4 Wealth-Building Lessons From Set for Life (& How Living by Them Took Me From Kid Who Couldn’t Read to Millionaire at 27)
In 7th grade, I remember going into a room and taking tests all by myself. People would come into the room from time to time and ask me questions and then jot notes on a clipboard. What I didn’t know was that I was being tested for learning disabilities. At that time, my reading comprehension was horrendous, and my writing about the same. I struggled my way through most of school, later realizing I was dyslexic.
Looking back, I now see that being a “bad student” made me an outlier to the masses. It gave me a perspective the masses did not have. It gave me the ability to see things differently. That transitioned to career and financial choices as an adult. How thankful I am to be an outlier—because the standard career and financial paths that the masses continue to follow are terrible. Unfortunately, the norm is to spend the best hours of our day, during most days of the week, during most weeks of the year, during most years of our lives, trading our time for money and money for stuff until we die. No thanks.
Wanting to do something about these troubling norms, I thought for the longest time I would find some way to teach kids about financial education. I later realized that the fastest way to addresses these issues is to change the parents before they’ve even had kids. This very goal is what got me started writing for BiggerPockets. I wanted to reach as many of my peers as I could to share what I knew. I wanted to show young adults they didn’t have to take the beaten down path of financial struggles, working for 40, 50, or 60 years. I wanted them to know that there is a better way and that if a kid who could barely read could figure it out, so could they.
Teaching a Different Way
The single biggest challenge is bringing awareness and acceptance to this different way of using money. It isn’t easy to redirect the herd off the beaten path, but I know if we do, it will help so many. Mr. Trench says it best: “Our society falls short when the masses neglect to become aware of the fundamentals of wealth creation. This knowledge and the skills of patience and long-term thinking are learned and must be taught early. When that fails to happen, the wealthy continue to snowball into ever more powerful, almost mythical beings, while much of society doesn’t even know where to begin.”
In this pursuit to reach my peers, I have written articles such as:
- Millennials, at 75M Strong, You CAN Change the U.S. Economy: Here’s Your Wake-Up Call
- At Age 26, I’m on the Brink of Financial Freedom: Here’s How I Did It
- Why Making More Money is NOT the Solution to Your Financial Problems
- Starting Now is Good, But Starting Young is Great: How Time Affects Investing
Even my first BiggerPockets podcast episode was titled “Building a Real Estate Empire at a Young Age.”
A few years back, when I heard BiggerPockets was considering publishing a book targeting the young working professional to guide them off the beaten path of financial mediocrity, I offered to help any way I could and was excited for it to happen. Privately, I even hoped they would ask me to write it.
That book is now out, and the title is Set for Life, authored by BiggerPockets’ own Scott Trench. Last week, I listened to the book on Audible, and I was blown away. Mr. Trench did such a phenomenal job. I couldn’t have dreamed of producing a book of this quality. When I finished the book, I thought to myself, “If enough people read this, it will change the world.” I write this blog post to get behind every single word in Mr. Trench’s book and to promote it as much as possible because not only do I believe in it, but I have lived the advice he gives, and it took me from a kid who could barely read to financially free at the age of 27. If it can do that for me, it can do the same or greater for the masses who find themselves financially ignorant.
To encourage you to read and share Set For Life, I wanted to connect my own true story to some of Mr. Trench’s thoughts and quotes from the book.
Typically when I listen to or read a book, I pick out little nuggets of useful information. While reading Set for Life, I continuously caught myself thinking, “I agree with every single word Scott Trench has written” and kept that thought all the way through the end of the book.
Have you ever read a book and then watched the movie of that book? The book is always better, right? This article isn’t even the movie to Mr. Trench’s book; this is the 10-second movie trailer. I strongly encourage you to go pick up his book if you haven’t.
Now, just to be clear, I don’t work for BiggerPockets. I don’t stand to personally gain in any way from the sale of these books. I just really think the masses need this book now more than ever, and if I can help that happen by taking a day to write a blog post, I will.
4 Wealth-Building Lessons From Set for Life (& How Living by Them Took Me From Kid Who Couldn’t Read to Millionaire at 27)
1. Living frugally gives you opportunity.
Mr. Trench wrote Set for Life for the full-time wage earner with little to no wealth but aspirations of early financial freedom. That was me. While I didn't have the typical W-2 stream of income, I started my journey to financial freedom with little money and no experience. Instead of getting a 9-5 out of college, I did constructions projects for friends and family to make money.
Trench outlines the first step to becoming financially free in his book. This step is focusing on going from $0 to $25,000 in usable net worth by living frugally and saving one's money. Where the money comes from is irrelevant. It doesn't matter if that money comes from being an accountant, a garbage man, or a construction worker. It just has to be accumulated as quickly as possible in order to have the ability to execute on opportunities when they do arise.
“For most folks, the pursuit of early financial freedom comes from the ability to preserve earned income. The hard truth is that the first step in the process to escape the rat race is and always has been to begin preserving capital— frugality, savings, penny pinching, living on less” (Trench).
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I did this by living at the bottom of my means, and in little time, I had a solid nest egg I could use to start my investing snowball.
I was so pleased to see this first step to financial freedom included in Set for life because I believe it gets ignored in typical wealth-building advice. Instead, standard practice is to focus on increasing one’s means, boosting one’s income, creating new streams of income, etc. We all agree these are great paths to creating wealth, but what no book ever mentions is that it’s really hard in the beginning, and unless you are exceptional, it does, in fact, take money to make money. I am not exceptional. I had to build a nest egg of investable wealth by living frugally and so will most others who seek early financial freedom. Set for Life is the first book I have ever read that really addresses this fact and that clearly maps out a path to quickly navigate through it.
This first step is the hardest. As someone who has made it through the first step and on through the next few, I can assure you living frugally to build your usable wealth is necessary and worth it. It is not easy and never will be, but when you can set aside the short-term desires for the long-term benefits, you will achieve massive success quickly. One of my favorite quotes from the book that directly aligns with these thoughts is, “Emotions can be our enemies in the long-term, but in the short-term, they can be powerful allies. This directly applies to disciplined spending. Ask yourself the question, ‘Is that thing or event worth delaying financial freedom?’ A deep-rooted desire to obtain early financial freedom makes decision-making on purchases more rational, and it makes a frugal lifestyle far more achievable.”
2. House hacking can eliminate your largest cost.
In Set for Life, Mr. Trench shows us that the typical American spends 30%-50% of their income on housing. If you are doing this, it is like trying to run a marathon in knee-deep quicksand.
I was able to reach financial freedom at such a young age because I never once paid for my housing until I was already very close to financial freedom. I purchased a house hack at the age of 18 and rented out 4 rooms to friends for the next 5 years. This not only allowed me to live for free, but it actually cash flowed a bit as well. After leaving that house, my wife and I then moved into, renovated, and sold 5 houses in 5 years, doing live-in flips by utilizing great deals through the Homepath program. It wasn’t until after all of that when we took on the typical mortgage and housing expense, which at that time was more than covered by the income we had generated through the previous years of avoiding housing expenses.
Trench does a fantastic job of explaining how one can use a house hack or live-in flip to accelerate their path to financial freedom. I can tell you as someone who has done it that he is spot on. His direction and advice is useful and very achievable for anyone.
3. Long commutes will eat your wealth and time.
Mr. Trench is more passionate about reducing or eliminating your commuting cost than I am, but he is 100 percent correct, and even though I am not as passionate about removing this expense, you better believe I was back when I was clawing my way to build my nest egg. In Set for Life, you can read staggering stats concerning the time and money spent by the average American. It simply doesn’t make sense for anyone, especially those striving for early financial freedom.
Back when I was getting started on my path to early financial freedom, I was buying rentals properties, renovating them, and managing them. This was my full-time job. I identified an area where I wanted to purchase rentals and moved there. For the first two years of this job, I bought houses close enough to walk to work. This allowed me to work longer, eliminate wasteful trips, and, of course, reduce the expenses associated with commuting. All I had to do was move close to where I worked. It really is that simple.
Even today, I work from a home office. I avoid frequent drives for work and do what I can to keep commuting costs low and time efficiency high. If you are commuting 30 minutes or more to work every day, you have to read Set for Life!
4. You’ll get rich by doing it yourself.
Trench finally says what no one else will. In the beginning, you don’t make enough to hire the pros. Teach yourself how to do things, and you will reap the rewards in the long run. When you are wealthy enough to hire someone out, you will know what you hiring them to do rather than blindly throwing the problem and cash at them and crying for help.
If I had to pick one characteristic that sets myself apart from my peers and that has accelerated me to financial freedom at a young age, it’s the fact that I always did things myself back when I was building my nest egg. This included all those $25/hour jobs swinging a hammer, those $150/hour jobs running plumbing, those $200/hour jobs reviewing legal documents. I jumped in front of those income streams and soaked them all up before the “experts” could get to them. Now that I have increased my wealth, it makes much less sense to do some of those things myself. Still, while I was doing everything to accumulate wealth to begin building a foundation of early financial freedom, damn right it was worth the risk, headache, and struggle to do everything.
Related: Rethinking “Wealthy”: The 5-Step Ladder From Middle Class to Financial Freedom
Now I am a far more well-rounded businessman because I understand what I am hiring when I do hire it. When an attorney says it will take 10 hours to review a purchase agreement, I know that's not right, and I also know when the plumber tries to sell me a new hot water heater because my shower is dripping that that's not right. The list goes on and on. Because of my experiences doing it myself, I can now leverage that knowledge.
I write this blog not to give you the answer, but to direct you to the answer. I was a kid who could barely read. I was a bad student, and yet I have achieved early financial freedom. My peers ask me how to do it, and often I want so badly to be able to tell them, but unfortunately, they usually don’t have the time or desire to hear the real answer. From now on, I will have the answer for them. I will direct them to Mr. Trench’s book. When reading it, I felt as though it was a road map of the less traveled path that I have been walking for the past 10 years.
Finally, as Trench says in his book, “If you want different financial results, you need a different plan. This book offers that plan. Work hard, spend as little as possible. Invest the difference intelligently, set yourself up for life as early as you possibly can. No, it’s not easy. It will be up to you to decide if it’s worth it.”
[Set for Life by Scott Trench is now available in the BiggerPockets bookstore.]
What lessons do you believe we should be teaching kids so they don’t fall into a lifestyle of financial mediocrity? If you’ve read the book, what takeaways would you add to this list?
Be sure to leave your comments below!