The idea of becoming set for life may seem like a distant impossibility. However, Scott Trench shares how you can become set for life in his book – Set for Life: Dominate Life, Money, and The American Dream.
So what does it take to change your financial future and reach a point where you never have to work again? Let’s take a closer look.
Set for Life
In his book, Scott Trench outlines the exact steps that anyone can take to completely transform their financial future. He walks you through the three phases you’ll need to work through in order to reach set for life status.
The three parts of this transformative book are:
- The First $25,000 is the Hardest
- From $25,000 to $100,000 Through Housing and Income Generation
- Moving from $100,000 to Financial Freedom
Although these three phases seem straightforward enough, you may be wondering if it is truly possible for anyone to become set for life. The good news is that it is possible for everyone to achieve this major financial milestone. The bad news is that it will take some serious hard work and dedication to make this happen. As you read the book, you will encounter the hard truths about your personal finances.
Without any sugar coating, Trench shares his advice in a straightforward style. You’ll learn what steps you need to take to reach financial freedom. But you will need to be honest with yourself in order to reach that goal.
Although some of the steps outlined in Set for Life may seem extreme, they offer a step-by-step process for you to reach financial freedom. If you can follow the steps, you’ll reach your financial goals. However, the journey will require the self-discipline to learn more about your money and stick to a budgeting plan to reach your goals.
How much money do you need to be set for life?
Before you start the journey of becoming set for life, it is a good idea to determine how much money you’ll actually need. Without a number in mind as a goal, it can be difficult to envision concrete progress towards the ultimate goal of financial freedom.
In order to be set for life, you would likely want to become permanently independent of a paycheck.
Most people equate the idea of becoming set for life with the goal of becoming financially independent, AKA reaching FI. Essentially, reaching financial independence allows you to say no to paid work that doesn't bring joy to your life. Instead, you can choose to focus on activities and things that bring value to your life.
Although you would have the choice to walk away from work forever, many choose to work on passion projects. With that, you don’t have to completely retire to be financially independent. But having the option is a very freeing moment.
As a general rule of thumb, many consider themselves financially independent when they reach a net worth of 25 times your annual expenses. This number is based on the 4% rule outlined in the Trinity Study. For example, let’s say you spend $50,000 per year. With the goal of 25x your annual expenses, you would need to reach a net worth of $1,250,000 to be financially free.
You can determine your own financial milestone that you’d need to hit to be set for life. Simply multiply your annual expenses by 25. If you don’t feel comfortable with 25x your expenses, you could boost your anticipated expenses with fatFIRE in mind. Or cut back to the bare essentials to hit a leanFIRE goal. Take some time to consider your own lifestyle choices and risk tolerance to find your unique FI number.
What do you need to do to be set for life?
So what does it take to become set for life? Here are the core principles that Trench outlines in the book. Through a combination of these strategies and lifestyle choices, you can reach financial independence.
Personal finance discipline
If you are looking to become set for life, it likely goes without saying that you’ll need tremendous personal finance discipline to make that a reality. After all, completely changing the course of your financial trajectory will require a new lifestyle and a long-term mindset. Unfortunately, you cannot reach financial independence in a matter of weeks or months. Instead, it will likely take years to reach your new financial goals.
Trench shares the importance of frugality, which will often require sacrifices. Since the first step is to build up to $25,000 in savings, you’ll likely need to make some major sacrifices to make that possible. As you build your savings, Trench advocates that you eliminate any bad debt as soon as possible.
Beyond eliminating bad debt, Trench outlines strategies to live within your means and work towards long term financial goals.
Mindful lifestyle choices
As you move through life, the choices you make a big impact on your personal finances. Even seemingly little choices like the food you eat and your daily commuting choices can add up to create a completely different financial future.
For example, choosing to cook your own meals and finding alternative commuting solutions can completely change your finances. Take a minute to explore our ideas to help you slash your food and transportation costs!
Even what you choose not tackle in your free time can greatly impact your financial future. For example, if you choose to pursue a side hustle or build a new skill set you could completely transform your journey to financial independence.
Trench shares many ideas to help you create a mindful lifestyle with your financial goals in mind.
A big component of Trench’s plan to achieve financial independence involves slashing your housing costs with the help of house hacking. Even if you aren’t able to completely eliminate your housing costs, cutting down on this major expense can transform your budget.
Imagine being able to save the hundreds, or thousands, of dollars that you typically spend on housing each month.
Are you interested in this life changing strategy? Take advantage of our extensive house hacking resources. Check out our ultimate guide to house hacking, our numerous house hacking case studies, and The House Hacking Podcast. Putting this plan into action could completely transform your ability to save and invest for your financial future.
Real estate investing
Beyond house hacking, real estate investing can be a great way to work towards your financial goal. You’ll find out more about real estate investing in part three of Trench’s plan. But you can learn the critical basics of real estate investing right now in our 101 guide for new real estate investors.
As a real estate investor, you can continue building wealth to achieve your financial independence goals.
How to move towards becoming set for life
Becoming set for life might sound like a dream too good to be true. But it is possible through strategic financial planning and lifestyle choices. Of course, it will not be an easy road and you should expect setbacks along the way. But it can be possible for anyone to reach their goal of financial independence.
A good place to start the process is by reading the book – Set for Life: Dominate Life, Money, and The American Dream. You’ll find clear directions on how to set up a bright financial future.
Also, take advantage of the free resources offered by FI by REI. A great place to start learning is with our ultimate guide to building your financial foundation.
Although it won’t happen overnight, you can start your journey to financial independence today.
The bottom line
The principles outlined by Trench in Set for Life illuminate a clear path towards a bright financial future. Through a clear style that will not seek to sugarcoat the truth, you can learn exactly how to work towards a financially free future.
As you start the journey towards becoming set for life, the best time to get started is now. Whether you want to learn more about personal finance or start planning your first house hack, get started today!