Mastering Wealth: The One Thing Grant Cardone Swears by for True Prosperity —
It’s Not Your Job or Frugality!
Date: October 30, 2023
If you’re aiming for genuine financial security, you might need to rethink your approach. Yes, you read it right, STOP SAVING! Grant Cardone, a real estate expert, took to X, formerly Twitter, to share some financial wisdom with Americans.
Cardone’s message is clear: relying solely on your regular job, excessive saving, overspending, and fear won’t lead to true wealth. He emphasizes that the path to genuine financial stability, well beyond just accumulating thousands of dollars, lies in financial management.
Cardone’s own life experiences have deeply influenced this perspective. He witnessed his parents saving diligently but never putting their money to work due to their fear of losing it all. This fear is a common concern among many who lack the practical knowledge of effective financial planning. In Cardone’s view, certain asset classes, like real estate, offer the opportunity to invest without risking your money, providing consistent income and growth over time.
While Cardone’s journey from humble beginnings to building a substantial real estate business valued at over $4 billion with nearly 8,000 income-producing properties is impressive, it’s essential to approach financial advice from experts like Cardone with a degree of caution. Recent legal disputes have accused him of misleading investors, but Cardone has defended his stance in a LinkedIn post.
As with any financial guidance, the best approach depends on your unique situation. If you’re inspired by Cardone’s accomplishments, here are three methods to initiate financial management in real estate without requiring substantial upfront capital:
Real Estate Investment Trusts (REITs)
These allow you to participate in the real estate market without owning physical properties or dealing with the responsibilities of a landlord, such as tenant screening and property maintenance. REITs represent large portfolios of properties, including apartments, shopping centers, and office buildings. To qualify as an REIT, a company must distribute at least 90% of its taxable income to shareholders as dividends each year. This tax advantage allows them to provide steady returns.
However, it’s important to note that not all REITs are the same, and recent concerns have arisen about specific segments of the real estate market, such as office buildings. Residential real estate, on the other hand, appears to be more resilient. Generally, REITs are considered investments offering attractive returns, consistent dividends, and the potential for long-term growth.
Real Estate Exchange-Traded Funds (ETFs)
If you prefer a simplified approach to real estate investing without delving into the complexities of stock trading, consider exchange-traded funds (ETFs). Think of ETFs as diversified packages of various real estate stocks bundled together. They trade on major stock exchanges, offering you the flexibility to buy or sell them easily.
There are two main types of ETFs: those that passively track an index and those that are actively managed. While each ETF comes with management fees, they offer the benefit of broad exposure to real estate. Two examples to explore are the Vanguard Real Estate ETF (VNQ) and the Real Estate Select Sector SPDR Fund (XLRE).
Crowdfunding Platforms
The crowdfunding approach, endorsed by Cardone, enables everyday investors to pool their resources and invest in real estate collectively. Through crowdfunding platforms, you can purchase a portion of physical real estate, from rental properties to commercial spaces, or even digital real estate. Some options cater to accredited investors with higher minimum investments, while others allow smaller investments, sometimes as low as $100.
These crowdfunding platforms aim to simplify the real estate investment process and reduce the barriers to entry, making real estate financial planning accessible to a broader audience. However, it’s essential to be aware that sponsors of crowdfunded real estate projects typically charge fees, which can range from 0.5% to 2.5% of your investment.
