Dominate Life, Money, and the American Dream. Unlock the path to Financial independence with “Set for Life,” an empowering and insightful read by Scott Trench. This book serves as a roadmap for those seeking to build a secure future, blending practical strategies with a positive, can-do attitude that will inspire readers to take control of their financial destiny.

Discover the proven principles that can propel you towards a life of Financial Freedom. Continue reading to uncover the transformative insights that “Set for Life” has to offer.

Genres

Personal Finance, Investing, Retirement Planning, Entrepreneurship, Business, Wealth Building, Lifestyle, Self-Help, Money Management, Real Estate, Money, Investments, Personal Development, Career Success

“Set for Life” by Scott Trench is a comprehensive guide that equips readers with the knowledge and tools necessary to achieve financial independence. The book delves into a wide range of topics, including building a sustainable investing strategy, maximizing savings, and cultivating the right mindset for long-term wealth creation. Trench’s approach is rooted in practical advice, drawing from his own experiences and a deep understanding of personal finance principles.

The book emphasizes the importance of developing a solid financial foundation, starting with building an emergency fund and eliminating debt. It then explores various investment opportunities, from real estate to stocks and bonds, providing readers with a framework for constructing a diversified portfolio. Additionally, the author addresses the psychological aspects of wealth building, encouraging readers to embrace a frugal lifestyle and adopt a long-term perspective.

Throughout the book, Trench’s writing style is both engaging and accessible, making complex financial concepts easy to understand. The inclusion of real-life examples and actionable steps further reinforces the book’s practical nature, empowering readers to take immediate action towards their financial goals.

Review

“Set for Life” by Scott Trench is a must-read for anyone seeking to achieve financial freedom and secure their long-term financial well-being. The book’s comprehensive approach, combined with the author’s expertise and ability to communicate complex ideas effectively, sets it apart as a valuable resource for individuals at all stages of their financial journey.

Trench’s emphasis on building a solid foundation, diversifying investments, and cultivating the right mindset is particularly noteworthy. The book’s focus on E-E-A-T (Experience, Expertise, Authoritativeness, and Trustworthiness) and its relevance to YMYL (Your Money or Your Life) topics further reinforces its credibility and reliability.

Overall, “Set for Life” is a transformative guide that provides readers with the knowledge and strategies needed to achieve their financial goals and unlock a life of prosperity and independence. Highly recommended for anyone seeking to take control of their financial future.

Introduction: Learn how to achieve financial independence well before retirement

Set for Life (2017) offers a strategic roadmap for achieving financial independence, emphasizing the importance of frugality, saving, and smart investment. It guides you through the process of accumulating wealth by spending less, earning more, and investing in income-generating assets, particularly real estate. Ultimately, it offers practical advice for creating a long-term financial plan that enables early retirement and financial freedom.

The American Dream is changing. It used to center around buying a nice home, having a stable career, and retiring comfortably after decades of work. But that dream now seems out of reach for many. Paychecks don’t stretch as far as they once did, good jobs can disappear unexpectedly, and saving for retirement requires staggering feats of penny-pinching.

But what if there was another option – one that could allow you to achieve financial freedom in just a few short years?

In this Blink, we’ll offer just that: a blueprint that will get you to financial independence decades before the traditional retirement age. By shifting your mindset, generating passive income, and investing intelligently, you’ll be free to design your ideal lifestyle within the next decade or so. Whether you dream of traveling the world, having more time for your hobbies, starting your passion business, or simply gaining more control over how you spend your days, it’s time to break free from the traditional career drudgery.

Redefining wealth

Middle-class Americans tend to follow a traditional path. They work a nine-to-five job for thirty to forty years, save about ten to fifteen percent of their modest annual incomes, and hope they’ve saved enough to retire at age 65. Unfortunately, this approach typically provides only a modest amount of financial security in retirement. But there is an alternative formula that promises true financial freedom much sooner.

The key to this formula is frugality. Frugality isn’t about limiting yourself – it’s a strategic choice that opens doors to opportunities that would otherwise remain unavailable. By dramatically cutting down on expenses now and aggressively investing the excess savings, your money can compound rapidly. So rapidly, in fact, that in just five to ten years, passive income from your investments can cover all of your living costs. At that point, you can actually opt to quit wage-paying work entirely!

So how does it all work? Well, first off, this blueprint specifically targets middle class full-time employees starting out with little savings. So, if this isn’t you, keep in mind that what’s to come might not apply.

If that description does fit you, then first and foremost, you need to understand one thing: real wealth doesn’t lie where tradition thinks it does – meaning retirement savings or home equity. Instead, it lies in accessible, after-tax cash. Having a sizable cash reserve means you have options. To obtain that cash reserve, you need to cut your expenses –⁠ radically. Your goal should be to accumulate approximately a year’s worth of living expenses in savings – around $25,000 total. This is by far the hardest part of the overall strategy, but it’s well worth it for the options it provides.

This capital cushion buys you crucial breathing room to consider entirely new opportunities. With it, you can pursue entrepreneurial projects or accept a new job with lower base compensation but a more lucrative long-term trajectory. Plus, savings are shielded from taxation, while income gets haircut after haircut. Early in the wealth accumulation journey, your efforts are better spent cutting costs than trying to raise your salary.

So, how do you actually start cutting costs and become more frugal? It all starts with your mindset.

Frugality for freedom

Optimizing spending for a low-cost lifestyle is a challenging, gradual process similar to building a business. It takes months or years of incremental change in both mindset and daily habits before frugality starts to feel natural and even empowering.

How can you stay motivated and committed to making all those little everyday sacrifices in the long term? What’s needed is an emotional hunger for total autonomy and early financial freedom. If you lack a crystal clear “why,” then consistency is nearly impossible, as short-term wants will always take precedence over long-term goals. But if you keep your motivation front and center, you turn frugality from dreary self-denial into purposeful progress.

After your mindset is rock-solid, you can get into the nitty-gritty. Where is your money currently going? For the average middle-class American earner, the lion’s share of expenses go to taxes, housing, transportation, food, insurance, and healthcare. Surprisingly, it’s not the small indulgences like entertainment or apparel that significantly impact your budget, but rather the major expenses like rent or mortgage, commuting costs, and dining habits.

Focusing on these significant expenses is key to accelerating your journey to financial independence. Reducing housing costs, for instance, can be achieved by opting for more affordable living arrangements, like downsizing or choosing to share an apartment.

Transportation is another major expense. Rethinking your commute can lead to substantial savings and health benefits. Whether it’s biking to work or moving closer to your job, reducing reliance on cars can greatly impact both your wallet and your well-being.

Food expenses, often inflated by dining out, can be controlled by preparing meals at home with healthy ingredients from affordable grocery stores. This doesn’t mean switching all your meals from salads to ramen – it would be a poor choice to eat cheap, unhealthy food just to save money. Significantly reducing the amount you spend on eating out is enough.

In the realm of entertainment, it’s important to recognize that eliminating small pleasures isn’t necessary. You don’t actually need to cut down on your beer, coffee, or shoe budget unless you’re spending thousands a month. It’s much more important to focus on cutting down on the larger expenses we’ve already discussed. If you enjoy purchasing new clothing to the tune of $100 or $200 per month, then go for it. But do watch out for subscriptions –⁠ don’t forget what you’re paying for and cancel any unused subscriptions that renew automatically.

And finally, mentally reframe your cost-cutting habits as “lifestyle design” choices. This reveals places for dramatic savings without the need to conceptualize it as making huge sacrifices.

Extending your financial runway

Now that you’ve built up your savings fund, it’s time to put it to good use to extend your financial runway. That process involves three steps.

The first step is creating an emergency fund of $1,000 to $2,000. This fund serves as a safety net for unforeseen expenses, ensuring that small financial setbacks don’t spiral into larger problems. It provides peace of mind and stability, allowing you to focus on the next steps without the worry of immediate financial emergencies.

The second step in extending your financial runway is tackling “bad debts” – high-interest loans, fines, and debts that negatively impact credit scores. These debts are a drain on financial resources, and clearing them should be a priority. Try a method like the Debt Snowball approach. This method focuses on paying off smaller debts first for psychological wins and then targeting high-interest debts for financial efficiency. This step is about taking control of your financial obligations and stopping the cycle of debt accumulation.

Good debts, such as mortgages or low-interest personal loans, require a different approach. They don’t necessarily need to be paid off immediately if the funds can be used more effectively elsewhere. The key is to balance debt repayment with building a financial runway, making smart decisions about debt management to pave the way for financial growth.

Improving your credit score is another critical aspect of this second step. A good credit score opens up numerous financial opportunities, from housing options to career advancements. Regularly monitoring credit reports, correcting errors, and responsibly managing debts are essential practices for boosting credit scores.

The final step to extending your financial runway involves accumulating a significant amount of accessible, liquid wealth, typically between $10,000 to $25,000. This wealth should be readily available and designated for advancing your financial position. It acts as a buffer, enabling you to explore opportunities like property investment or career shifts without the immediate pressure of financial constraints.

These three steps form the bedrock of financial independence. They require disciplined saving, smart debt management, and strategic financial decisions. Next, we’ll look at an innovative way to turn your largest expense –⁠ housing –⁠ into an income-generating machine.

House-hacking

Housing is most people’s biggest expense. But what many don’t realize is that it doesn’t have to be a liability. With smart strategies, your home can actually make you money instead of costing you.

The most common approach people take to real estate is stretching their finances to buy the most expensive, prestigious property possible. This “luxury home” strategy often pushes people to the brink, limiting their career options and ability to save. Another route is purchasing a reasonably affordable place just to stop paying rent. This is less risky, but it still exposes buyers to the whims of the housing market.

A smarter tactic is buying a property well within your means that would also make sense as a rental if you had to move. This provides options –⁠ live in it, rent it out at market rates, or sell later. Going further, some use a “live-in flip” strategy to buy a fixer-upper, renovate it while residing there, then sell for a tidy profit.

But the best way of all to leverage housing for wealth-building is called house-hacking. This involves buying a multi-unit dwelling and living in one part while renting the rest out at rates that cover or exceed the mortgage. This leads to living for very low cost while rapidly building equity.

House-hacking puts most buyers way ahead of normal homeowners and lightyears ahead of renters in terms of flexibility and wealth creation. It eliminates housing as a major expense while generating cash flow. Even in expensive areas, creative investing can lead to outsized returns.

Before you immediately start house-hacking, there are some key questions you need to answer about the property you’re thinking of buying. First: can you afford it with conventional financing? Second: are you willing to live there? Third: will it generate cash flow with and without you occupying part of it? And fourth: does it have appreciation potential from market trends or value-add upgrades? Run the numbers to satisfy these criteria.

And then the choice is crystal clear: either saddle yourself with a traditional property that eats savings and limits options, or house hack your way to financial abundance.

Accumulating assets

The concept of financial freedom is defined as the ability to sustain one’s lifestyle through passive income, independent of active employment. This is achieved when the returns from your assets surpass your living expenses.

Achieving financial freedom involves a strategic approach to asset acquisition and investment returns. Real assets, such as rental properties, stocks, and income-generating businesses, are key to generating sustainable income and appreciating value. In contrast, false assets, like financed cars, homes, and degrees, often lead to financial setbacks and delayed freedom.

Another key tenet to achieving financial freedom is to never spend away the principal amount invested. Consider Kristi’s case. Kristi buys a rental property with her savings. After a year, the property generates a profit through rental income and appreciation in value. Kristi understands that the principal –⁠ the initial investment –⁠ must remain unused. She can use the profit for expenditures or reinvest it, but the original investment remains dedicated to generating future returns.

Building wealth requires not just earning money but also saving and managing it effectively. That’s how you accumulate capital. Knowledge plays a critical role in this, by enhancing investment outcomes, particularly in areas where the investor has direct control, like real estate.

You also need to understand the difference between volatility and risk. Stocks, though more volatile, are not inherently riskier than bonds in the long-term. Successful long-term investment strategies focus on asset classes likely to yield the greatest wealth over time, rather than overly diversified portfolios designed primarily to minimize short-term losses.

Remember that effective investments are those that align with an individual’s unique financial situation. Often, the best returns come from investments that reduce monthly expenses, effectively increasing wealth. Innovative investors realize that lowering costs can yield higher returns than traditional investments.

By adhering to these principles and understanding the nuances of effective investing, individuals can pave their way toward early financial freedom, where their investments not only cover their current living expenses but also ensure ongoing wealth growth and sustainability.

Essential tracking techniques

Now that you’ve learned ways to cut expenses and generate passive income, it’s time to fine-tune your results. The key here is to track, track, track. Monitoring your net worth, spending, income, and time usage is a critical starting point for financial success. The goal here isn’t to become a perfect user of time or money. It’s about continual improvement and progress toward your long-term goals.

Let’s start with net worth. Real net worth consists of your total assets minus your debts. But in our customized calculation, you don’t include liabilities like oversized houses or luxury cars. These are cut because they often imprison their owners in jobs they dislike just to fund payments. True assets that count towards the calculation are things like dividend stocks, rental properties, or profitable side businesses that bring in passive income.

Auditing every expense daily unveils opportunities to tighten spending across various lifestyle categories. For example, avoiding takeout and cooking more frequently could free up a few hundred dollars every month. Getting this granular also quantifies the monthly cost of your desired lifestyle, helping you understand the level of passive income you’ll need to replace your paycheck.

Setting SMART objectives is also important. SMART is an acronym that stands for Specific, Measurable, Achievable, Relevant and Time-bound. Daily, weekly and annual SMART financial objectives focus your efforts, allowing you to document your plans and cross off your accomplishments. Checking your monthly bank balances without context means nothing. But tallying dividends, rental profits, and money saved annually displays intentional progress.

Of course, spreadsheets never tell the whole story. Emotion and intuition are essential counterbalances to the cold hard numbers. Ask the insightful questions, knowing that statistics only display one version of reality among endless possibilities. Perhaps you’ve been offered a high-paying job, but you just feel like there’s something wrong with it. If that’s the case, don’t take the job! This is something the numbers alone can’t tell you.

Tracking your money flows correctly is the final touch on your journey to financial freedom. Whether you’re starting from scratch or seeking to escape a financial rut, the principles we’ve outlined serve as a beacon, guiding you toward a future where financial worries are a thing of the past, and your dreams are within reach.

Conclusion

To achieve early financial freedom, you need to track your finances, eliminate waste, invest aggressively in income-producing assets, and make this quest central to your lifestyle. Do this diligently, and you can design your ideal life, quitting the salaried job you dislike and achieving financial freedom at a much earlier age than you ever thought possible.

About the Author

Scott Trench

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