Credit Sesame interviewed James Seo as part of its 11 Money Questions series asking personal finance questions most people don’t like to ask.
1. How old are you and what is your yearly income?
I am 24 years old and my yearly income is about $200,000.
Financial success came quickly to James. He is a popular influencer who produces videos on a variety of platforms. That visibility has allowed him to attract sponsorship deals from several brands. Combined, these comprise most of his income.
Right now, James says about 70% comes from brand deals and 30% from platforms.
A potential downside of such quick success is that it can be hard to sustain. However, James is confident that he can keep the money flowing in. I’ve done this for a year now. Every month has been consistent. If you’d asked me a year ago, I’d have had doubts about how stable it would be. But now that I’ve been able to do it pretty consistently I’m more comfortable with it.
Though James is confident in his continued success, he isn’t taking it for granted. He is saving money, and looking to grow his business pursuits.
As rewarding as his brand and platform efforts have been, James plans to diversify by cultivating other sources of income. I want to expand into other things so I’m not just dependent on brand deals. The biggest thing is I want to come out with a clothing business. That’s something I want to have going on in the background even while I keep doing my videos. Also, YouTube Shorts is coming out with a monetization program in February that should give me another income stream.
Being single and having no one else to support, James has total freedom to plot his own financial course. He thinks there can be a time and a place for discussing financial plans with a significant other, but he’s not there yet.
I don’t see the need for it if you’re just dating. Maybe at the point where you’re going to move in together or get married. If you want to make a lifetime commitment, it’s probably important then.
In the meantime, James relies on his own ideas and efforts to make the most of his financial opportunities.
2. How much is your rent or mortgage?
James is a college student, and despite his high income he has found the the type of cost-effective solution for living off campus that many students would envy.
My rent currently is $385 a month. I live in Orem, Utah. Things are pretty cheap here, and I live in a house with a bunch of roommates.
While he’s satisfied with his living arrangement, James is thinking ahead to owning property. He views it not just as a place to live, but also as an additional income source.
I think my first property I’d like to be a primary residence for myself but also rent out some rooms to people to help with the mortgage. After that, I’d like to get into AirBnB arbitrage – you know, buying properties and renting them to AirBnB guests instead of having long-term leases. I like the idea of getting income from other properties.
For now though, James is content to stockpile savings until mortgage rates come down. It’s just a waiting game. I’ve been sitting on a lot of savings because I don’t want to buy anything with mortgage rates so crazy this year.
Despite his elevated income, James faces an obstacle to buying a home that is common to many young adults: his credit and employment history may be too limited for him to qualify for a mortgage on his own. I might have to get my parents or someone to cosign the loan because I don’t have the type of income history that looks good for credit.
3. What’s the last thing you purchased?
The last thing I purchased was this fairlife protein shake.
Even for less modest purchases, James is careful not to buy things he can’t afford. I would never use credit unless I have the money to pay it back right away.
4. What do you spend the most money on?
I probably spend the most money on clothes. It’s a problem.
James says this in a lighthearted way that shows it’s a problem he has firmly under control. While he may occasionally splurge on his clothes habit, he’s careful not to spend more than he can afford.
Mostly though, I don’t think you should buy something unless you could pay for it several times over. I think people make the mistake of spending everything they earn. I may be guilty of that sometimes, but I think saving is so important. A lot of times people get their paycheck and immediately blow it on something.
5. What kind of car do you have? How much is your monthly car payment?
My car is a 2018 Tesla Model 3 and my monthly payments are about $700 a month. I bought it used because the prices were way too high for new ones. The used ones were more in my budget.
New cars tend to depreciate as soon as their first owner gets behind the wheel. That often makes used cars a better bargain.
The choice of car James made was based on two distinct sides of his personality. One is that he likes to keep a finger on the pulse of popular trends. The other is that he is pragmatic about money. His explanation for buying a Tesla: I always thought electric cars were cool, and it’s a better long-term investment.
When it comes to financing cars, consumers often find it convenient to let the dealer arrange a loan. However, this doesn’t always get them the best loan terms. James got his loan through the dealer, but not without doing some comparison shopping first to make sure the terms were competitive.
I did look around a little bit, but the dealer had a great rate for me.
6. What’s the most expensive thing you own?
The most expensive thing I own is probably my Tesla.
When it comes to insuring his prize possession, James’ made a practical decision common to young adults. His car is insured through is parents’ auto policy. It’s a lot cheaper that way, but I’ll probably have to get off their insurance soon as I get older.
Auto insurance companies vary with respect to how long they permit an adult child to stay on a parent’s policy. In general, this can be a money-saving approach for adult children who still live with their parents or are students.
Piggy-backing on a parent’s insurance policy can give a young adult time to build up a safe driving record. It can also give them time to establish a favorable credit score. Like a person’s driving history, credit history can often influence insurance rates.
7. How much do you have in savings?
I have about $100,000 in savings.
Here, James is well ahead of the curve for his age group. According to the Federal Reserve, the median household asset value for Americans under 35 is just $40,700.
Obviously, his high income helps. But it also matters a great deal that James has made savings an immediate priority. This has allowed him to accumulate that $100,000 in savings very quickly. It took probably a year to build that up. Maybe six to eight months.
In fact, his savings have grown so quickly that James hasn’t figured how to invest it yet. That’s one of my weak points. It’s just sitting in a bank account right now, but I need to talk to someone about doing something more active with it.
While James recognizes the importance of putting his money to work with investments, he maintains a healthy skepticism about the type of investments he wants to pursue.
I think there’s a lot of get rich quick schemes nowadays, like with the whole cryptocurrency world. I’ve seen a lot of people fail at that kind of thing so it makes me more cautious. I’ve seen more people succeed in real estate so I think that’s a little more reliable.
8. Do you have student loans? If so how much?
I don’t have any student loans.
James recognizes that he’s at an advantage not to have to rely on loans to finance college, as well for being able to earn money in a non-traditional way. I’m definitely privileged not to have loans. In college it’s hard to work while you’re going to school. It’s a lot of hours for not much money.
9. Do you have credit cards? If so, how many?
I do have credit cards and I think I have around four.
There are different types of credit cards, and looking to take advantage of different credit card characteristics has shaped how James has chosen his cards.
I mainly got my first one because I was right out of high school and it was a student one so I could get it easily. Then I got a travel card because I started traveling a lot. When I got a loan from my bank, they offered me a credit card so I added that one. I also have a Creator Card. Different scenarios led me to getting different credit cards.
With his range of credit cards, James chooses which to use according to how he’s spending the money. My main one that I use is the Delta Sky Miles card because that gives me points for traveling, and I travel a lot.
10. What’s one of your financial goals?
One of my financial goals is to have about $30,000 coming in every month passively.
Passive income is money from investments that a person doesn’t have to actively work to earn. Because there are limits on a person’s time, adding passive income to ongoing active earnings can be a key to building wealth.
James plans to continue to pursue and expand his career as a content creator and representing brands. But his goal of adding passive income to the mix is why he has his eyes on eventually investing in real estate. It would be awesome to have multiple properties bringing in that kind of income. It will probably take years to get there, but that’s the end goal.
11. What’s your credit score?
My credit score is around 755 and I verified that using the Credit Sesame app.
Young adults often have trouble building credit. With a strong credit score at age 24, James is a case study in how to build credit quickly and successfully.
First, James started to establish credit early. He got his first credit card when he was just out of high school.
Then he began using credit regularly. But here’s the key: he also made a habit of quickly paying off his credit card balances.
I pay them off in full weekly. Sometimes every couple days. I think I get that from my parents and family. My parents are penny pinchers. They are Korean and very traditional in that way. So I’m very careful with how I use credit. I’ve never missed a monthly payment.
Those credit habits help his credit score in two ways:
- Payment history is the most important factor in credit score. By using credit regularly and making each payment on time, James has established a strong payment history.
- By paying his balance off quickly and in full, James has made sure that only a small portion of his credit limits is typically in use at any one time. Keeping credit utilization low is favorable for credit scores.
James keeps an eye on his credit score, but he doesn’t set specific goals for where he wants it to be. He’s confident that maintaining good credit habits will do the job.
As long as I’m doing the best I can to pay stuff off quick, I know it will be good.
You may also be interested in:
Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.
