A 36-year-old who built a seven-figure net worth shares how she invested her money and her current portfolio (2025)

"My old diving coach asked if I wanted to dive in a show — not exactly Cirque du Soleil, but similar — on a cruise ship," said Waresmith, who earned a full athletic scholarship to BU for springboard diving. "Eventually I said yes, and that was my first job real job after college."

The biggest perk of the gig was free housing and food, allowing her to save enough money to put a down payment on her first property.

Waresmith, now 36 and based in New England, started a digital marketing career after her stint as an aerial acrobat. She eventually left corporate America in 2023 to run a financial education company, Wealth with Tess, after amassing a seven-figure net worth between her various investments. BI verified her net worth and property ownership claims by looking at account screenshots and property records.

"I definitely didn't make a million dollars in my day job and I didn't get here overnight," said the financial educator, who is on a mission to help young women learn to invest. But she put her money to work from an early age. "It was consistency over time."

How she invested her way to seven figures: Real estate and the stock market

In 2013, after accumulating five figures in savings from her cruise ship gig, Waresmith invested in real estate and the stock market simultaneously.

"I bought a very small single-family property in Tampa, Florida — that was my first real estate investment — but I also wanted to invest in the stock market because diversifying was really important to me," she said. "I was aware of the risks of investing to some degree and I wanted to put my money in different places in case one of the investments didn't do as well."

Real estate

Her first real estate deal cost $84,000, she said. She put 20% down, or about $17,000, and filled the property with a long-term tenant.

"I had more money to put down, but I bought a smaller property under my budget so that when things went wrong I had money to spend on repairs," she said. And plenty went wrong: "The roof went, I had plumbing issues. I had pretty much every major issue you can have with the property in the first few years, so I was really grateful for that caution entering that property."

While her first rental didn't cash flow, it appreciated enough in value to help her buy a second property in 2018: a condo in Salem, Massachusetts.

"After 2010 was a really good time to buy real estate after the market went down, so the property created a lot of equity for me over the few following years. I was able to eventually refinance, pull out some money, and then invest in another property," said Waresmith. "That really is a good illustration of how powerful real-estate investing can be as a strategy: Even if you're not cash flowing, you can still be appreciating."

She eventually refinanced her property in Tampa and pulled out cash to purchase her first multi-family, a duplex in Massachusetts, in 2020. She moved into one unit and rented the other to offset her mortgage. That strategy, known as house hacking, "allowed me to save quite a bit of money, and a lot of that money I invested in the stock market," she said.

The stock market

Since Waresmith was dedicating a lot of time to her rental in Tampa, she initially hired a financial advisor to invest her stock market money. It was "a huge mistake," she said. The steep advisor fee ate into her returns. Plus, "I didn't have an active role in how my money was invested, and it was in specific types of funds that are very expensive."

As she learned more about investing in the stock market by reading books like "MONEY Master the Game" and "The Simple Path to Wealth," she realized the most effective investing strategy — parking her money in low-cost index funds — was so simple she could do it herself.

She stopped working with her advisor and built her own portfolio consisting mostly of index funds.

Her current portfolio: real estate, index funds, individual stocks, crypto, and cash

Waresmith has continued to diversify her portfolio over the years.

"My favorite is index funds because you get to buy a whole bunch of stocks at once," she said. "But then there are other ways to diversify within the stock market and also outside the stock market. That's what I've tried to do with real estate, crypto, and the syndication."

Real estate: 5 units and a syndication

As of July 2024, Waresmith owns five units spread across three properties: a single-family home in Tampa and two duplexes in Massachusetts.

She prefers long-term rentals, which tend to be less hands-on and less risky.

"With short-term rentals, there's certainly a lot of work that goes into that, you have high turnover, and your property is sometimes getting a lot more wear and tear," she said. Still, managing long-term rentals takes work, which is part of the reason she's content with a smaller portfolio.

"I think there's a misconception around real estate investing that you have to have 300 units to be successful," she said. In her case, the first deal she did was "a total game changer and allowed me to invest more in the stock market. So you don't have to have a lot of units for it to make a really positive impact on your life."

While her goal has never been to have dozens of units, she's prepared to jump at the right opportunity if it presents itself. Until then, she's content with her five-unit portfolio.

She also did her first syndication deal, in which a group of investors pool together their capital to purchase a single property, in 2023 after becoming an accredited investor and eligible for this type of investment.

Waresmith noted that it's a much more passive strategy than managing rentals: "I check out the deal and make sure it's something that feels good to me, and then when I invest the money, I'm hands-off. I'm not involved in the day-to-day decision-making of the property, but, as an investor, I get to benefit from investing in the larger unit properties."

The stock market: index funds and individual stocks

Waresmith prefers index funds because "it's such an easy way to get exposure to the whole stock market," but a small portion of her portfolio, less than 5%, is in individual stocks.

"In general, my perspective on investing is that longer-term investing strategies, whether it's the stock market or real estate, is one of the best ways to reduce your risk," she said. "We have to expect as investors that the market is going to fluctuate. 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."

Crypto

A small percentage of Waresmith's portfolio is in riskier assets, including bitcoin and ethereum.

"It's a very speculative investment," she said. "It could be very valuable, but we really have no idea."

Cash

As of July 2024, Waresmith has six figures in cash. She's planning ahead for some upcoming home repairs and is considering swapping one investment property for another by doing a 1031 exchange.

It's also a great time to have money in high-yield accounts.

"High-yield savings accounts are getting a strong return, so I feel more compelled to hold money in cash right now," said Waresmith. For example, Ally, which she banks with, is offering a 4.2% APY.

"I think if the high-yield savings account rates were a little bit lower, I might not be holding as much."