What Are Qualified Expenses For A 529 Plan (And What Doesnt Count)? And yeah, your last name is Trench, and you want how many trenchlings? Thats true for the average and the median American, but not popular to point out. Thats great. And my salary when I started was $48,000. And once you get to $100,000 in investible liquidity, now how you invest that money begins to become really important. The rents there are $800 per month on each of the units. So, as part of my effort actually to become a better financial analyst at my job, I started listening to and reading all these content on finance and kind of discovered the concept of personal finance at some point. 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. Survey: Even With Higher Expenses, Most Student Loan Borrowers Are Ready To Resume Payments, Learn the three phases of financial freedom, Discover the secrets to creating an efficient lifestyle, Create your strategy to replace your wages with passive income streams. He married his lovely wife, with whom he now lives in Denver, Colorado. Earning an $8000 raise after a year is great. Scott Trench is the CEO and President of BiggerPockets. DO NOT Sell My Personal Information. And their market cap is $50 million. Mad Fientist: Absolutely! I was just working towards that financial freedom. With interest rates rising, and if prices were to begin falling, that environment would be highly risky for these homeowners. And then, we kind of move into more niche topics with future guests. Scott Trench: Yes. Its been a whirlwind since then. And any time Mindy gives such a glowing recommendation for someone, I definitely check them out. 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. And I think for that median income earner starting with zero, its with that savings position. 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. Mad Fientist: Nice! 3. Mad Fientist: Wow! I downloaded an audio book version of his book, Set for Life, and I really enjoyed it. 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. 2. Im on a lot of social media, but I dont ever check them. But when youre putting yourself into a position to take advantage of opportunities, and you do have options, and you do have that buffer (like that first $25,000 that we talked about), and youre able to take advantage of things that other people cant, and then yeah it may look lucky after the fact. For example, if I were single, I could rent out my spare bedroom in my house. The more money these institutions raise, the more soaring property values they can scoop up, and the more carried interest the deal sponsors make. Thats MadFientist.com/advice. They both live in Denver, Colorado. 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. On the flip side, wealth inequality skyrocketed as asset prices inflated with low interest rates. 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. Turns out our guest today, Scott Trench, found a lower paying dream job at a startup. And then, two, house hack. Mad Fientist: Very cool! Are they easier to manage initially? Find out more about how we use your information in our privacy policy and cookie policy. So thats what I did! And my book is written for a very specific audience. Scott Trench: Yeah, I got promoted to president of Bigger Pockets maybe last Tuesday I think. Scott breaks down the journey to financial independence into three stages and explains what you need to focus on at each step (and why)! And it currently rents for $1400. . So, if youre following, thats $3200 in rent on a $1700 mortgage. Through a solid understanding of money management, calculated risks, and a lot of hard work, he has created financial freedom for himself as well as a successful real estate business in just a few years after graduating college. I put down $12,000. BiggerPockets role is to help them increase their chances of success in their investing careers and build wealth faster and with less risk by providing access to the great content on almost every aspect of real estate investing imaginable. He is the founder and CEO of BiggerPockets.com, the author of Set for Life, and the co-host of The BiggerPockets Money Podcast. 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. 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. And I still have a little bit to go to completely pay it off. 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. Its just that the math doesnt work like that. So youre not going to be able to even last one month without your job if youre starting from scratch until eight months have passed and really six weeks timeframe by the end of the year. He has some family things that are going on. Currently, real wages are still at relative highs, and asset prices are finally moving back towards what seem to be more sustainable valuations. Mad Fientist: Yeah, exactly. These offers do not represent all available deposit, investment, loan or credit products. Mad Fientist: Yeah, yeah. Mad Fientist: And you could do it while youre on the clock. But Ill be sure to send you that link, so listeners can go ahead and click on that in the show notes. Scott Storch is a record producer, songwriter, and former musician who began his career in 1991. 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. But if your house hacking correctly, you have three options. 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. It has really motivated my fiance and I to take the next steps towards financial freedom. And yeah, youre 27 and youve done a ton of crazy, amazing stuff so far. Body Measurements And then, I actually stumbled upon your podcast, the very first episode, and Mr. Money Mustache. Scott Trench: You know, she hasnt wrapped yet. more attainable than ever. Scott Trench is CEO of BiggerPockets, co-host of the BiggerPockets Money Podcast, a real estate investor, and a real estate broker.He is also the best-selling author of Set for Life and First-Time Home Buyer, which have sold more than 140,000 copies combined.Through a solid understanding of wealth management, calculated risks, and a lot of hard work, he created financial freedom for himself as . So you were my gym companion for a good week or two. Scott is a lifelong learner of personal finance, real estate investing, sales, business, and personal management in the United States. I just found your podcast and Im really enjoying it. Turning Your Largest Expense Into An Income Producing Asset, The Financial Impact Of Housing Decisions, An Introduction To Investing For Early Financial Freedom, Habits And Their Impact On Financial Freedom. Im going to put that book in the show notes, a link to the book in the show notes. I started out working at a Fortune 500 company. I really appreciate it. It cost me $1700. 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. Its a powerful way to build wealth over the long term and accessible to most Americans earning a median or higher income. And so, I put down 5% with an FHA loan. When you login first time using a Social Login button, we collect your account public profile information shared by Social Login provider, based on your privacy settings. 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. Scott Trench is the author of "Set for Life," CEO of BiggerPockets and co-host of the "BiggerPockets Money" podcast. And youre kind enough to send it to me. When interest rates fall and real estate assets are scarce, asset values soar. What did Mindy see in you do you think? But if it can cashflow as a piece of investment real estate, then you can always decide to continue living there or keep it as a cashflowing rental. We both have kind of a similar approach to money in general. Mad Fientist: Yeah, this is a long time coming. Scott Trench: Sure! I have a very sizable chunk of my money in index funds for that exact reason. Mad Fientist: Very cool! And if people want to find you, wheres best to find you online, just go to Bigger Pockets? Bigger Pockets Money podcast did a show about this recently. Hes this young guy thats doing all these crazy things. So youre in your mid-twenties, right? But theres also this whole realm of entrepreneurship. 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.. Mad Fientist: Yeah, absolutely. 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. He uses the example of a quadplex I believe in that post. Anyway, thanks a lot for listening. But you model it out, and you just throw all of your excess cash into a big pile. 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 Trench is the CEO of BiggerPockets, an education platform on real estate investment. Even starting with zero savings, you can go from a five-figure income to six figures, from an active job to passive income, then finally to the ultimate goal . He hosts a podcast called BiggerPockets Money.. I appreciate it. And I do she does a lot of private lending and other various kind of creative ways to invest and maybe get a diversified or different or higher returns than she can with just stocks. But thats a huge improvement from paying hundreds or thousands of dollars in rent per month. Start tracking your net worth with Personal Capital using our link. They have nothing to fall back on. Its written for a median income earner that is starting with little to no assets but wants financial freedom. Have you bought any other property since then? 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 both Mindy and I are a little bit morehow do I describe it? Theyre unable to take advantage of opportunity. Its not like I bought an [00:29:20]. So, the first time that I can figure out anybody actually using the term house hacking was by a guy that works here named Brandon Turner. These offers do not represent all deposit accounts available. So, I mentioned your podcast briefly, but I definitely want you to talk about it because your co-host is one of the people that has been on my show probably more than anyone else. I mean, that obviously worked out for you, Brandon. I moved out a couple of years later. Youre also not likely to get a big raise at your job at work within the next year. 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? But on the other hand, if I wasnt saving, if I had no financial runway, it would be too risky to leave. Our opinions are our own. And thats the best case scenario, is that you go through all of those rungs of the ladder in 20 years. 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. Buy, Rehab, Rent, Refinance, Repeat is the five-part BRRRR But having that thing that youre working on as youre trying to reach financial independence, then hopefully, by the time you reach it, youll have something there that youre really passionate about and that you can spend a lot of time doing. I was interested in that line of work, but I didnt want to be tied to it for 40 years. I definitely still have some work to do to get to there. Congratulations again on the promotion and the book. Scott Trench attended Vanderbilt University after high school, where he earned a Bachelor of Arts in Economics and History in 2013. And I got a $236,000 loan, something like that after the fees and all that. Well, the reason is because Chinese companies all the timeI dont know about this one in particularlie about their financials. So theyre not even recognizable by name, the companies? He serves as the CEO of BiggerPockets.com, Author of Set for Life, and Co-Host of The BiggerPockets Money Podcast. Have you made any mistakes, or is there anything you would do differently if youre starting from scratch now? Over the weekend, Adams appeared to double down on the remarks on Twitter. And theres nothing wrong with this plan of index fund investing. So, I always end all my interviews with one piece of advice youd give to somebody whos starting on the path of FI. SNAP gives eligible low-income households extra food-purchasing assistance to supplement food budgets. Mad Fientist: Nice! 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. And theyre fine with that. So my first job was at a Fortune 500 company as a financial analyst 1. 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. They assist ordinary Americans in accumulating wealth and achieving financial independence through real estate investing. Last, I think that your small mom-and-pop investors are likely to be affected. . And how does the duplex compare to the quadplex? He is 31 years old. 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. All Right Reserved. Mad Fientist: Thats very cool! I managed to lose money because I knew better than the market about this couple of Chinese stocks that had more cash than market cap and I dont know. 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 . 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 . So hopefully, it will happen. Is Scott Trench Married Yes. Its really reassuring to hear Scotts story as it sounds so similar to my plans at the moment. BiggerPockets is a complete resource for anyone looking to succeed in the world of real estate investing. This is what I want to do with money. We also get your email address to automatically create an account for you in our website. Scott Trench is married to his lovely unnamed wife. Going back in time to the 1970s and 1980s, weve seen that the Fed is willing to push interest rates as high as they need to go to fight their first enemy inflation and that they are willing to conduct brutal monetary policy that affects jobs to do that. I think that a lot of people dismiss the actions of the Federal Reserve right now. Author. He released Set For Life in 2017 to help others follow his successful path. Like many people who are successful in the music industry, Storch became a wealthy man. So, the Bigger Pockets Money Show started as kind of a spin-off, an alternative to the Bigger Pockets I guess real estate podcast. Two or three years ago, I actually [00:01:46] Bigger Pockets. 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. Mad Fientist: Cool! Or do you think go straight for something like the quadplex if you have the capital to invest? And thats when I found your show, some time in that timeframe. So, thats one plan. 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. And I also have a quadplex now that I bought as a regular investment property. You run out of money and you have to go and find similar paying work as your only option. Mad Fientist do you agree, that in UK its harder to make this work? 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. And Im going to hopefully get it out of the library as soon as I can because that sounds really 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. 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! 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. 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. If you dont have that option, then you are stuck. Shop Pay is an innovative payment solution developed by Shopify. Denver, Boulder, Longmont (stop by and say hi to Pete), and Fort Collins are all full of excellent breweries. I cant answer that question. A rare picture of Scott Trench with his wife. I have my eye on maybe branching out into some other types of investments. 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. After the fees and all that take the next year make this work fall and real estate.. My salary when I found your podcast, the goal of this show is to,. One part of a quadplex I believe it makes sense for many people who are successful the! 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