If you want to know how wealthy individuals manage their money, listen up. Billionaire businessman Grant Cardone is one of them, and he isn’t keeping this secret to himself. According to him, it’s not just about how much money you make, it’s about what you do with it.
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In an interview with content creator Jack Neel, Cardone pulled back the curtain on two powerful wealth-building strategies that the super-rich use to grow and protect their money. These habits go beyond budgeting and saving as they’re all about leveraging assets and income in ways that multiply wealth over time.
Keep reading to learn more about Cardone’s strategies, and how you can try them yourself.
Earn and Use Passive Income
In the interview, Cardone highlighted the importance of passive income to the wealthiest members of the population. He said these people have found a way to earn money that requires little to no effort, and they’re cashing in on it.
Personally, Cardone said he earns passive income monthly. In fact, he said people should live off only their passive income. He said the ultra-wealthy never touch their personal capital.
“This is what the super-rich do,” he said. “They only use their passive income.”
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Invest in Real Estate
To say Cardone knows a lot about real estate is an understatement. He’s the owner of private equity real estate firm Cardone Capital, which has a multifamily portfolio of assets worth more than $5.3 billion. This is also where much of his passive income originates.
While you might think this means he solidly believes in homeownership, this isn’t the case. In his interview with Neel, he explained that the exact opposite is true. “Buying a house is the worst investment. It’s dead money, man, like you’re not going to make money there, and you’re going to pay for it,” he said.
Instead of buying a single-family home to live in, he advised renting and purchasing four units in the same neighborhood that provide cash flow. “Use the cash flow from the rentals to pay for where you live,” he said.
Of course, real estate isn’t the only way the ultra-wealthy earn passive income. Some may earn it from interest on bank accounts, dividends and bonds, just to name a few. In fact, it’s estimated that the average millionaire has about seven different revenue streams.
However, they’re earning passive income, and the wealthy have one thing in common, according to Cardone. They’re holding on tight to their personal capital and spending only their passive income.
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: 2 Things Grant Cardone Says the Super-Rich Do With Their Money
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