Grant Cardone: The No. 1 Thing the Middle Class Doesn’t Spend Enough Money On
The things that have been traditionally thought of as integral parts of the middle-class American dream are no longer serving this swath of the population, said Grant Cardone, private equity fund manager and real estate investor.
“The very things that symbolize the middle class — cars, homes and college — are strangling, suffocating and dismissing the middle class as a wealth class,” he told GOBankingRates.
Instead of spending money on these cars, homes and degrees, Cardone believes there is one thing the middle class should be spending their money on.
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The Middle Class Should Buy Assets That Create Wealth
What differentiates how the middle class and the wealthy spend their money is that the wealthy use their money to make more money.
“The wealthy don’t buy stuff to symbolize wealth,” Cardone wrote on X. “They invest in assets in the beginning to create wealth — later they borrow against the asset’s increase to buy stuff.”
Cardone’s go-to asset for creating wealth is real estate — not the home you live in, but a property that you can immediately make money off of.
“Real estate is perfect because real estate distributes cash flow every month, as opposed to AT&T stock [that] only generates cash flow every quarter,” he told GOBankingRates.
While investing in real estate might seem out of reach for the middle class, it’s possible with discipline and proper planning.
“Let’s say I’m working for a company, I make $60,000 a year and I get a bonus at Christmastime of $5,000. Do not use the $5,000 to improve the quality of your life or buy presents,” Cardone said. “Invest your Christmas money in an asset, a $100,000, four-unit [rental property] that will pay you $2,000 a month next year.”
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This article originally appeared on GOBankingRates.com: Grant Cardone: The No. 1 Thing the Middle Class Doesn’t Spend Enough Money On
