8 Genius Things Grant Cardone Says To Do With Your Money
Grant Cardone is a successful real estate investor and entrepreneur worth millions. People often ask him for financial advice because he has had so much success. The following eight money tips are among his best.
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Add Multiple Reliable Streams of Income
First, Cardone says you should create multiple income streams while building your net worth. You might need to start small, but beginning now is important. Doing so will get you into the habit of looking for ways to diversify and increase your income.
Some possible sources of new income include:
Working part-time job opportunities like driving for a rideshare or food delivery company
Investing in real estate to create rental income
Building a portfolio of stocks that pay dividends
Turning your hobby into a business via Etsy, Fiverr and similar platforms
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Save To Invest
Cardone believes the only reason to save is to invest. He recommends putting your investment funds into an account you never withdraw from even in an emergency. This, he says, forces you to continue increasing your income.
As you start thinking about how to invest your money, Cardone advises against diversification. He recommends looking hard for winning investment opportunities and putting in a high percentage of your net worth when you find one.
However, this strategy can be risky. If you put a lot of your net worth into a single asset and its value goes down, it could take years to recover financially. Cardone’s philosophy is that downside risk is worth assuming if it gives you multimillion-dollar upside.
Avoid Debt That Doesn’t Pay You
Some financial experts say you should avoid debt at all costs. But Cardone says not all debt is bad. He believes it can be an effective tool for increasing your net worth as long as you use it to generate more income for yourself.
“Make it a rule that you never use debt that won’t make you money,” Cardone says on his blog. He uses debt to increase his exposure when investing in real estate. But he won’t use it to fund a lifestyle upgrade like a new car or fancy house.
Pay Yourself First
Next, Cardone says you should always pay yourself first. He recommends setting a savings goal and taking money out of your paycheck to reach it before paying bills and other expenses. If you struggle to do this, Cardone says, it can be helpful to send yourself an invoice until you get into the habit.
Paying yourself first ensures saving remains your No. 1 financial priority. It can also encourage you to expand your income. If saving is the first line item in your budget and you can’t afford your remaining expenses, Cardone says to use that as motivation to get more income — not as a reason to throw your savings goals out the window.
Invest in Real Estate
Cardone is such a big believer in using real estate to build your fortune that he wrote a book on it. He said real estate is “the only investment I’ve ever made that allowed me to turn $3,000 into billions.” That may be a bit hyperbolic, but his strategy is a bit unusual.
Cardone buys apartment buildings only in areas with positive migration flow. He’ll invest in a building only if it has 32 units or more. These properties generate cash flow for him, which he uses to invest in other real estate opportunities.
Another thing to note about Cardone’s real estate strategy is his reliance on partners. He raises money to fund new property purchases through his firm, Cardone Capital. This lets him invest in more buildings faster — a major reason he has been able to build a multi-billion-dollar real estate portfolio.
Build Your Brand To Cash in
Next, Cardone is a major believer in the power of personal brands. His “10X” philosophy is one of the main reasons he has become a well-known financial name. This has helped him increase his net worth substantially.
For example, Cardone has gotten incredible exposure by sharing his financial strategies. This helps him attract new investors for his upcoming real estate deals, which improves his returns. In his view, it’s worth investing your time, energy and cash into creating a brand for yourself. Doing so can generate dividends for years by giving you multiple opportunities for new income streams.
Limit Discretionary Spending to Passive Income Only
Discretionary spending is what you do with the money you have left after paying your bills and meeting your savings goal. Cardone tries to limit his discretionary spending to what he earns in passive income. This serves a few purposes.
First, it helps Cardone keep his spending in check. His passive income sets a maximum upper limit to how much he can use on nonessential purchases. This strategy also encourages Cardone to continue increasing his passive income. If he wants to buy more, he has to earn more. Adopting a similar mindset could lead you to a better financial future.
Collect Assets, Not Stuff
Finally, Cardone says you should focus on collecting assets — not things. For him, this means investing in more real estate and buying fewer luxury items. For the average person, it could mean putting $100 into your retirement account instead of buying a new shirt.
Things usually decline in value after you purchase them. Assets — when chosen well — go up in value over time. They increase your net worth, while purchasing luxury items decreases it.
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