Set For Life

Set for Life by Scott Trench is a comprehensive financial guide that focuses on achieving financial independence through strategic saving, investing, and lifestyle optimization. The book emphasizes three main phases:

1. Building a strong financial foundation by saving $25,000 through aggressive cost-cutting of major expenses (housing, transportation, food) and maintaining a 50-75% savings rate.
2. Investing wisely and potentially house hacking to build wealth, aiming to reach $100,000 in investments while creating additional income streams.
3. Reaching financial independence by continuing to grow investments and passive income until work becomes optional.

My impression

The book stands out for its practical approach to wealth building, focusing on the "Big 3" expenses and emphasizing the importance of career development alongside financial management. Trench argues that by following this system, readers can achieve financial freedom in a relatively short time frame, typically 8-10 years.

The Key strategies that he recommends are living below your means, avoiding unnecessary debt, investing in income-producing assets, and continuously increasing your income through career advancement or entrepreneurship.

Overall, it is a good book about personal finances and self reflection about our life choices. He gives some good advice about minimalism and a frugal lifestyle.

Who should read it?

If you’re a 30-year-old person who feels like you want more for your life and your time. It's a good guide through the financial independence in the modern world of consumerism.

Highlight and Notes

The first 25.000 is the most difficult

The first 25,000 is the hardest and I can say from experience that is absolutely true so your number one goal when you're trying to reach Financial Independence is building up your first $25,000. We're going to call it the financial Runway, and it all starts with frugal living.

The Big 3

Scott Trench recommends a 50 to 75% savings rate which is actually what I did myself at the beginning, this involves taking care of your Big 3.

Your big three is Housing, Transportation and Food.

In fact, most people try to cut out the fun stuff at the beginning when they're trying to save money, and that's only about 5% of your budget. Generally is entertainment, it should actually be the last thing that you think about cutting, hmm you know your coffee, going out with friends, etc…

Unless it's like an extravagant amount, if it's reasonable, and you're truly enjoying this stuff it's okay to keep that in your budget instead look at the considerable things that can take hundreds or thousands of euros every single month.

1. The vehicle
   The first way to save money is your vehicle, Scott recommends never buying a new car trying to buy an older used car that you can buy for cash because at the end of the day, a car gets you from point A to point B. At the beginning of the journey of your financial independence, having a car that is not killing you is a complete game changer.
2. The food
   When it comes to food, shopping at a different (cheaper 😜) grocery store meal, planning cooking at home and going out to eat a lot less, all of those will help you save more money which at the beginning here is super important.
3. The house
   Try to have the lowest rent cost you can. Even if it means going back to live with your parents or living with a roommate.

Buy good enough

Buying good enough will end up actually saving you a lot of money. So this is that in between space of buying things that are extremely cheap that you're going to have to fix in a few years because they're cheap and buying the most expensive version of something because it's the best instead try to find this Middle Ground* where you're evaluating every purchase that you make with good enough.

Ladder to 25.000

It starts off with building up a 1.000€ to 2.000€ emergency fund, you generally want to keep that in a high-interest savings account like Livret A (in France 🇫🇷) where I keep mine.

Then eventually building up to save your first 10.000€ all the way up to your first 25.000€ which will buy you your initial chunk of Freedom this first 25,000€ could take anywhere from a year to like 5 years. The more extreme you're willing to go with, like moving, like downgrading your car, with all of these things the faster you will get there and the faster you get to 100.000€ and then eventually to freedom.

Ladder to 100.000

Repeat all you have done to reach 25K€ but in a more reasonable way, and start to invest more of your money, while building passive incomes.