‘Money’s a People Game’: Grant Cardone’s Three Essential Money Lessons for Real Wealth

In a world where financial literacy is more crucial than ever, younger Americans are increasingly seeking guidance from those who have successfully navigated the path to wealth. One such figure is Grant Cardone, a multimillionaire real estate investor and entrepreneur known for his rags-to-riches story. In a recent interview on Lewis Howes’ podcast, The School of Greatness, Cardone shared invaluable lessons about money that he would impart to his children. These insights not only reflect his personal experiences but also serve as a roadmap for anyone looking to build and sustain wealth.

Let’s delve into Cardone’s three key money lessons and explore how they can be applied to your financial journey.

1. Money is a People Game

Cardone emphasizes that “money’s a people game,” a sentiment that resonates with the adage, “your network is your net worth.” This principle underscores the importance of relationships in achieving financial success.

Building a robust network can open doors to opportunities that might otherwise remain closed. While it may be challenging to connect with billionaires, you can still surround yourself with individuals who possess financial acumen and experience.

Consider seeking out mentors or joining networking groups where you can meet like-minded individuals. Additionally, working with a qualified financial advisor can significantly enhance your financial literacy and decision-making. Research from Northwestern Mutual indicates that 64% of Americans who consult a financial advisor feel more secure about their finances compared to just 29% who attempt to navigate their financial journey alone.

If you’re interested in finding a financial advisor, platforms like Zoe Financial can help you connect with vetted professionals tailored to your specific needs. Completing a quick quiz about your financial goals can set you on the path to finding the right advisor for you.

2. Don’t Lose Money

Cardone echoes the wisdom of investing legend Warren Buffett, who famously stated, “The first rule of an investment is don’t lose money. And the second rule is: don’t forget the first rule.” This mantra highlights the critical importance of capital preservation in investing.

Losing money can have a compounding effect on your financial health. For instance, if you lose 20% on a $1,000 investment, you’ll need a 25% gain just to break even. This reality underscores the necessity of making informed investment choices and avoiding high-risk ventures that could jeopardize your capital.

To mitigate the risk of loss, consider safer investment vehicles, such as certificates of deposit (CDs) or high-yield savings accounts. For example, the Wealthfront Cash Account offers an impressive 5.00% APY, significantly higher than the national average. By putting your money in a secure account, you can grow your savings without the anxiety of market volatility.

3. Invest with Risk in Mind

Cardone advises that investors must balance risk and reward, cautioning against the temptation to chase high returns at the expense of prudent risk management. He states, “If you get 7% or 8% on your money every year, you’ll be so rich when you need it — if you don’t lose it.”

Understanding the risks associated with various investment strategies is crucial. For instance, frequent leveraged trading can increase the likelihood of bankruptcy, as highlighted in a study published in Nature. As of May 2024, investors have accumulated over $809 billion in margin debt, indicating a trend toward riskier trading practices.

To safeguard your investments, consider diversifying your portfolio across different asset classes. Platforms like Fundrise offer accessible opportunities to invest in real estate, private debt, and venture capital, allowing you to spread risk while potentially earning dividends. With over two million investors and more than $7 billion in managed assets, Fundrise can help you build a diversified portfolio tailored to your financial goals.

Conclusion

Grant Cardone’s money lessons serve as a powerful reminder that building wealth is not just about making money; it’s about making informed decisions, cultivating relationships, and managing risk effectively. By adopting these principles, younger Americans can pave their way toward financial security and prosperity.

As you embark on your financial journey, remember that wealth is not merely a destination but a continuous process of learning, adapting, and growing. Whether you choose to expand your network, prioritize capital preservation, or invest wisely with an eye on risk, the path to real wealth is within your reach.

This article is intended for informational purposes only and should not be construed as financial advice. Always consult with a qualified financial advisor before making investment decisions.