Grant Cardone, 64 years old, is a sales trainer, speaker, and entrepreneur in the real estate and automotive industries in the US. He is also the author of the best-selling books The 10X Rule and If You’re Not First, You’re Last.
Sharing on CNBC, he said that making money is only a small part of the wealth-building process. More importantly, you need to know what to spend on and what not to. He spent 20 years trying and making mistakes in spending before having millions of dollars.
“I had to learn to spend discipline, invest in assets to generate money. Currently, I have income from 18 companies that I own and own 12,000 apartments,” the millionaire said.
As of September, Cardone has a net worth of 600 million USD, according to Celebrity Net Worth.
Here are 4 spending principles to become rich, according to Cardone’s advice.
Don’t buy luxury items until you have double the value of the item
After starting to make money, Cardone did not immediately reward himself with a luxury car or expensive travel. He set his own rule that if he wants to buy a luxury watch or a house, he must have double the value of those items.
This will help Cardone not go over budget, have time to consider whether he really needs to buy them or not.
Don’t buy when you can rent
While striving to become a millionaire, the only assets that Cardone bought were those that could generate income, such as rental properties.
In 2012, he sold his house and then rented for nearly 10 years. This helped him have more money to invest in real estate and make a profit. After saving a large amount of money, he would buy another property.
Until now, Cardone still rents cars but never extends the contract for more than 24 months, even if doing so would get a better price. Because a lot can change in 2 years and he always tries to avoid being stuck with a car that does not meet his needs.
Don’t spend to impress others
Cardone’s goal is to create a wealthy estate for his family. That is more important to him than buying things just to enhance his reputation.
So even when he has enough ability to buy a luxury item, he also does not spend money just to impress friends of the same age. Instead, he invests at a higher rate and builds his own wealth.
Currently, he admits that he is still quite frugal, not interested in glamour and tries to live within his means.
Cardone’s goal has always been to create a wealthy estate for his family. That is more important to him than buying things he doesn’t need.
Only spend passive income
The final rule, Cardone says, is to only spend with passive income.
For example, if earning $100,000 a year from a main job and $20,000 a year from passive income, he would only spend $20,000 on non-fixed living expenses, such as shopping, travel, entertainment, etc.
All his money spending rules require discipline and not everyone can apply them.
“Sometimes, I wonder why I work so hard but don’t feel comfortable enjoying the fruits of my labor. But because of maintaining my rules for 2 decades, I have been able to overcome some major economic recessions and the Covid-19 pandemic,” he said.
According to Zing
The secrets wealthy people teach their children about finance: teaching these things early leads to success and wealth
Financial mindset and financial management skills are crucial to succeed in life. It is essential for individuals to learn these skills from an early age, and parents play a vital role in teaching them. The sooner children are exposed to the principles of financial thinking, the better equipped they will be to handle their finances in the future.
