Is Grant Cardone Out Of Touch? $300 Real Estate Investment Advice For Teens Sparks Debate

Grant Cardone, a well-known real estate mogul, New York Times bestselling author, and the founder of Cardone Capital, has recently ignited a firestorm of debate with his unconventional advice aimed at teenagers. During a recent podcast episode, Cardone urged young people to start investing in real estate as early as possible, suggesting that every 15-year-old should consider using their allowance to buy property. His advice? If you receive an allowance of $300 a month, invest it in real estate that generates a return of $30 a month, and only use that return while saving the principal.

The Controversial Advice

Cardone’s assertion that teens should dive into real estate investing has raised eyebrows and sparked criticism across social media platforms. Many listeners were quick to question the feasibility of his advice, with comments like, “Is it even legal for a 15-year-old to buy real estate?” and “Rich people are so out of touch.” These reactions highlight a growing concern that Cardone’s perspective may not align with the realities faced by most teenagers today.

In response to questions about how a typical teenager could accumulate the necessary funds, Cardone reminisced about his own youth, stating, “Allowance, side jobs, side hustles. I was 14 years old — I was working every weekend. I was mowing lawns, doing whatever I could to get some extra money.” While his determination is commendable, it raises the question: how many teens today have the same opportunities or motivation?

The Reality of Teen Finances

To understand the practicality of Cardone’s advice, we must examine the financial landscape for today’s youth. According to a recent study from Kids’ Money, most teenagers save between $548 and $720 annually, which translates to roughly $45 to $60 per month. Furthermore, only 22% of teens report having a solid understanding of investment strategies. This data suggests that the average teenager may struggle to save the $300 monthly allowance Cardone references, let alone invest it in real estate.

Moreover, the real estate market presents significant barriers to entry. The average monthly mortgage payment in the U.S. is around $2,200, making Cardone’s suggestion of investing $300 a month seem unrealistic for most teens. After accounting for property taxes, maintenance, and other associated costs, the idea of purchasing a property with such a limited budget appears far-fetched.

Alternative Investment Options

While the prospect of buying property outright may be out of reach for most teenagers, there are alternative avenues for young investors to explore. One viable option is investing in Real Estate Investment Trusts (REITs), which allow individuals to buy shares in portfolios of real estate assets. This approach enables teens to invest smaller amounts of money while still gaining exposure to the real estate market.

Another option is real estate crowdfunding platforms like Fundrise or Crowdstreet, which allow individuals to pool their resources to invest in larger real estate projects. These platforms often have lower minimum investment requirements, making them more accessible for young investors who may not have substantial capital.

The Value of Early Investment

Despite the criticisms surrounding Cardone’s advice, there is merit in encouraging young people to start investing early. The earlier one begins to invest, the more time their money has to grow through the power of compound interest. Teaching teens about financial literacy and investment strategies can empower them to make informed decisions about their financial futures.

While Cardone’s specific suggestion may not be practical for the average teenager, the underlying principle of fostering a mindset geared towards investment and financial growth is valuable. Encouraging teens to save, learn about investing, and explore alternative investment options can set them on a path toward financial independence.

Conclusion: Out of Touch or Forward-Thinking?

The debate surrounding Grant Cardone’s advice raises important questions about the accessibility of investment opportunities for young people today. While his personal experiences and success story may inspire some, they do not necessarily reflect the challenges faced by the average teenager.

Ultimately, the conversation should focus on finding realistic and attainable ways for young people to engage with the world of investing. Whether through REITs, crowdfunding, or other financial education initiatives, the goal should be to equip the next generation with the knowledge and tools they need to succeed financially.

What do you think? Is Grant Cardone out of touch for suggesting that kids save and invest $300 into real estate every month? Or is there merit behind encouraging young people to invest early? The answer may lie in finding a balance between aspiration and practicality.