I published that episode way back in May of 2012. Once your account is created, you'll be logged-in to this account. Mad Fientist: Wow! Also getting some buy to lets in Glasgow, all with the funds from the limited company I run as a software consultant. What about equity in rental properties or home equity lines of credit (extremely cheap money that can be used as a down payment for more properties). So you were my gym companion for a good week or two. There needs to be more FI conversation for those with children. Scott Trench is a perpetual student of personal finance, real estate investing, sales, business, and personal management. A lot of people will go with something in the 8% to 10% return range for index fund investing over the long term. You dont have to be a superstar investor when you dont have much to risk luckily. 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. 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. At one point, Scott Storch's net worth was estimated at $100 million. But youll need about $48,000 to finance your $4000 a month lifestyle. If you lose your job, youre screwed! 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. And both Mindy and I are a little bit morehow do I describe it? We go into just incredible personal stories. Scott Trench: Yeah, I rarely do this, but I just read a book that Im raving about lately called Thinking in Bets by Annie Duke. The first $25,000 was focused on frugality and cutting expenses. Theater of popular music. And once you get to $100,000 in investible liquidity, now how you invest that money begins to become really important. Scott Trench: I live in another duplex doing the same thing. 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. Early life and C. Amanda Moye Brown: Do you want to know about Wes Browns Wife? document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Chart Your Progress to Financial Independence! Kin Shriner is an actor from the United States. And so, I put down 5% with an FHA loan. Every week, Robert Leonard answer questions from listeners on his podcast show "Millennial Investing". 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. On todays episode of the Financial Independence Podcast, Im joined by the president of biggerpockets.com and cohost of the BiggerPockets Money Show, Scott Trench! A rare picture of Scott Trench with his wife. Scott breaks down the journey to financial independence into three stages and explains what you need to focus on at each step (and why)! I definitely still have some work to do to get to there. Congratulations to you! Scott Trench: So, after the other expenses that went into maintaining the property and fixing some things up myself, I was probably breaking even or maybe paying a little bit out of pocket to live on a monthly basis. We, AOL, are part of the Yahoo family of brands. And what caused her to come to me and say, Hey, you needed to talk to this guy? This is what I want to do with money. Yeah, no, absolutely. So, I spent all my money throughout the rest of my college, all the money I saved up working in summers and all thatall fun in college, and then a three-month backpacking trip when I graduated. So were wishing him the best with those. Mad Fientist: Right! Scott is the CEO of BiggerPockets.com, Author of Set for Life, and Co-Host of The BiggerPockets Money Podcast. And yeah, hopefully, Ill speak to you soon. I think that investors should avoid investments that are time bound. I think that, sadly, those at the highest risk are middle-class American homeowners. 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.. Its a powerful way to build wealth over the long term and accessible to most Americans earning a median or higher income. But two, youre decreasing the amount of money that you need to produce financial runway. So, the final step I think is it goes on forever basically. Its kind of a funny phenomenon to me because when I was starting out on this journey, all I could think about was getting to a point where financial independence seemed like a realistic possibility. Its an app that people can use just like a regular wallet to store their card details and information. Scott Trench is the CEO and President of BiggerPockets. I think it starts with a basis in frugality, but then theres an aggressive investing component. 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. Its really reassuring to hear Scotts story as it sounds so similar to my plans at the moment. It cost me $1700. 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? He released Set For Life in 2017 to help others follow his successful path. Scott Trench: Yeah, I think thats huge. Alright, man, thanks a lot. Theyre unable to take advantage of opportunity. And once you have that financial runway, moving into step two here, were trying to get to about $100,000 in investable liquidity. Thats not fast enough. The mortgage is currently $1400 because I refinanced. And I couldnt agree more that also should be a very important focus for you because if you just work so hard to financial independence, and then have nothing to work on after, nothing that gets you out of bed or gets you excited about starting your day once you reach that point, youre going to probably be pretty miserable and may want to go back to work. 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. Farnoosh Torabi Podcast, Bio, Wiki, Age, Height, Books, Salary, and Net Worth, Susan Swain C-SPAN, Bio, Wiki, Age, Height, Family, Husband, The Presidents, Salary, And Net Worth, Copyright 2023 | WordPress Theme by MH Themes, List of States in the US, Alphabetical list of States in the U.S., and Abbreviation of States in United States. Scott Trench: No, I was just finding these weird financial ratios. So I really like how you structured it. Scott has dedicated his career to helping ordinary Americans build wealth in part through real estate investing. The rents there are $800 per month on each of the units. He hosts a podcast called "BiggerPockets Money." Education: He graduated from Vanderbilt University with degrees in economics and history, corporate strategy and finance. Author. You can download a free copy there. I was like, Oh, Im a smarter guy than the market. This company in China is a Chinese fruit juice company. And I definitely recommend everyone to check it out. And theyre profitable. 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. I wish that people knew that real estate investing is a double-edged sword. And theyve got a hundred million dollars in cash and no debts. If so I was hoping to get some advice on a few questions I have in regards to it: - When he talks about real assets what all applies in this model? Scott is married to his beautiful unidentified wife. And theres nothing wrong with that plan. And how does the duplex compare to the quadplex? So, those are two approaches for investing. Mad Fientist: Cool! Mad Fientist: Yeah, thats absolutely crazy! Mad Fientist: Yeah, yeah. Im going to put that book in the show notes, a link to the book in the show notes. 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. You can click on the 'unsubscribe' link in the email at anytime. What Scott did was exactly what we did since 2010, except we did it differently (regular 2bd condos, not multi-dwelling places) and location (SF, bay area). Another approach that I also use is real estate investing. And I also have a quadplex now that I bought as a regular investment property. So, if thats something youre interested in, head to MadFientist.com/advice. But if your house hacking correctly, you have three options. It's free. And this is the real power of it in a non-financial sense. And then, two, house hack. I think that this asset class and I broadly bucket large multifamily, NNN and other such real estate into this category is much more exposed to rising interest rates than people think, and there could well be some pain here. Currently, he is an active investor in the Denver market and manages a real estate portfolio of around $1.5 million. So I started with basically zero$3000 in savings when I started my career. He is also a real estate investor, an executive at a large online corporation, salesman, real estate broker, and author. . The couple posts a lot of their pictures together on their social media account. Calculate your FI date and graph your progress to FIRE for free in the Mad Fientist's FI Laboratory! Body Measurements But do have any other questions about the. This is great, I have a friend in Denver doing similar, sadly in UK, increases/changes in Buy-to-let (BTL) taxes, are making this approach nonviable. 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. Scott Trench: Yeah, absolutely. Denver, Boulder, Longmont (stop by and say hi to Pete), and Fort Collins are all full of excellent breweries. And the reason for that is because they have no cushion. Scott Trench: And particularly in terms of appreciation and real estate and stock markets. Its about a little over 10% of your savingsthat means you spend around $4000 a month. Scott Trench is a perpetual student of personal finance, real estate investing, sales, business, and personal management. Ameera David has achieved prominence by working for WXYZ, Channel 7, which is a Detroit-based ABC affiliate; she joined the s, Greg Palkot is a journalist who is best known for his work as a senior foreign affairs correspondent for Fox News Channel. As a fellow beer lover, I highly recommend you get to Colorado for a visit! Mad Fientist do you agree, that in UK its harder to make this work? Joshua Dorkin, founder and CEO of BiggerPockets.com, joins me on the Financial Independence Podcast to talk real estate and entrepreneurship! This is a loan at the best rates available. His parents brought him up in the United States. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). Thats MadFientist.com/advice. So, yeah, Bigger Pockets Money Podcast. Scott Trench is a perpetual student of personal finance, real estate investing, sales, business, and personal management. We both have kind of a similar approach to money in general. Its hard to see how unemployment can increase right now in a meaningful sense when the minimum wage is this low. And yeah, your last name is Trench, and you want how many trenchlings? 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. 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. This is a business that requires, literally, hundreds of hours of self-education from the investor prior to getting started. And I encourage people to go out and think about adding side hustles one at a time as theyre going down this path. 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. Click here to listen on iTunes. 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. Scott is someone who came on my radar a few years ago because Mindy Jensen, aka Mrs. 1500, from 1500Days.com mentioned quite a few times that I needed to get her colleague, Scott, on the podcast. He is the founder and CEO of BiggerPockets.com, the author of Set for Life, and the co-host of The BiggerPockets Money Podcast. Now, of course, you cant make any bets in the first place if you have no wealth and spend all that you earn. He serves as the CEO of BiggerPockets.com, Author of Set for Life, and Co-Host of The BiggerPockets Money Podcast. Youre also not likely to get a big raise at your job at work within the next year. 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. I think that its increasingly difficult. We've cultivated everything you need to get started, from long-term investing principles to increasing your overall net worth in big ways, with this list of the 20 best finance audiobooks from our catalog. Scott Trench: Yeah, Im 27. My odds of success of winning this hand based on what I know are 70%. And this is something that I really am looking forward to diving into today in the interview because I think its a really powerful way to make the journey to financial independence not as daunting. She was right! And shes a poker player. And I knew that my salary at financial analyst 2 would be about $56,000 to $58,000 (again depending on performance). I believe I currently was able to getI remodeled and got one of the units up to $925. Start tracking your own financial progress with these money management apps. 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. Mad Fientist: Wow! Mad Fientist: Wait, let me interject. People doubling their income in a corporate type situation, its not heard of. Start tracking your net worth with Personal Capital using our link. 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. David Greene shares the exact systems he used to scale his He also published his book First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes in 2021. Mad Fientist: Absolutely! So, thank you for that. Scott is a lifelong learner of personal finance, real estate investing, sales, business, and personal management in the United States. Rising interest rates are likely to impact cap rates on properties, which will compress values and limit exit and/or refinance options. Its written for a median income earner that is starting with little to no assets but wants financial freedom. I think that once you have a 50% savings rate on a median income or greater, thats when all of this kind of really starts falling into place and the opportunities begin multiplying in so many different directions for you. But we dont talk about his real estate investing, we talk about his personal financial journey where he started as a waiter and found ways to make way more money than all the other waiters at the restaurant, how he saved all that money, how he was able to house hack, how he was able to parlay into his career as a police officer, how he was able to save and accumulate tremendous amounts of wealth while most of the people, most of his peersand this is in San Francisco. 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. She said hes a 20-something whos doing incredible things with real estate and investing and finances in general, so I needed to talk to him. Scott Trench: Yeah, you know, I had the good privilegeand this is not like an intelligence thing. Id recommend people start from the source. 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. House hacking for life!! Im now working very long hours and trying to figure out how to grow the company and all that kind of stuff. Over the weekend, Adams appeared to double down on the remarks on Twitter. This is it!. Scott was born in September 1990, in the United States. 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