And Erin Chase is an expert grocery shopper. I just found your podcast and Im really enjoying it. Theres a lot more factors. 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. I wish that people knew that real estate investing is a double-edged sword. Congratulations again on the promotion and the book. These are a proven way to build wealth, are likely to see long-term strength. Now, of course, you cant make any bets in the first place if you have no wealth and spend all that you earn. . Thanks for the podcast! Mad Fientist: Yeah, this is a long time coming. I think that, sadly, those at the highest risk are middle-class American homeowners. . You can change your choices at any time by visiting your privacy controls. So how did you get interested in real estate? Advertiser Disclosure: Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. So theres a ton of great stuff there. So, I think theres a couple schools of thought. That's $1 MILLION. So, those are two approaches for investing. I started my investing adventure as a pimple-faced 22 year old when I bought my first house/investment with $22k and that has laid the foundation of my FIRE journey in my 40s. Shop Pay is an innovative payment solution developed by Shopify. And then, they both were co-hosts on my show with me on episode #38. 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. At one point, Scott Storch's net worth was estimated at $100 million. A lot of people will go with something in the 8% to 10% return range for index fund investing over the long term. This is it!. Being a parent changes the game. 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. Click here to listen on iTunes. You have no ability to even attempt to put yourself to put some money on that or take the shot on that new career or whatever. So, once you have a hundred thousand dollars in investable liquidity, if youre spending less than $25,000 or $30,000 a year, by definition, that means you have years of financial runway, years of the ability to go and take advantage of opportunities, or just simply the cash to make a meaningful investment, at least relative to your spending. And then, two, house hack. I dont remember. So, not only are you not spending money on that big, major expense, but youre actually earning money from it which obviously is going to get you to that $100,000 a lot quicker than the normal person. 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. So, yeah, Bigger Pockets Money Podcast. The amount of savings I had, less my car loan payment, plus the value of my car. I bought it in northeast Denver, and things worked out. And I also have a quadplex now that I bought as a regular investment property. Im going to put that book in the show notes, a link to the book in the show notes. One of my favorites which will be coming out soon is with David Greene whos a real estate investor. Scott Trench is married to his lovely unnamed wife. Calculate your FI date and graph your progress to FIRE for free in the Mad Fientist's FI Laboratory! I was interested in that line of work, but I didnt want to be tied to it for 40 years. Scott is the CEO of BiggerPockets.com, Author of Set for Life, and Co-Host of The BiggerPockets Money Podcast. Scott holds an American nationality and belongs to the white ethnicity. Hes doing some amazing stuff, which Im really excited to talk to you about. Thats another good thing. The mortgage is currently $1400 because I refinanced. In it, Scott Trenchwalks through his "investment philosophy," a simple, customizable plan that has allowed him to build wealthat record speedall in less than ten years. Scott Trench: Sure! Are they easier to manage initially? $2,650 at NET-A-PORTER. Scott Trench: I live in another duplex doing the same thing. So what would yours be? Denver, Boulder, Longmont (stop by and say hi to Pete), and Fort Collins are all full of excellent breweries. And yeah, youre 27 and youve done a ton of crazy, amazing stuff so far. Im going to bet on that and go with that. And thats the correct decision to make in that game. But if youre able to start increasing that savings rate, you accumulate this cushion, this what I call financial runway and set for life which allows you to live without the need for wage-paying work on that. It has really motivated my fiance and I to take the next steps towards financial freedom. I think that the best type of real estate investments to make in 2022 are the same as theyve always been: plain, vanilla, long-term rentals comprising single-family rentals and small multifamily rental properties like duplexes, triplexes and quadplexes. It will also teach you how to live a happy, healthy, and fulfilling life . Cash obviously, but what else would apply as a real asset? Mad Fientist: And you could do it while youre on the clock. Thats great. So, I think thats where our friendship kind of kicked off, a pretty similar mindset on life and finance and real estate in general. So, thank you for that. You can click on the 'unsubscribe' link in the email at anytime. Its putting money in your pocket every month. DO NOT Sell My Personal Information. House hacking for life!! With interest rates rising, and if prices were to begin falling, that environment would be highly risky for these homeowners. And I think for that median income earner starting with zero, its with that savings position. So one of the problems that a lot of people have I think when it comes to finance is theyre unable to take any risk whatsoever. You run out of money and you have to go and find similar paying work as your only option. I would have been FI in my 30s. Over the weekend, Adams appeared to double down on the remarks on Twitter. On todays show, Im excited to introduce Scott Trench from BiggerPockets.com. What do most people not know about real estate investing that you wish they knew? We both have kind of a similar approach to money in general. And thats why I really like how you laid out the book, is because its like, Okay, you may not have that much money to invest and you may feel like its a long way out. And any time Mindy gives such a glowing recommendation for someone, I definitely check them out. So theyre not even recognizable by name, the companies? Mad Fientist: Very cool. He is also a real estate investor, an executive at a large online corporation, salesman, real estate broker, and author. Scott Trench: But yeah, that interest in personal finance is kind of what spurred my ability to save and the accumulation of my first $20,000 to $25,000 for me. Its been a whirlwind since then. And thats hopefully when you make all your mistakes and learn all those lessons. 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.. 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 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. Scott Trench: Yeah, and I think a dollar saved is better than a dollar earned because of that tax advantage. 'A lot of people are angry at me today but I haven't yet heard anyone disagree,' he told his 867,000 followers. And I believe that by the end of next yearso thats the end of 2019that Ill be able to get approximately $925 to $1000 per unit, plus I can pass on the utility fees to the tenants. So lets dive in! Thats really important for investors, because the Feds dual mandate is to keep both inflation and unemployment low. Thanks for taking the time to read this post and thanks Scott for writing such a good book. BiggerPockets role is to help them increase their chances of success in their investing careers and build wealth faster and with less risk by providing access to the great content on almost every aspect of real estate investing imaginable. Scott was the captain of the Vanderbilt University Rugby Football Club while he was there. I just think its lower odds of success than maybe focusing on savings first. I think a 50% percent savings rate kind ofget to a median income, and then get to a 50% savings rate. You can download a free copy there. Rich Dad Poor Dad: 20th Anniversary Edition. 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. Probably worth a listen. Scott is married to his beautiful unidentified wife. He is the founder and CEO of BiggerPockets.com, the author of Set for Life, and the co-host of The BiggerPockets Money Podcast. 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?. I had the good privilege to discover this personal finance movement and have it make sense to me very early on, and then just kind of dive in or read it. Dont get into real estate investing if you arent willing to invest the time up front to learn this business. So yeah, I really enjoyed it. But when youre putting yourself into a position to take advantage of opportunities, and you do have options, and you do have that buffer (like that first $25,000 that we talked about), and youre able to take advantage of things that other people cant, and then yeah it may look lucky after the fact. Im now working very long hours and trying to figure out how to grow the company and all that kind of stuff. Who Should Read Set For Life: Dominate Life, Money, and The American Dream? They help ordinary Americans build wealth and achieve financial freedom through real estate investing. Scott Trench: Its been going pretty well. Scott Trench: Yeah. I managed to lose money because I knew better than the market about this couple of Chinese stocks that had more cash than market cap and I dont know. And youre kind enough to send it to me. So thats not scalable. I downloaded an audio book version of his book, Set for Life, and I really enjoyed it. I am a massive fan of multiple streams of income, so have been pursuing side hustles for a while now. This has been a big party for many years. Yeah, Ill put a link to the first episode in the show notes. Just search my name in the search bar, Scott Trench. But I didnt realize that passing those first two stages, my first $25,000 and my first $100,000 gave me so many more options and so much more power to make that journey quicker and more enjoyable. I just finished up @Scott Trench book Set For Life. This doesnt work so well when I have a family. But then we go into house hacking. Lease Purchase, Lease Options, Tax Liens, Notes, Paper, and Cash Flow Discussions, Private Lending & Conventional Mortgage Advice, Real Estate Guru, Book & Course Reviews & Discussions. 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. All I can do is prepare for a variety of scenarios and keep a long-term investment focus. But its very exciting, and its like the perfect world for me because I just love Bigger Pockets. One, go find a new job. I have a very sizable chunk of my money in index funds for that exact reason. His net worth is estimated to be $1.5 million. Total Audience Reach (Twitter, Instagram, YouTube and TikTok). But you wrote a great book called Set for Life. Another approach that I also use is real estate investing. SNAP Benefits: Can You Use EBT Card/Food Stamps To Purchase Hot Food. Scott Trench is a perpetual student of personal finance, real estate investing, sales, business, and personal management. Funded by the U.S. Department of Agriculture and administered at the state level, SNAP benefits 11 Companies That Will Help You Pay Off Student Loan Debt. And I think I can read my opponents as well as I can to feel comfortable with those odds and set myself up. And both Mindy and I are a little bit morehow do I describe it? 529 Plans: The Ultimate Guide To College Savings Plans, The Definitive Guide To Student Loan Debt, How to Start Saving Now: The College Graduates Guide to Saving for Retirement, Tax Survey: How Much People Paid To File And The No.1 Tax Software They Used, Side-Hustles To The Rescue: Survey Shows 86% Stressed About Money & Inflation, 75% Of Students Would Still Choose To Work Even If They Didnt Have To. I invest in index funds. Since joining BiggerPockets in 2014, Scott has authored the bestselling wealth-building book Set for Life and joined Mindy Jensen as co-host of the BiggerPockets Money Podcast. But also, a dollar saved, at least a dollar of lifestyleyou know, if you can reduce your average monthly spending by a thousand dollars, thats better than increasing your average monthly income by a thousand dollars for a couple reasons. Scott Trench: And particularly in terms of appreciation and real estate and stock markets. Information about his parents and/or siblings is not available at the moment. If I ever make it out to Scotland, Ill have to come and check it out. It cost me $1700. Scott Trench: Yeah, I got promoted to president of Bigger Pockets maybe last Tuesday I think. I bought a house in Edinburgh and Ill definitely be able to do house hack in the short feature with the prices in this city. Nice episode! Id say for young people who start today, house hack is one of the best ways to get to FI, especially since young people can take in roommates (itd be impossible for families w/ kids). So, my major mistakes are going to be things like I bought a brand new Toyota Corolla in 2014, kind of before I really wrapped my head around the whole personal finance thing. Even starting with zero savings, you can go from a five-figure income to six figures, from an active job to passive income, then finally to the ultimate goal . Joshua Dorkin, founder and CEO of BiggerPockets.com, joins me on the Financial Independence Podcast to talk real estate and entrepreneurship! David Greene shares the exact systems he used to scale his People doubling their income in a corporate type situation, its not heard of. It wasnt in the nicest area. . Start tracking your own financial progress with these money management apps. I find social media very overwhelming. But I think a lot goes into putting yourself into position to be lucky. Theyre unable to take advantage of opportunity. But you model it out, and you just throw all of your excess cash into a big pile. And your boss was on the show, Josh Durkin. Szane Scott Trench Coat. And if you can house hacklike me, I house hacked close to work, so I could bike to workyoure able to eliminate basically 50%, lop off half of your expenses, in one single investment. Fun, entertainment, healthcare, insurance, all of that falls into that last third. Its just that the math doesnt work like that. And once you get to $100,000 in investible liquidity, now how you invest that money begins to become really important. This is a conventional mortgage brokernot a friend, not a family member. If you dont have that option, then you are stuck. You may not be able to change your lease, you may not be able to start biking to work tomorrow. The couple posts a lot of their pictures together on their social media account. Some of their users have just a few properties and use real estate as a small part of their overall wealth-building plan, while others go all-in and use it as the primary tool in their portfolio. 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