3 Frugal Habits of Grant Cardone
Grant Cardone has reached a level of wealth where he no longer has to scrimp and save every time he shops online or hits the grocery store, but that doesn't mean he ignores the tenets of frugal living. Yes, he's a bestselling author, real estate investor and equity fund manager, but Cardone is also a passionate motivational speaker with advice for other Americans on building wealth.
Practicing what he preaches has gotten Cardone far and part of the way he maintains his vast fortune and budding empire is via these six frugal habits.
He Doesn't Spend Any of His Earned Income
Cardone believes that everyone should have multiple passive income streams on top of any regular salary they bring in with a full-time job. To maintain his wealth, he only spends his passive income or bonus revenue.
"If I can't pay for it out of passive income, I don't buy it," said Cardone. "I purchase nothing for myself out of earned income. I use ALL my earned income to reinvest in my company, my brand or to buy more income-producing real estate."
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He Doesn't Buy Anything That Isn't Tax-Deductible
The taxman waits for no one, so Cardone keeps taxes at the forefront of his mind when making purchase decisions. Not only does this save a lot of money in the long run, but it also saves a lot of headaches during tax season.
"If I can't write it off, I don't buy it," he said. "Purchases that are not deductible cost me twice as much as those I can write off and save me 40% on my taxes."
He Doesn't Make Impulse Purchases
Before buying anything, Cardone rates his potential purchase on a one-to-five scale, with one being "absolutely have to have it" and five being "it's absolutely not necessary."
"Fours and fives are never bought and threes are discussed," he said. "This keeps me from making dumb, impulsive, wasteful purchases."
He Uses Cash More Than Credit Cards
Cardone has said that one habit that helped him build financial freedom was opting for cash over credit cards. Many financial experts agree — including Dave Ramsey and Warren Buffett, who generally condemn credit card usage.
Either of those money experts is worth listening to, specifically Buffett, who has an estimated net worth of $150 billion.
But ... He Doesn't Keep a Lot of Cash in the Bank
Hoarding cash in the bank is, in the opinion of Cardone, a terrible habit. Though he recommends using cash for purchases, he thinks it's "trash" otherwise.
"Why do I say cash is trash?" Cardone said. "It's because if you keep cash in the bank, it's not going to pay you back money every month. You're not going to create cash flow by keeping your cash stored."
He Knows Delayed Gratification Is Key to Long-Term Success
Cardone emphasizes the power of delayed gratification as a cornerstone of his frugal approach to achieving all of his financial goals in the long run. In his early years, while friends indulged in luxury items like Rolexes and BMWs, Cardone chose a different path.
By refraining from immediate consumption, he harnessed the discipline to invest in his future. This principle underscores the idea that true wealth comes from patiently building assets rather than seeking instant gratification.
Gabrielle Olya and Nicole Spector contributed to the reporting for this article.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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