Scott Trench: No, I was just finding these weird financial ratios. But as long as I can find a property that cash flows in a sense where I basically have a very, very good odds at having long-term $500 to $800 a month plus in cashflow on a $50,000 to $100,000it may not be the best cash in cash return, but I do believe that I can see some solid appreciation over a 30-year holding period in Denver. Click Manage settings for more information and to manage your choices. So, Im trying to buy one every 12 to 18 months and just sustain that system. Its like a 1% interest rate. He also published his book First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes in 2021. His net worth is estimated to be $1.5 million. However, like Scott said, it is absolutely critical to keep positive cash-flows (rents must cover mortgage payments + HOA + property tax, with backup plans, like moving in to the property yourself), weve seen people end up having to sell in down market when losing the job or can no longer subsidize the negative cash flow, therefore cannot reap the long term appreciation or refinance to lower rate, etc.. All Right Reserved. Unemployment is likely to remain low simply due to the fact that the minimum wage is so low, giving the Fed wide room to run in tackling inflation again, what I like to refer to as their first enemy. The couple frequently shares photos of themselves on social media. You have to live there until things appreciate or rents go up, or the property goes up and you either have to be able to sell it or live there happily. He is also a real estate investor, an executive at a large online corporation, salesman, real estate broker, and author. I mean when you talk about average American household spending, 33% of that, the biggest chunk of the pie is going to be in housing, 17% is in transportation, 13% is in food. Yeah, Ill put a link to the first episode in the show notes. They both live in Denver, Colorado. So, I always end all my interviews with one piece of advice youd give to somebody whos starting on the path of FI. And I wanted to do a little bit more than maybe invest in index funds again which is kind of a standard 8% to 10% long-term average return. Enjoyed the podcast. . She and her husband interviewed me in #26. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). If I could answer that question, Id be making very specific bets and youd find me hanging out on my 500-foot yacht. Im going to bet on that and go with that. And thats the correct decision to make in that game. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). I think it starts with a basis in frugality, but then theres an aggressive investing component. Its good to make those mistakes early. I want to say it was probably November or December of 2013 is when I actually listened to your show and got this all kicked off. Who Gets Institutional Merit Grants At Private Colleges? Ive listened to probably half of the episodes so far. But I think a lot goes into putting yourself into position to be lucky. Scott Trench is a perpetual student of personal finance, real estate investing, sales, business, and personal management. They have nothing to fall back on. Ive been recording this podcast since 2012 and at the end of every interview, I always ask, Whats one piece of advice youd give to someone pursuing financial independence?. So, the final step I think is it goes on forever basically. And that is where I became interested in real estate and started listening to Bigger Pockets and becoming a fan of the company there. He serves as the CEO of BiggerPockets.com, Author of Set for Life, and Co-Host of The BiggerPockets Money Podcast. Thanks for taking the time to read this post and thanks Scott for writing such a good book. There needs to be more FI conversation for those with children. And so, thats the biggest hack that I can think of, like the biggest trick that a median income earner can do on the side to drastically cut their expenses, and then automatically put yourself in a position to have a significant cash flowing asset after a year or two. Its in my opinion as a saver who was able to accumulate a year of financial runway within a year, that was a risky career because I knew that I was not going to have any chance to live up to what I deemed my potential to be. Mad Fientist: Yeah, you mentioned in the book, youre like, Turn your biggest expense into an income-producing asset, and I think thats really powerful to think of it that way. So that would be cool to read that. And thanks to Mindy for putting this together. And the mortgage is about $1700. I know its a really hot real estate market these days. So theyre investing from a position of financial weakness and using some form of creative finance which is kind of, for a new investor, often a code word for extremely risky leverage and not investing from a position of financial strength. But if youre starting from that point, you dont really have the option of going out and starting a business because youre working full time and starting a business is hard work and unlikely to be successful on a part-time effort in the short run. I bought my last property in June 2017. Scott Trench was born in the United States in September 1990. Scott Trench is the CEO and President of BiggerPockets. Scott Trench: But well get her to rap on one of the future ones coming up. A lot of these investors have enjoyed well over a decade of rising prices. Joshua Dorkin, founder and CEO of BiggerPockets.com, joins me on the Financial Independence Podcast to talk real estate and entrepreneurship! And its about putting together a plan that makes the most sense to you based on the perspectives of smart people who have been there and that resonate with you. Accumulating a lifetime of wealth in a short period of time involves working harder and smarter than the average person, and Scott Trench--investor, entrepreneur, and CEO of. Your email address will not be published. If Im (Fed Chairman) Jerome Powell, my task is clear: Beat inflation. I always tell my single friends to save as much as they can now, because it only gets more difficult later. And if they lose, youve got to be able to not tie the result of losing that hand with Hey! Yeah, this could be your biggest expenseespecially if youre renting or if you go out and buy your dream home right out of college like some people. Now, of course, you cant make any bets in the first place if you have no wealth and spend all that you earn. Im on a lot of social media, but I dont ever check them. He has used many of the strategies outlined in the book to build his own real estate portfolio. Ive been doing the same in Denver (and CA & MI) for the last 20 years and it has allowed me to retire at 46 with sufficient income from the rentals. Yeah, can you describe that again? He is 31 years old. This is whyI was already fairly frugalThis is why Im saving. Oh, that was a bad decision to bet there. No, it was a good decision. And thats when I found your show, some time in that timeframe. And. Category: Books Share this article: Money Advice From Experts Top Money Advice for Periods of Inflation It cost me $1700. Scotts estimated net worth is $1.5 million. And yeah, hopefully, Ill speak to you soon. Cheers! So, thank you for that. Suppose that youre making $50,000 a year, if you save $500 a monthwhich is actually a pretty good savings rate. If you message me there, I usually get back to everybody within a day or two. And once you get to $100,000 in investible liquidity, now how you invest that money begins to become really important. Throw all your additional cash into index funds, model it out using whatever percentage return youre comfortable with. Im very excited to be here. A lot of people will go with something in the 8% to 10% return range for index fund investing over the long term. Its not to save the economy to support the Biden Administration. Cash obviously, but what else would apply as a real asset? So, if you spend $40,000 per year, if thats your target goal, and you have $1 million in index funds or wealth in general in your portfolio, youre likely to sustain that in perpetuity. Scott Trench: Sure! And my book is written for a very specific audience. Total Audience Reach (Twitter, Instagram, YouTube and TikTok). Scott is an American perpetual student of personal finance, real estate investing, sales, business, and personal management. And youre kind enough to send it to me. I have a very sizable chunk of my money in index funds for that exact reason. Just search my name in the search bar, Scott Trench. And now that Im there, I guess I technically lean FI, but I have more work to do if I want to get to the point where I can support maybe an upper middle class lifestyle in a good school district and a family one day. But having that thing that youre working on as youre trying to reach financial independence, then hopefully, by the time you reach it, youll have something there that youre really passionate about and that you can spend a lot of time doing. Thats true for the average and the median American, but not popular to point out. Scott Trench is a perpetual student of personal finance, real estate investing, sales, business, and personal management. Ive never been to Colorado, and I love mountains. And thats a Corolla. So, the goal of this show is to say, Hey, real estate is one part of a strong portfolio. And I believe it makes sense for many people. But what youre talking about is turning that into an income-producing asset instead. Although his salary was less than $50,000, Trench took on an aggressive saving strategy and had enough to put a down payment on a $240,000 duplex in just a year's time. The thing I liked most about the book was that he broke the journey to financial independence down into three distinct stages, each with their own focus. It has really motivated my fiance and I to take the next steps towards financial freedom. After high school, Scott enrolled at Vanderbilt University where he earned a Bachelor of Arts in Economics and History in 2013. Any investing information provided on this page is for educational purposes only. Scott Trench: Oh, Ive love it! I definitely still have some work to do to get to there. What Are Qualified Expenses For A 529 Plan (And What Doesnt Count)? Fun, entertainment, healthcare, insurance, all of that falls into that last third. One, go find a new job. And the reason for that is because they have no cushion. Trench is the author of the 2017 book Set for Life. Mad Fientist: And you could do it while youre on the clock. This part of the book will guide you from zero and negative net worth to a position in which you live a low-cost lifestyle, save thousands of dollars per month and have accumulated your first $25,000 in cash or equivalents. Thats great. Being a parent changes the game. That's the topic of today's show, where we sit down with Scott Trench, author of Set for Life,to discuss some of the simple yet powerful, tactics people can use to increase their income, reduce their expenses, and lead a legendary life. I think I take all of the thunder for the weird or funny, whatever you want to call it, activities there by telling very lame, bad jokes on each episode, or asking the guests at least. This is what I want to do with money. What Is A 529 Plan and Where to Open One in Your State, How Much Should You Have In A 529 Plan By Age, How To Use A 529 Plan For Private Elementary And High School. Mad Fientist: Thats cool! David Greene shares the exact systems he used to scale his Another approach that I also use is real estate investing. And then, the rents are about $2600 a month. So, some people are starting from a position where they already have a good $25,000 saved up through whatever fortune, whatever theyve done previous to this point. Scott Trench's net worth is estimated to be $1.5 million. The author, Scott Trench, has some very wise . Mad Fientist: Wow! And then, two, house hack. So thats what I did! Bigger Pockets Money podcast did a show about this recently. It just didnt work out. I plan to buy a fourth by, if not by the end of this year, by the end of 2018, by at least kind of spring 2019 to just kind of continue my system. You could drastically change your life for the better. Also, you have nothing to invest, so you cant get a higher return on your invested dollars if you have nothing to invest. Rich Dad Poor Dad: 20th Anniversary Edition. Hes doing some amazing stuff, which Im really excited to talk to you about. Im not so sure. 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