Your first guest was the same first guest that I had way back in 2012, Mr. Money Mustache (which was a great episode). So thats what I did! I am a massive fan of multiple streams of income, so have been pursuing side hustles for a while now. For example, I would not want to have a large portion of my wealth in a development project that was 18 to 24 months out from being completed right now. Members have access to an incredible network of nearly one million investors and real estate professionals, as well as a suite of tools designed to assist them in finding, financing, and analyzing potential investments. And one of my, and I think Mindys, big petpeeves with the real estate community is that a lot of people will go in and try to buy real estate and hope that buying that real estate will solve their financial problems. And then, two, house hack. More from the same. He married his beautiful wife with whom he resides in Denver, Colorado. real estate business from buying two houses per year to But for those who may not have heard that episode, could you just describe what house hacking is? Mad Fientist: And thats why I love these three distinct phases so much. Have you made any mistakes, or is there anything you would do differently if youre starting from scratch now? Georgeta Orlovschi: Know about Sebastian Stans Mother? So, the goal of the show is to showcase these different perspectives on finance and enable people to think outside the box of Oh, real estate is the only way to go about this or even Index funds is the only way to go about investing or frugality is the only path to financial freedom.. I was just curious if anyone has calculated there Real Net Worth as he describes it in the book. Enjoyed the podcast. But you wrote a great book called Set for Life. 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. 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. Mad Fientist: Oh, nice. So, it sounds like you havent made any sort of mistakes or youve been on such a very amazing path seemingly as soon as you got your career? Building wealth is always possible, even while working full-time, earning a median income, and making up for a negative net worth. Mad Fientist: Alright, good. We try to be a little bit more creative and adventurous with our investment and money management than maybe just passively investing in index funds. Those who fail to pay the price (in terms of hours of preparation and self-education) end up spending just as much or more time trying to resolve issues in a failing investment down the line. No, heres what I was thinking. And I think focusing on frugality at that stage absolutely is going to be the biggest impact you can have on your finances. And I got a $236,000 loan, something like that after the fees and all that. And in a good market, thats not so important. 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. Listen to the Podcast Here Watch the Podcast Here Help Us Out! Find out more about how we use your information in our privacy policy and cookie policy. Here I am today after a string of I think good decisions and good fortune accompanying them, but I look back, and Im like, Im not sure which one of those was a bad decision where I got lucky. I think they were good decisions and I got lucky if that makes any sense. Scott is an American perpetual student of personal finance, real estate investing, sales, business, and personal management. I actually enjoyed the audio version of it in the gym. Your email address will not be published. Mad Fientist: Absolutely! But hes definitely in a position where hes able to step aside and step out of the day-to-day and have a young upstart like me kind of do some [00:04:01] for him. So do you want to talk about that final step? And how does the duplex compare to the quadplex? Some of it is obviously also luck. Scott Trench is the CEO and President of BiggerPockets. SNAP Benefits: Can You Use EBT Card/Food Stamps To Purchase Hot Food. Scott Trench: Oh, Ive love it! And it contains all of the answers Ive received since I started this podcast back in 2012. 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. You made the right choice. And once you have that financial runway, moving into step two here, were trying to get to about $100,000 in investable liquidity. Scott Trenchreal estate investor, co-host of the BiggerPockets Money Podcast, and CEO of BiggerPocketsdemonstrates how to accumulate a lifetime of wealth over a short period of time. One, go find a new job. And Im also looking forward to exploring some of the strategies that he used personally to get to the stage that hes at today like house hacking and real estate investing. So, people always think that thats where they need to focus on their finances in order to achieve a high savings rate and rapidly accelerate toward financial dependence, but thats wrong. Questions About BiggerPockets & Official Site Announcements, Home Owner Association (HOA) Issues & Problems, Real Estate Technology, Social Media, and Blogging, BRRRR - Buy, Rehab, Rent, Refinance, Repeat, Real Estate Development & New Home Construction, Real Estate Wholesaling Questions & Answers, Rent to Own a.k.a. And then, the rents are about $2600 a month. So, if I kind of maintain my system of dollar cost averaging through real estate, I believe that Ill have a good result at the end. There needs to be more FI conversation for those with children. According to the author, children who don't grow up rich learn different things about managing money than wealthy children, and this may be a . Scott Trenchs net worth is estimated to be $1.5 million. 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. Thanks for the podcast! Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. Scott Trench: Yeah, you know, I had the good privilegeand this is not like an intelligence thing. But then we go into house hacking. Scott Trench: No, in May of 2012, I was graduating from college and getting ready tono, I graduated college in May of 2013. Top Money Advice for Periods of Inflation, 7 Classic Finance Tips That Will Change the Way You Think About Money. 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. As a fellow beer lover, I highly recommend you get to Colorado for a visit! And yeah, back in my poker-watching days, I remember Annie Duke very well. Poker players, at least the ones that are really good, have this really good outlook on things where theyre like, Hey, heres the hand Ive been dealt. Well, thank you so much, Scott. So I started with basically zero$3000 in savings when I started my career. And then, one day, you will have achieved financial independence according to the standard definition I guess in the FI community which is based on the 4% rule. Scott Trench: And particularly in terms of appreciation and real estate and stock markets. I invest in index funds. Mad Fientist: which is great. The College Investor does not offer investment advisor or brokerage services, nor does it recommend buying or selling particular stocks, securities, or other investments. 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. 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. Scott Trench: Well, I think we both share a lot of interest in personal finance. They help ordinary Americans build wealth and achieve financial freedom through real estate investing. 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. The author, Scott Trench, has some very wise . Im repaying the favor [00:06:47]. So theres a ton of great stuff there. Mad Fientist: Wow! Well, thank you so much for coming on the show. So, that was your first $100,000. And. Mad Fientist: Perfect! Trench has focused his career on. 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Credit Repair Explained: Should You Pay For Help? He married his lovely wife, with whom he now lives in Denver, Colorado. And theyre profitable. And if they lose, youve got to be able to not tie the result of losing that hand with Hey! Category: Books Share this article: Money Advice From Experts Top Money Advice for Periods of Inflation Like many people who are successful in the music industry, Storch became a wealthy man. 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. He has some family things that are going on. Im very excited to be here. Now, once you achieve a high savings rate and accumulate maybe six months to a year or more of this financial runway, options begin to present themselves in your life, things like you can go and take a job that pays you $40,000 instead of $50,000, but offers you a chance at a big bonus at the end of the year, or you can go work for free for an entrepreneur that you really admire and go learn a valuable skill set, or you can just take that $25,000 and invest or house hack the way I did. 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. . And shes a poker player. The next phase is getting that first $100,000. 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: One of the great things about house hacking is its a huge spectrum. Mad Fientist: Very cool. So, alongside kind of dollar cost averaging with index funds, I try to dollar cost averageand by that, I mean consistently invest, so Im not buying at the top or the bottom of the marketin real estate. Ive never been to Colorado, and I love mountains. Im going to put that book in the show notes, a link to the book in the show notes. Once your account is created, you'll be logged-in to this account. It cost me $1700. Joshua Dorkin, founder and CEO of BiggerPockets.com, joins me on the Financial Independence Podcast to talk real estate and entrepreneurship! And youre kind enough to send it to me. But thats awesome. Theres plenty of exceptions to that, and Im not discounting that. All I can do is prepare for a variety of scenarios and keep a long-term investment focus. The amount of savings I had, less my car loan payment, plus the value of my car. I believe that in a market decline, this cohort is likely to experience some pain in the form of falling prices and/or rents, but that their long-term focus, fixed interest rate debt and multiple income streams (most small landlords work a full-time job in addition to owning a few rental properties) will put them in a relatively strong position to weather a market downturn. So, those are two approaches for investing. I find social media very overwhelming. They feel that they are all politicians and wont allow the economy to slide. And thanks to Mindy for putting this together. Whats Set For Life: Dominate Life, Money, And The American Dream All About? So, I think that from a big picture standpoint, I was able to think about it in a pretty rational way and have the odds in my favor for success. Talk real estate and stock markets of BiggerPockets.com, joins me on the notes! Fientist: and particularly in terms of appreciation and real estate and markets... 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