My odds of success of winning this hand based on what I know are 70%. 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. Youre now president of Bigger Pockets which is huge. Its unlikely. The rents there are $800 per month on each of the units. Whats Set For Life: Dominate Life, Money, And The American Dream All About? Who Gets Institutional Merit Grants At Private Colleges? Scott Trench. Scott Trench: Yeah, I got promoted to president of Bigger Pockets maybe last Tuesday I think. In 2021, he also released his book First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes. Rising interest rates are likely to impact cap rates on properties, which will compress values and limit exit and/or refinance options. So was that your first property then, the duplex in Denver? But its funny because I hear these people, theyre like, Oh, Im very well into FI. Have you enjoyed it? And their market cap is $50 million. Its putting money in your pocket every month. Scott is the CEO of BiggerPockets.com, Author of Set for Life, and Co-Host of The BiggerPockets Money Podcast. Scott Trench: Oh, Ive love it! July 8, 2022, 4:00 AM Scott Trench Scott Trench is the author of "Set for Life," CEO of BiggerPockets and co-host of the "BiggerPockets Money" podcast. It just didnt work out. Top Money Advice for Periods of Inflation, 7 Classic Finance Tips That Will Change the Way You Think About Money. Listen to the Podcast Here Watch the Podcast Here Help Us Out! Scott is of white ethnicity and has American citizenship. And thats hopefully when you make all your mistakes and learn all those lessons. I could continue living in that property happily forever, I could sell it at a gain alongside all the other homeowners in the area, or I could rent it out. Scott Trench: I live in another duplex doing the same thing. So the best place to find me is actually on Bigger Pockets. 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.. What do most people not know about real estate investing that you wish they knew? 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. Advertiser Disclosure: Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. But you model it out, and you just throw all of your excess cash into a big pile. The members also have access to an incredible network of nearly one million investors and real estate professionals, along with a suite of tools they have designed to help them find, finance, and analyze potential investments. Scott Trench CEO of BiggerPockets.com, Author of Set for Life, Co-Host of The BiggerPockets Money Podcast Denver, Colorado, United States 5K followers 500+ connections Join to follow. Scott started acquiring more properties as he worked with Josh and later became such a crucial part of the BiggerPockets family, he was promoted to president. So, that was your first $100,000. And if people want to find you, wheres best to find you online, just go to Bigger Pockets? And I got a $236,000 loan, something like that after the fees and all that. I was interested in that line of work, but I didnt want to be tied to it for 40 years. Ive never been to Colorado, and I love mountains. 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. I think that the two things that come into play there are going to be entrepreneurship, asset creation, and then investing. Its hard to see how unemployment can increase right now in a meaningful sense when the minimum wage is this low. 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. I was just curious if anyone has calculated there Real Net Worth as he describes it in the book. Scott Trench: Yeah, I think thats huge. You dont have to be a superstar investor when you dont have much to risk luckily. But theres also this whole realm of entrepreneurship. Thats another good thing. So, we are interviewing people that have expertise in one of these areas or niches in these areas or stories that embody this kind of approach, so that people are not pigeonholed into one type of investing or one type of real estate. And thats when I found your show, some time in that timeframe. 'A lot of people are angry at me today but I haven't yet heard anyone disagree,' he told his 867,000 followers. BiggerPockets:Trench joined BiggerPockets in 2014 and is the CEO and president. 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. By layering philosophy with practical knowledge, Set for Life gives young professionals the fiscal confidence they need to conquer financial goals early in life. And that the step after financial analyst two of course is financial analyst 3, then senior financial analyst, then finance manager, senior finance manager, director of finance, senior director and so on, all the way up to CFO of a Fortune 500 company. So, house hacking as I define it is buying a piece of investment real estate that will make sense as a rental property, as a cash flowing rental property for you after you move out; or otherwise, using your housing to build wealth. So, I think that youre absolutely right to have a passion project, whether its personal finance-related stuff or a podcast or a blog or a project or a business in something else that you just want to work on with your free time. Scott was born in September 1990, in the United States. . Well, thank you so much for coming on the show. Was wondering when someone would come out and say this. 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. So you were my gym companion for a good week or two. Mad Fientist: Alright, good. Im not so sure. So, thats one plan. I also observe that the federal minimum wage has not increased since 2010 we have the lowest real minimum wage in this country that weve had in nearly 50 years, since the 1940s and 1950s. I think that investors in those types of projects are assuming a tremendous amount of risk interest rates could be far higher in 18 to 24 months than they are today, and that can depress prices, or make it difficult to refinance the property or investment down the line. 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Credit Repair Explained: Should You Pay For Help? Who cares if its underwater in terms of you owe more than its worth as long as its cash flowing? While there, Scott served as a captain of Vanderbilt University Rugby Football Club. Go find a career or an opportunity that you believe offers you the potential to scale, but will not allow you to lose money on a monthly basis. Like many people who are successful in the music industry, Storch became a wealthy man. I dont remember. So the only criteria that I have that I think that you should really kind of strictly enforce is: Will this property make sense right now?, the day you buy it as an investment property if you dont live there. Personal Finance Forum Real Net Worth (Scott Trench model) Steve Schneider Investor Sherwood Park, Alberta Posted May 24 2017, 09:08 Hi everyone, I just finished up @Scott Trench book Set For Life. . Scott Trench: There were some rapping involved in that show. You can click on the 'unsubscribe' link in the email at anytime. Trench is the author of the 2017 book Set for Life. Required fields are marked *. Its about a little over 10% of your savingsthat means you spend around $4000 a month. Mad Fientist: Absolutely! And I think focusing on frugality at that stage absolutely is going to be the biggest impact you can have on your finances. Start tracking your net worth with Personal Capital using our link. What are the best types of real estate investments to make in 2022? I find social media very overwhelming. There needs to be more FI conversation for those with children. Scotts estimated net worth is $1.5 million. 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 . 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. If I ever make it out to Scotland, Ill have to come and check it out. Our opinions are our own. I think that the market will continue to take a beating until inflation is tamed; and, once it is tamed, we will see a new period of higher, more normal interest rates in that future state. He married his beautiful wife with whom he resides in Denver, Colorado. By clicking Accept all you agree that Yahoo and our partners will process your personal information, and use technologies such as cookies, to display personalised ads and content, for ad and content measurement, audience insights, and product development. I interviewed her and her husband in episode #14. So I was able to basicallyfrom a big picture perspective, I think that Ive been able to at least avoid any major mistakes. He is also a real estate investor, an executive at a large online. This is in an expensive marketwere not able to accumulate anything. Bigger Pockets Money podcast did a show about this recently. Before I go, I just wanted to remind you that I went back through all of my previous episodes and collected the answers to my final question that I always ask: Whats one piece of advice youd give to somebody on the path to financial independence? And I put all the answers into a free PDF that you can download. Rich Dad Poor Dad: 20th Anniversary Edition. And hopefully, Ill make it out to Denver one of these days and say hello. The math is telling us that the biggest parts of your spending are in housing and transportation. And I encourage people to go out and think about adding side hustles one at a time as theyre going down this path. Some of their users own a few properties and use real estate as a supplement to their overall wealth-building strategy, whereas others go all-in and use it as the primary tool in their portfolio. And Ill see you next time. Mad Fientist: Very cool! I really appreciate it. Scott Trenchs net worth is estimated to be $1.5 million. When (if ever) do you think the real estate bubble we are in will burst? So lets dive in! For example, if I were single, I could rent out my spare bedroom in my house. When I started on the road to financial dependence, thankfully, I was already in stage three. 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. So, my question was, Has she rapped yet? because she is actually a really good rapper. And Im plenty happy doing what Im doing and kind of continuing along with things. One, youre accumulating that all in savings which is 100% gain because its after tax savings that youre accumulating. He spent a few months and some more of his savings to renovate the building before moving in and finding tenants, officially beginning his house hacking journey. Mad Fientist: And you could do it while youre on the clock. Scott Trench: Yeah, that was my first property. So I started with basically zero$3000 in savings when I started my career. Building wealth is always possible, even while working full-time, earning a median income, and making up for a negative net worth. Well, the reason is because Chinese companies all the timeI dont know about this one in particularlie about their financials. Probably worth a listen. So my first job was at a Fortune 500 company as a financial analyst 1. Scott Trench: Sure! 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. The author, Scott Trench, has some very wise . So, the goal is to go from a year of financial runwaywhich is a very modest goal that you can grind out over maybe a year to eighteen months depending on where youre starting from, what your income is, and where your expenses are, to a goal that has a lot less certainty. real estate investing strategy that makes financial freedom 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. So, do you think you stumbled upon it shortly after it was published or was this something that happened a little bit later. But two, youre decreasing the amount of money that you need to produce financial runway. 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. Scott Trench: Get to a 50% savings rate. Youre also not likely to get a big raise at your job at work within the next year. So you have no financial runway. Scott Trench: One of the great things about house hacking is its a huge spectrum. . Mad Fientist: Yeah, yeah. And I think that goes right along with what I just said before, its about increasing your odds of success, but understanding that some things are out of your control alongside that. 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. The identity of Scotts wife is not known to the public. The couple frequently shares photos of themselves on social media. Scott Trench: You know, she hasnt wrapped yet. 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