Member-only story
“Worst Investment Ever?” Guru’s Advice on Social Media Is Dangerously Wrong
Busting another real-estate mogul’s proclamation that could cost you over $100k
Social media makes it far too easy for “gurus” to make proclamations that reach millions of people.
That wouldn’t be so bad if only their advice wasn’t so dangerous to our financial well-being!
Case in Point: Grant Cardone’s Recent Instagram Interview
In a June 2023 Instagram interview segment, Grant Cardone, entrepreneur, and real estate investor reportedly worth $600 million, implied that 2/3 of Americans (US homeownership rate is 66%) are making a stupid mistake.
He said, “Buying a house — worst investment you’ll ever make in your entire life…
“Average house here is $576k… Now you need 12% for broker fees, let’s say you keep the house 10 years. You need 10% in maintenance fees, it’s 1% a year... It’s about 2% in property taxes every year. That’s 20%… And it’s probably 7% to the bank, so that’s 70%… Total those up it’s 112%. A $576 home will have to be sold for $1.2 million in 10 years. You’re not going to sell it for that… To break even. Dead money. And you had to put $100k down to do this deal…
“They’re serving a master. They’ll borrow money from the Bank of America, and then if they can get some more money, they’ll have a little retirement account that funds Wall Street. This is a big game bro!
“Rather than buying one house, rent where you live, and take that $100k and go buy a piece of real estate where other people live. I just don’t need to own a home on the way up. I need to own assets that pay me on the way up.
“And once I have enough cash flow from the assets, then if I want to go buy a house, or a watch, or a car, I buy it out of the passive income.”
He isn’t the first real estate “guru” to dis the majority of us.
That questionable “honor” belongs to Australian real estate mogul Tim Gurner, who famously said Millennials can’t buy a house because they waste their money on “avocado toasts.”
