Scott Trench: So the quadplex that I purchased, I bought it for $355,000. But one of the things I loved most about it was how you broke it down to three phases. 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. And so, I believe that two things are likely to help people increase their odds of success going rapidly from $25,000 net worth to $100,000. Our opinions are our own. When (if ever) do you think the real estate bubble we are in will burst? You can click on the 'unsubscribe' link in the email at anytime. And I think for that median income earner starting with zero, its with that savings position. A lot of these investors have enjoyed well over a decade of rising prices. Yeah, can you describe that again? 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. Hes doing some amazing stuff, which Im really excited to talk to you about. 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. 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. Scott Trench: Yeah, sure. This is a business that requires, literally, hundreds of hours of self-education from the investor prior to getting started. Its an app that people can use just like a regular wallet to store their card details and information. In 2021, he also released his book First-Time Home Buyer: The Complete Playbook to Avoiding Rookie Mistakes. In addition to his career, Scott is the author of Set for Life which was published in 2017. Scott Trench: Yeah, that was my first property. 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. At the time that were recording this, Im finding it very difficult to find properties. 2023 GOBankingRates. 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. Are they easier to manage initially? 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. Your email address will not be published. Scott Trench: Yeah. If you dont have that option, then you are stuck. And yeah, hopefully, Ill speak to you soon. Mad Fientist: Oh, nice. Scott Trench: Yes. Accumulating a lifetime of wealth in a short period of time involves working harder and smarter than the average person, and Scott Trenchinvestor, entrepreneur, and CEO of BiggerPockets.comdemonstrates how to . Scott Trench: Yeah, I think thats huge. Scott Trench: And particularly in terms of appreciation and real estate and stock markets. So, thats one plan. 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. He has used many of the strategies outlined in the book to build his own real estate portfolio. 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. 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. Those who buy in desirable locations in markets with strong long-term growth prospects and responsible amounts of leverage (or with all cash purchases) are likely to see a very satisfactory return over the long term, relative to other asset classes. He serves as the CEO of BiggerPockets.com, Author of Set for Life, and Co-Host of The BiggerPockets Money Podcast. Listen to the Podcast Here Watch the Podcast Here Help Us Out! Scott Trench: Its been going pretty well. Youre now president of Bigger Pockets which is huge. Last, I wonder, with the Republicans predicted to pick up a lot of seats in November, whether the Fed is likely to attempt to stimulate a Biden Administration economy at this point. The more money these institutions raise, the more soaring property values they can scoop up, and the more carried interest the deal sponsors make. Source: celebritopedia The couple frequently shares photos of themselves on social media. He serves as the CEO of BiggerPockets.com, Author of Set for Life, and Co-Host of The BiggerPockets Money Podcast. Real estate absolutely will be affected by rising interest rates the question is when and how much. Body Measurements Im easily a 2% or 3% safe withdrawal rate, which is much more conservative than the 4% safe withdrawal rate, which means they have much more assets than they need to produce the level of income that they desire. He released Set For Life in 2017 to help others follow his successful path. 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. And I also have a quadplex now that I bought as a regular investment property. Scott Trench: I live in another duplex doing the same thing. And once you have that financial runway, moving into step two here, were trying to get to about $100,000 in investable liquidity. I downloaded an audio book version of his book, Set for Life, and I really enjoyed it. BiggerPockets role is to help them increase the odds of success in their investing careers and help them build wealth faster and with less risk by giving them access to great content about nearly every aspect of real estate investing imaginable. He is also a real estate investor, an executive at a large online corporation, salesman, real estate broker, and author. Who Should Read Set For Life: Dominate Life, Money, and The American Dream? 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. He earns his wealth from his career, therefore, he has amassed a fortune over the years. For example, if I were single, I could rent out my spare bedroom in my house. Thats not fast enough. 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). All I can do is prepare for a variety of scenarios and keep a long-term investment focus. And again, yes, youre buying in such a way that it will make a smart cashflowing asset for you once you move on and move out of that property. 2. I bought my last property in June 2017. The couple posts a lot of their pictures together on their social media account. Scott Trench: Yeah. 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. DO NOT Sell My Personal Information. There needs to be more FI conversation for those with children. even while working full-time, earning a median income, and making up for a negative net worth. 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 . Lease Purchase, Lease Options, Tax Liens, Notes, Paper, and Cash Flow Discussions, Private Lending & Conventional Mortgage Advice, Real Estate Guru, Book & Course Reviews & Discussions. 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. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). Mad Fientist: Mindy has been like, Youve got to get him on the podcast. You could try starting a blog or a podcast. 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 is a perpetual student of personal finance, real estate investing, sales, business, and personal management. Mad Fientist: Yeah, yeah. Youre also not likely to get a big raise at your job at work within the next year. Mad Fientist: Very cool! Scott Trench is married to his lovely unnamed wife. Currently, he is an active investor in the Denver market and manages a real estate portfolio of around $1.5 million. $305 at Sezane. Throw all your additional cash into index funds, model it out using whatever percentage return youre comfortable with. 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. I love helping spread the message of financial independence to as many places as I can. $2,650 at NET-A-PORTER. If you message me there, I usually get back to everybody within a day or two. More luck is involved in rapidly going from $25,000 to $100,000 than there is from going from zero to $25,000. 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. Enjoyed the podcast. Szane Scott Trench Coat. 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. The mortgage is currently $1400 because I refinanced. I know a lot of people that would be happy with a raise of that level. And Ill see you next time. But do have any other questions about the. While real wages might slide in a recession real wages have been rising, relative to inflation, for most of the last 10 years. Get advice on achieving your financial goals and stay up to date on the day's top financial stories. And what caused her to come to me and say, Hey, you needed to talk to this guy? Over the weekend, Adams appeared to double down on the remarks on Twitter. Melissa hence worked as a reporter for the Great Neck Record and later on began her television career working for CNN Financial News and Bloomberg. Trench joined BiggerPockets in 2014 and is the CEO and president. Who Gets Institutional Merit Grants At Private Colleges? It will also teach you how to live a happy, healthy, and fulfilling life . So, thank you for that. . I was just curious if anyone has calculated there Real Net Worth as he describes it in the book. 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 that is where I became interested in real estate and started listening to Bigger Pockets and becoming a fan of the company there. Oh, that was a bad decision to bet there. No, it was a good decision. I put down $12,000. 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. My mortgage payment was $1550. Youre welcome any time. Start tracking your own financial progress with these money management apps. real estate business from buying two houses per year to And. 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). And if people want to find you, wheres best to find you online, just go to Bigger Pockets? Scott Trenchs net worth is estimated to be $1.5 million. 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. 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. Mad Fientist: Very cool. Mad Fientist: Yeah, absolutely. 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. At the moment, no information about his parents or siblings is available. And your boss was on the show, Josh Durkin. Are there any links in particular youd recommend? And so, if you cant sell, then your only option as a homeowner or a house hacker that hasnt bought a property that would make sense as a rental is to continue living on the property and paying it. So, itll take me a year or two to get to that point because I dont want to kick any tenants out or anything or raise the rent too quickly on them. Click Manage settings for more information and to manage your choices. Or do you think go straight for something like the quadplex if you have the capital to invest? He serves as a real estate investor, an executive at a large online corporation, salesman, real estate broker, and author. 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. Share book. Search by Name, Phone, Address, or Email And no one can go in and audit them and figure that out. And once I heard that, everything clicked for me, and I was like, This is it. You may not be able to change your lease, you may not be able to start biking to work tomorrow. He was episode #23. Early life and C. Amanda Moye Brown: Do you want to know about Wes Browns Wife? Yeah, Ill put a link to the first episode in the show notes. The leap and I guess the freedom is almost kind of the scary thing. Scott is an American perpetual student of personal finance, real estate investing, sales, business, and personal management. So, Bigger Pockets obviously has tons of amazing resources for people who want to get into stuff like this. I couldnt agree more. Well, thank you so much for coming on the show. He was born and raised in the United States by his parents. You can download a free copy there. Scott Trench: Oh, wow! And then, the rents are about $2600 a month. Scott Trench: So, I got interested in real estate as a byproduct of being interested in financial independence in the first place. So, its kind of the opposite of FI at this point. Scott Trench: You know, she hasnt wrapped yet. Scott Trench: Yeah, I got promoted to president of Bigger Pockets maybe last Tuesday I think. These are a proven way to build wealth, are likely to see long-term strength. He married his beautiful wife with whom he resides in Denver, Colorado. 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. Scott Trench is a perpetual student of personal finance, real estate investing, sales, business, and personal management. So, you really have to start somewhere. That's $1 MILLION. 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 Trench: Yeah, Josh has definitely kind of achieved the dream here. Well, the reason is because Chinese companies all the timeI dont know about this one in particularlie about their financials. Scott Trench: Well, I think we both share a lot of interest in personal finance. Well, my goal was financial freedom. Its not to save the economy to support the Biden Administration. Scott Trench: Get to a 50% savings rate. Its unlikely. 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. Theres so many different ways to make money that dont cost anything but your time, and maybe a few hundred to a few thousand dollars to try out. Anyway, thanks a lot for listening. And I think I can read my opponents as well as I can to feel comfortable with those odds and set myself up. Some of it is obviously also luck. Scott Trench's net worth is estimated to be $1.5 million. Im going to put that book in the show notes, a link to the book in the show notes. Trench is the author of the 2017 book Set for Life. 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. I wish that people knew that real estate investing is a double-edged sword. BiggerPockets is a complete resource for anyone looking to succeed in the world of real estate investing. So, for example, a house hack the way I look at it through my lens was I bought a duplex for $240,000 here in Denver in about late 2014. Scotts estimated net worth is $1.5 million. Rich Dad Poor Dad: 20th Anniversary Edition. My odds of success of winning this hand based on what I know are 70%. And yeah, your last name is Trench, and you want how many trenchlings? So yeah, I really enjoyed it. So thats how I managed to lose money investing in stocks I guess. 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. Joshua Dorkin, founder and CEO of BiggerPockets.com, joins me on the Financial Independence Podcast to talk real estate and entrepreneurship! And both Mindy and I are a little bit morehow do I describe it? BiggerPockets.com is the worlds largest online real estate investor network. This doesnt influence our evaluations or reviews. After high school, Scott enrolled at Vanderbilt University where he earned a Bachelor of Arts in Economics and History in 2013. So, you might need $25,000 in total cash, liquidity, to finance your $2000 a month lifestyle. So how did you get interested in real estate? And I knew very clearly that around the 18-month mark, give or take a few months depending on my performance, I was going to get a promotion to financial analyst 2. The rents there are $800 per month on each of the units. And theyre profitable. Yeah, thats a great way to look at it. Ive received a lot of great answers over the years so I decided to compile all those answers into a PDF, which you can now download for free here! 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 think that, sadly, those at the highest risk are middle-class American homeowners. 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. But once Ive got that stabilized after a year or two, I think Ill have a very, very nice cash flow on top of what is already a satisfactory cashflow. Sarah Peck, Richard Epstein, Logan Sekulow, Jim Harold, Ameera David is an Arabian-American journalist, news reporter, and anchor. The amount of savings I had, less my car loan payment, plus the value of my car. Mad Fientist: Very cool! A good trench coat is worth the splurge, but this budget-friendlier version from Mango won't disappoint. Subscribe to our YouTube Channel and get one extra LIVE episode from us per week. 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. 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. Have you bought any other property since then? Fun, entertainment, healthcare, insurance, all of that falls into that last third. On the flip side, wealth inequality skyrocketed as asset prices inflated with low interest rates. 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. Scotts wifes identity is unknown to the general public. Buy, Rehab, Rent, Refinance, Repeat is the five-part BRRRR 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.. 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. And yeah, youre 27 and youve done a ton of crazy, amazing stuff so far. I wish I had my act together as much as Scott does when I was his age. Amara Trinity Lawrence: Know about Martin Lawrence Daughter? When Josh decided to step away to be with his family, Scott became CEO. Author. Its written for a median income earner that is starting with little to no assets but wants financial freedom. 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 hopefully, Ill make it out to Denver one of these days and say hello. So, yeah, Bigger Pockets Money Podcast. Earning an $8000 raise after a year is great. Thats great. BiggerPockets.com is the worlds largest online network of real estate investors. I find social media very overwhelming. What did Mindy see in you do you think? So yeah, the Bigger Pockets Money Podcast, how has it been going? Scott Trench: Yeah, and I think a dollar saved is better than a dollar earned because of that tax advantage. Another approach that I also use is real estate investing. So, I think thats where our friendship kind of kicked off, a pretty similar mindset on life and finance and real estate in general. We were fortunate enough to get the good advice from someone who actually did this since 70s and retired a multi-millionaire in 90s (in bay area, which is quite a feat), and perfect timing too (he told us to buy in 2010, when no one would touch real-estate since the 2008 crisis). And it contains all of the answers Ive received since I started this podcast back in 2012. Mad Fientist: Nice! And then, one-thirdthat was two-thirds I just described there, housing, transportation and foodone third is everything else. But that was not going to get me expediently towards my goal of a several hundred thousand to a million dollar net worth and several thousand dollars a month in passive cashflow. So theyre not even recognizable by name, the companies? Mad Fientist: Alright, good. So my first job was at a Fortune 500 company as a financial analyst 1. So I started with basically zero$3000 in savings when I started my career. 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. Or maybe you can just send them over, and Ill put them in the show notes in case people want to know more? And once you get to $100,000 in investible liquidity, now how you invest that money begins to become really important. 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. The identity of Scotts wife is not known to the public. One, youre accumulating that all in savings which is 100% gain because its after tax savings that youre accumulating. So, Im trying to buy one every 12 to 18 months and just sustain that system. 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?. 'A lot of people are angry at me today but I haven't yet heard anyone disagree,' he told his 867,000 followers. Its been a whirlwind since then. Scott Trench: Yeah, sure. Of course, that logic works both ways; and, if interest rates come back down quickly, these types of investments might perform even better. Mad Fientist: Excellent! Yes. Now to strategize on which to sell and when to acquire my forever home. A lot of people will go with something in the 8% to 10% return range for index fund investing over the long term. And youre kind enough to send it to me. Scott Trench: Yeah, you know, I had the good privilegeand this is not like an intelligence thing. Mad Fientist: Absolutely! . This has been a big party for many years. No, all of these things work. And yeah, back in my poker-watching days, I remember Annie Duke very well. 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. So if youre following that, I was collecting $1700 in rent on $1550 mortgage. I would have been FI in my 30s. And the first phase was getting that first $25,000. I picked stocks, and I tried to invest in stocks, and I lost money in 2013 and 2014 when everybody else was making money. This document can be used by anyone in any position no matter how much you have invested or saved up. But its funny because I hear these people, theyre like, Oh, Im very well into FI. . Suppose that youre making $50,000 a year, if you save $500 a monthwhich is actually a pretty good savings rate. Mad Fientist: Yeah, exactly. This is it!. 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. Who cares if its underwater in terms of you owe more than its worth as long as its cash flowing? I still did fine and made it in my 40s but my maturity was late out of the gate. 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