Grant Cardone: 3 Ways To Become Rich on an Average Salary
Written by
Gabrielle Olya
Edited by
Ashleigh Ray
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If you’re not earning an above-average salary, you might believe that you’ll never be able to build above-average wealth. Fortunately, this isn’t true. When you use your earnings wisely, you can become rich on an average salary.
GOBankingRates spoke with Grant Cardone, private equity fund manager and real estate investor, about how to do it.
Grant Cardone’s Formula for Building Wealth
Cardone, who’s hosting the 10X Growth Conference 2025 on March 19-21 in Las Vegas, shared a three-step formula for building wealth that applies to income earners of all levels.
“Number one, invest in assets, not lifestyle,” he said. “Don’t try to improve the quality of your life — your cars, where you live, your shoes, your belts, your purses or your vacations. Invest money in assets that cash flow. [Number two], only use the cash flow from those investments to improve the quality of your life. And [number three], continue that until your passive income is equal to your earned income.”
Essentially, you should invest in assets that produce passive income and live off your passive income rather than your earned income. If you keep using your earned income to invest in income-producing assets, your wealth will continue to grow. Cardone believes that this is a much more fruitful strategy than focusing on increasing your earned income.
“The problem is people want to make more money [so they] get a second job. A second job is not the right thing to do,” he said. “The smart thing to do is not add time — it would be to invest the money that you already have. If you’re a journalist during the daytime and at night, you’re going to go sell soap on the internet or build websites, you’re just working 12-hour, 15-hour days — it doesn’t mean you’re going make more money. Now you have two active flows, but you don’t have any passive flows.”
The Best Assets for Building Wealth
In order for Cardone’s formula to work, you need to find the right assets to invest in that will provide you with passive income.
“Real estate is perfect for it,” Cardone said. “Real estate is perfect because real estate distributes cash flow every month, as opposed to AT&T stock [that] only generates cash flow every quarter.”
Investing in income-producing real estate is possible for average salary earners — but it will require discipline.
“Let’s say I’m working for a company, I make $60,000 a year and I get a bonus at Christmastime of $5,000. Do not use the $5,000 to improve the quality of your life or buy presents,” Cardone said. “Invest your Christmas money in an asset, a $100,000, four-unit [rental property] that will pay you $2,000 a month next year.”
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