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- Tess Waresmith advises prioritizing stock-market investing over real estate for ease and growth.
- Waresmith, a financial educator, emphasizes learning the basics of low-cost index funds for wealth.
- Her diversified portfolio includes rental units, index funds, individual stocks, and crypto assets.
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Tess Waresmith's first major investment was a small single-family home in Tampa, Florida. She put 20% down on the $84,000 property and rented it to a long-term tenant.
She simultaneously hired a financial advisor to invest some of her savings in the stock market.
If she could go back, Waresmith says she would've prioritized stock market investing — specifically, buying low-cost index funds — over real estate.
"I wish I had learned more about investing in the stock market because it is so much easier than investing in real estate," she told Business Insider. "It feels super overwhelming, but you actually don't need a lot of money to start."
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Nor do you need a lot of time or expertise.
"I think there's a lot of myths that it's going to take years to learn or you need an economic Ph.D. You can learn the basics of investing in index funds in a few weeks," she said — and it's a highly effective way to build wealth.
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Waresmith, 36, left a career in digital marketing in 2023 to run a financial education company. Thanks to prudent investing, including real estate and stock market investments, she's built a seven-figure net worth, according to account screenshots and property records viewed by BI.
As of July 2024, her portfolio consists of five rental units, a real-estate syndication, index funds, individual stocks, and crypto. Diversification is a core part of her strategy, which is part of the reason index funds are her favorite investment. "You get to buy a whole bunch of stocks at once," she said.
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It's also a relatively safe way to put your money to work.
"We have to expect as investors that the market is going to fluctuate," said Waresmith. "We can't possibly know what's going to happen in any given year, but we know that over time, the stock market goes up. The average return is roughly 10%; you could subtract for inflation and use 8% or 7% if you wanted to. And so the best strategies are to buy and hold a diversified portfolio and you can do that in a wonderful way with index funds."
Waresmith, who coaches women specifically on how to grow their wealth, recommends beginner investors start with low-cost index funds. Skip the financial advisor — she said that hiring a professional was a mistake she made in her 20s — and, instead, spend a couple of hours learning about how index fund investing works. Two books she read early in her financial independence journey were "MONEY Master the Game" and "The Simple Path to Wealth."
"Take ownership of your money. Because, at the end of the day, even if you have somebody good managing your money, no one's going to care about it more than you do," she said. "You work so hard for that money. You spend 40-plus hours a week working hard for that money and zero hours managing it. Investing in the stock market is such an opportunity to grow the money that you've worked so hard for without spending more effort."
Read next
Watch: 6 simple investing tips for beginners
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