Most people know how to make money, but only a few know how to multiply it over time. Even small things like when is the right time to buy something are often forgotten.
Millionaire real estate entrepreneur Grant Cardone says it took him 20 years to learn from his financial mistakes. He managed to earn millions of dollars before the end.
To achieve that, he must apply extraordinary discipline and invest as much money as possible in income-generating assets. However, he now earns income from the 18 companies he's built, and the 12,000 apartments he owns that generate passive income.
Reported by CNBC, there are at least 4 financial rules he followed that helped him become rich.
1. Don't overspend unless you are sure you can save money
Often, when a person has more income than before, their lifestyle and spending habits also improve. However, Cardon uses the principle of not making large purchases unless he is sure that he can save twice as much.
This is done because it helps to avoid overspending. Even this is useful to give yourself plenty of time to reconsider whether the purchase is really necessary.
So instead of spending a lot of money on one transaction. The money can be useful to increase the business and personal income.
2. Don't buy something that can be rented
This may not be common because when you have a lot of money, people tend to have certain things. But doing so can help you avoid the high monthly payments and maintenance costs associated with ownership.
For example, Cardon told me that he lived in a rented house for 10 years. This helped him free up more money to invest in real estate that would generate more income. He bought a house with cash only after he was able to save a lot of money because the units usually fetch a lot of money.
3. Never take money to impress others
It is important to understand that accumulating wealth for the future is more important than buying unnecessary things. Even if you can afford it, never buy something because of your dignity and want to look good in front of other people.
Instead, the money available can be used to invest and build personal wealth. According to Cardon, though, he can do more than pay for expensive things now. However, he was always frugal and tried to live below his means to earn more money.
4. Withdraw money only from the appropriate income
For example, if he earns $100,000 a year from primary income and $20,000 from discretionary income. Try to only spend money from reasonable income beyond basic living expenses. All these rules require a lot of discipline and may not work for everyone.
Sometimes even Cardon wonders why he works so hard but can't enjoy the fruits of his labor. But he found that by following these rules for two decades, he was able to survive several major recessions and global pandemics while remaining a millionaire.