Grant Cardone’s Legacy: The One Asset He Wants His Family to Keep
In the world of wealth accumulation and financial planning, few names resonate as strongly as Grant Cardone. Known for his dynamic approach to real estate investing and motivational speaking, Cardone has built an impressive empire. Recently, he shared a poignant insight into his estate planning that underscores the importance of real estate as a cornerstone of generational wealth. In a recent video on his YouTube channel, Cardone revealed that if he were to pass away, he has instructed his wife to sell their private jet and condo immediately, but to keep one vital asset: their extensive real estate portfolio.
The Importance of Real Estate in Wealth Preservation
For someone who has amassed a fortune primarily through real estate, it’s no surprise that Cardone’s estate plan revolves around this asset class. He believes that real estate will not only provide for his wife and children but will also support their church and charitable endeavors for generations to come. “It’ll take care of you, it’ll take care of the kids, it’ll take care of our church and charities for hundreds of years,” he stated in the video, emphasizing the long-term benefits of holding onto real estate.
Real Estate: A Durable Asset Class
One of the key reasons affluent families, like the Cardones, prioritize real estate is its durability. Unlike businesses that can become obsolete, real estate tends to retain its value over time. Cardone pointed out that a piece of real estate, such as an apartment complex, is likely to be in business longer than many modern tech companies, including giants like Facebook. This perspective highlights the stability that real estate can offer in an ever-changing economic landscape.
Historical Returns and Inflation Hedge
The historical performance of real estate further supports its status as a reliable investment. According to Chartered Financial Analyst Ben Carlson, U.S. real estate has delivered an average annual return of 4.2% from 1928 to 2023. Moreover, real estate investments tend to provide positive real returns over longer time horizons, making them an effective hedge against inflation. As the cost of living rises, so too do housing prices and rents, ensuring that real estate remains a valuable asset in an investor’s portfolio.
The Challenges of Entering the Real Estate Market
Despite its advantages, entering the real estate market has become increasingly challenging. Home prices have surged by 54% since 2019, according to the S&P CoreLogic Case-Shiller National Home Price Index. This rise in prices has made it more difficult for new investors to acquire property. However, there are alternatives for those looking to gain exposure to real estate without the hefty price tag of direct ownership.
Exploring Real Estate Investment Trusts (REITs)
For individuals who may not have the capital for a down payment or who cannot qualify for a mortgage, Real Estate Investment Trusts (REITs) present a viable option. REITs allow investors to pool their money to invest in a diversified portfolio of real estate assets, providing access to rental income from residential and commercial properties without the need for direct ownership. Popular REITs like Realty Income, Crown Castle, and Invitation Homes offer opportunities to invest in various sectors of the real estate market.
Additionally, niche REITs are available for those interested in specific markets. For example, Digital Realty Trust focuses on data centers, which are increasingly important in the age of artificial intelligence, while Lamar Advertising allows investors to participate in outdoor advertising and billboards.
Mortgage REITs: An Alternative Approach
Investors can also consider mortgage REITs, which provide exposure to the debt on properties. By investing in mortgage REITs like the iShares Mortgage Real Estate ETF, individuals can earn a portion of the mortgage payments made by property owners, offering another avenue for income generation.
Conclusion: Building Lasting Wealth Through Real Estate
Grant Cardone’s emphasis on real estate as the one asset he wants his family to retain underscores the importance of this asset class in building and preserving wealth. As families like the Cardones demonstrate, real estate can provide financial security and support charitable endeavors for generations. While the barriers to entry may be higher than in the past, there are still numerous ways for investors to gain exposure to real estate, whether through direct ownership or investment vehicles like REITs.
In a world where financial landscapes are constantly shifting, real estate remains a steadfast option for those looking to secure their financial future. By dedicating a portion of their portfolios to real estate assets, investors can take significant steps toward achieving lasting wealth and stability for themselves and their families.