And now they have all these assets and they have kids that they want to be able to transition those assets to as pain free and tax free as possible. So they're looking for estate planning and also they're looking for alternative investments outside of real estate investing. So I have my insurance license now for that purposes and segregated funds, like I mentioned, are an insurance industry product.
Erwin Szeto:Hence, I'm able to offer them and talk about these things.
Scott Dillingham:Super cool. And I know verbally and in public, right, especially in real estate and just different things, you know, we're not allowed to quote returns. I want to make make that clear. Predicts the future. That's right.
Scott Dillingham:But I love the fact that at least there's that 75% loss protection sort of built in. I love that. And then the acceleration. Right? How, again, you could tap into your home, get just the minimum needed for this this loan to move forward, and then you readvance that.
Scott Dillingham:That's that's super cool. So I I love it. So for those that are listening that would be interested in seeing what this looks like, and actually, you know what, maybe before I ask you that last question, within the segregated funds as an investor, can I select what I'd like to invest in? Or do you select or like, how how would that work?
Erwin Szeto:There's thousands of funds to choose from. Okay.
Scott Dillingham:So you can pick and choose. Yeah.
Erwin Szeto:You can pick and choose. But, you know, like I said, Warren Buffett and and anyone can do go search this up. It's it's very uncommon for any fund to beat the S and P 500. Yeah. And also what I like about what I like about index funds is the the the expense the management expense ratio is the lowest possible.
Scott Dillingham:Yep. I learned that when I worked at the bank. They had their own mutual funds. They they wanted us to sell because it was profitable for the bank. Mhmm.
Scott Dillingham:But I well, you know, when I started at the bank, I was already a real estate investor. So, like, I knew about investing. So I was like, this is junk. I don't I don't want this. And sorry, all you banks who are hearing this.
Scott Dillingham:Mutual funds are they suck, but I would invest and still do to this very day into index funds because you're right, it's very hard to beat the market. But if you buy the market right, you can ride those returns and they have really low fees. And so, no, that's that's incredible. So I love that that product is into there because I've seen some life insurance products which force you to invest in mutual funds. And, I didn't like that.
Scott Dillingham:Right? Because it's the same thing. It's it's the fees. So
Erwin Szeto:But as soon as you add the fact that you can leverage Oh. Because only does this this side Segregated funds was introduced to me years ago, but I had no interest because the fees are high. Yep. But because the fees are high, I can leverage it because the insurance feature is built into the product. Yep.
Erwin Szeto:Oh, and I should also add because the insurance feature is built into the product, it acts the, it investment as acts like insurance as in it bypasses probate. So for example, your beneficiary, when say when I pass, my segregated funds are liquidated, the loan is paid off, my my my beneficiary will have cash in days.
Scott Dillingham:Love it.
Erwin Szeto:So, yeah. I love it. Yeah. And what else? Yeah.
Erwin Szeto:And again, anyone listening to this for example, and again I'm running into this all the time. Again, have I have 350 past clients in real estate investing. What I'm also finding is about 90% of the kids do not want anything to do with their parents' real estate portfolios. I'm talking about them, I'm talking about local real estate investors that is.
Scott Dillingham:Yeah. That makes sense.
Erwin Szeto:Right? You if you told the kid, here's a portfolio that's going up twenty, thirty, 40% a year, that's not providing you any headache.
Scott Dillingham:Yeah. You do nothing. You just just don't cash it out and and ride the wave. Yeah. I like that.
Scott Dillingham:So what we've got a we've got a wrap up because I tried to keep these short. But so somebody who's listening to this, and we'll put the details in the show notes as well. So if you're in the car and you can't take this down, but how should they reach out to you? What's going on? I know you've got an event coming up to that potentially people could join.
Scott Dillingham:So do you mind sharing how people can contact you and maybe a little bit of details about this event?
Erwin Szeto:My website's infinitywealth.ca. When we thought of the website, you know, the Avengers was all the rage. Let's hopefully off the Infinity Gauntlet. Yeah, so infinitywealth.ca. My name is extremely unique.
Erwin Szeto:You can find me on social media and then all my links are there as well. We do have the wealth summit coming up on Saturday, January 31. My wife, my much more popular wife will be presenting on estate planning, same with myself. A lot of lessons learned from I've done over 40 paid consultations around estate planning and wealth planning, so sharing a lot of lessons learned from there as well. Also we a special guest, Lizzie Kinsey, who has gone through She has a family business and she actually wrote a book about how it was to the transition from taking over the family business when her father passed, including the real estate portfolio and how it's not that easy.
Erwin Szeto:So it's you know that saying more money, more problems? That's that's something that everyone that in general, I don't think people have thought enough about it. I'm still shocked how many people I meet who do not have a will and yet they have children, right? So, you know, we're going to cover some of the basics, we're going cover some of the advanced topics around estate planning so that people can, you know, again, make more money and just as importantly transition as much as that as possible to their kids.
Scott Dillingham:That's awesome. And then, I think you said your in in person is sold out, but people can still purchase the online tickets. Is that right?
Erwin Szeto:Correct. Yeah. Okay. We always warn people that the in person sells out usually in days and and it does. Anyone who wants to attend virtually or get the recording, if they just buy the virtual package, they'll and and I think we're offering for, like, under $30 so they can buy a virtual ticket, they'll get the recording.
Erwin Szeto:Yeah.
Scott Dillingham:That's very fair.
Erwin Szeto:I said, it's very fair.
Scott Dillingham:It's the cost of a book and then but but you're covering topics that are much more valuable. Yes. You know, so that's that's incredible. So
Erwin Szeto:Yeah. Like anyone wants to try to meet with their accountant, try to get to try to meet with them, have a have a three hour meeting with them for less than $30. Good luck Yeah. To
Scott Dillingham:exactly. Love it. No, that's awesome. Well, thank you so much for joining us, Erwin. I'm so glad that we could do this and, you know, spread spread the news about this product.
Scott Dillingham:I think it's incredible. Like I said, when I saw you present on stage, there was I think the room had probably 80 investors in it. I I don't know precisely, but I saw that and I'm like, this is an incredible product. Like, this is awesome. So thank you so much for sharing it on here with us.
Erwin Szeto:Thank you, Scott. Like you, thank you for letting me share this on your platform and I look forward to doing much more mortgage business with you in the future.
Scott Dillingham:No worries. Thank you so much. Okay. Good.