http://traffic.libsyn.com/madfientist/scott-trench-interview.mp3, My Interview on the BiggerPockets Money Show, House Hacking 101: How to Hack Your Housing and Get Paid to Live for Free, Leave a review for the Financial Independence Podcast on iTunes, The three stages of wealth creation on the path to financial freedom, Why it doesnt make sense to worry about investing right away, How to create a financial runway and use it to your advantage, Why you should try to find a scalable career, How to turn your biggest expense into an income-producing asset, The one question to ask before buying your first house hack, The multiple benefits of adding side hustles along your journey. I just mention I have the three properties. Mad Fientist: Wow! What did Mindy see in you do you think? I wish that people knew that real estate investing is a double-edged sword. Mad Fientist: Alright, good. 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. If you lose your job, youre screwed! But its very exciting, and its like the perfect world for me because I just love Bigger Pockets. . Early life and C. Amanda Moye Brown: Do you want to know about Wes Browns Wife? Mad Fientist: He seems like a good boss anyway. I think its going to take me a good bit of time here. It just didnt work out. So do you want to talk about that final step? I plan to buy a fourth by, if not by the end of this year, by the end of 2018, by at least kind of spring 2019 to just kind of continue my system. And yeah, hopefully, Ill speak to you soon. So, I definitely have some higher financial goals than kind of like lean FI for me and maybe like one significant other. And the mortgage is about $1700. Nice episode! SNAP gives eligible low-income households extra food-purchasing assistance to supplement food budgets. 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. And shes a poker player. 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. Shes good. Why Frugal Living Will Only Get You So Far. Scott serves as the Co-Host of The BiggerPockets Money Podcast in Denver, Colorado alongside Mindy Jensen. Its hard to see how unemployment can increase right now in a meaningful sense when the minimum wage is this low. 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.. Scott Trench: But well get her to rap on one of the future ones coming up. 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. Scott Trench is the CEO and President of BiggerPockets. 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. Your first guest was the same first guest that I had way back in 2012, Mr. Money Mustache (which was a great episode). Have you enjoyed it? 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. So, you might need $25,000 in total cash, liquidity, to finance your $2000 a month lifestyle. But thats awesome. And. 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. Mad Fientist: Very cool! I think that a lot of people dismiss the actions of the Federal Reserve right now. Scott Trench: Sure! Scott Trench: One of the great things about house hacking is its a huge spectrum. 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. . 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 Mar 21, 2017Mar 16, 20218 min read In this article I just talked to a lender that prequalified me for over $1 million in financing. And then, one-thirdthat was two-thirds I just described there, housing, transportation and foodone third is everything else. The more money these institutions raise, the more soaring property values they can scoop up, and the more carried interest the deal sponsors make. Instead, I think that we will simply see real wages fall relative to inflation. 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. Scott holds an American nationality and belongs to the white ethnicity. Scott Trench is an American perpetual student of personal finance, real estate investing, sales, business, and personal management. 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. $305 at Sezane. 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. Thats MadFientist.com/advice. So, for example, on a basic level, Mr. Money Mustache has an incredible intro because I believeand Mindy agreesthat the basis of personal finance, the foundation, is always in that frugality and having the mindset of the end goal of happiness and using money as a tool to live out that ideal lifestyle I guess. He was born and raised in the United States by his parents. 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. Currently, he is an active investor in the Denver market and manages a real estate portfolio of around $1.5 million. I think it starts with a basis in frugality, but then theres an aggressive investing component. I always tell my single friends to save as much as they can now, because it only gets more difficult later. I couldnt agree more. So were wishing him the best with those. Mad Fientist: Cool! Well, thank you so much for coming on the show. I think a 50% percent savings rate kind ofget to a median income, and then get to a 50% savings rate. I was able to reduce my monthly payments. 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. Any investing information provided on this page is for educational purposes only. 'A lot of people are angry at me today but I haven't yet heard anyone disagree,' he told his 867,000 followers. 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. David Greene shares the exact systems he used to scale his Advertiser Disclosure: Many of the offers appearing on this site are from advertisers from which this website receives compensation for being listed here. 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. And Im plenty happy doing what Im doing and kind of continuing along with things. 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. And my rents were $1150 from the other side and $550 for my side. Read this book now. 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. Denver, Boulder, Longmont (stop by and say hi to Pete), and Fort Collins are all full of excellent breweries. 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. Scott Trench: Yeah, Josh has definitely kind of achieved the dream here. Obviously, some chance plays a part. Lease Purchase, Lease Options, Tax Liens, Notes, Paper, and Cash Flow Discussions, Private Lending & Conventional Mortgage Advice, Real Estate Guru, Book & Course Reviews & Discussions. No, heres what I was thinking. Yeah, thats a great way to look at it. The next phase is getting that first $100,000. 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. For example, we had Erin Chase on there. Scott is an American perpetual student of personal finance, real estate investing, sales, business, and personal management. Thats great. But two, youre decreasing the amount of money that you need to produce financial runway. Mad Fientist: Nice! 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. Its written for a median income earner that is starting with little to no assets but wants financial freedom. So I really like how you structured it. Thats fantastic. She now has a net worth of $5 million, and her annual salary is estimated at $1 million. And this brings up a really cool thing that I liked in your book, which I havent even mentioned yet. Start tracking your own financial progress with these money management apps. I definitely still have some work to do to get to there. This has been a big party for many years. This is what I want to do with money. You can download a free copy there. Information about your device and internet connection, like your IP address, Browsing and search activity while using Yahoo websites and apps. Scott Trench: No, in May of 2012, I was graduating from college and getting ready tono, I graduated college in May of 2013. My mortgage payment was $1550. Theater of popular music. 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. And then, finally, the next phase is getting from $100,000 to financial freedom. 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. Fun, entertainment, healthcare, insurance, all of that falls into that last third. She was right! Being a parent changes the game. Trench joined BiggerPockets in 2014 and is the CEO and president. 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. Life and C. Amanda Moye Brown: do you want to do to get to 50. 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