Grant Cardone: 5 Reasons the Middle Class Is Broke
Written by
David Nadelle
Edited by
Rebekah Evans
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We know that the majority of millionaires are self-made, so when a wealthy tycoon like Grant Cardone talks about the financial burden and challenges facing the U.S. middle class, chances are they have some real life experience to speak on the subject.
“Look, I grew up middle class and we only had just enough money to get by,” wrote Cardone on his site. “We were never hungry or wanted for much, but I experienced my mom always fearful about money. I remember watching mom clip coupons, looking for the best deals and always worried the money wouldn’t go far enough.”
Grant Cardone now oversees a portfolio of over $5 billion in multifamily real estate properties and is the author of the “10X Rule,” so he knows a thing or two about making money, even in rough economic conditions.
He also knows the difference between why the middle class continues to struggle and why the wealthy continues to strive. For Cardone, it’s a matter of having a different mindset and playing with a different set of rules. “The creation of the middle class was based on factories and jobs,” Cardone told GOBankingRates. “We don’t have that today.”
To explain why the middle class is broke, below is a few of Cardone’s outdated financial beliefs that he believes the middle class need to let go of.
Money Can’t Buy Happiness
Perhaps, but as Forbes contributor Andrew Rosen said, money might not buy you happiness, but it’s a fine catalyst. “There are plenty of scenarios where an increase in income would make someone’s life easier and generally improve their mood and life, resulting in increased happiness,” he wrote.
Cardone is more blunt on the notion that money won’t make you happy. “Everyone knows this — it is a stupid and irrelevant comment on money. When you hear someone say this know immediately this person has given up on money.”
Prioritizing Saving Over Investing
Both saving and investing are essential for gaining financial success, but after you’ve saved enough to pay your expenses, your focus should be on making your money grow. Most advisors would recommend you settle any high-interest debt and sock away some cash for an emergency fund before you dive into investing, however, it depends on your income situation.
Cardone deals mainly with real estate, but he shared his core message on X. “That full-time job won’t bring you wealth,” he wrote. “Saving, saving, saving won’t bring you wealth. Overspending won’t bring you wealth. Being scared won’t bring you wealth. The ONLY thing that will bring you true wealth is investing.”
Play It Safe by Diversifying
According to Cardone, the middle class have taken the adage “Don’t put your eggs in one basket” to heart, using the practice of diversification to manage risk in pursuit of profit or return. “The middle class prematurely diversified into mutual funds & etf’s [sic] (per instruction by Wall Street & financial planners) while the wealthy made big bets on a few things to build wealth,” he said on Facebook.
Referencing Warren Buffet’s penchant to hold large quantities of a small group of quality investments as the ideal example, Cardone believes that emphasizing diversification limits your returns. If your goal is to grow your riches, it makes little sense to settle with hedging one’s bets when you can be fueling your wealth.
Money Doesn’t Grow on Trees
After working in capital and global markets for 15 years for financial heavyweights like Goldman Sachs and Instinet LLC, Alison Crosthwait did a complete 180 and sought out transformation through psychotherapy training. But she has managed to merge her trader training with healing therapy.
Cardone takes a direct approach to the concept of “money doesn’t grow on trees.” “Money is printed by man and is plentiful. Anytime there is a shortage we print more,” Cardone said.
In a blog post, Crosthwait shared that while treating money as a valuable and scarce resource is good in theory, she feels the reality is that the money is out there and available.
Looking for a Good Deal
Cardone feels the middle class has a scarcity mindset, which could result in poor financial decisions and behaviors. “America’s middle class was indoctrinated to play by a set of rules that made others rich,” he said.
This plays out in real life when price is favored over value. “Good deals don’t make people rich, making big deals makes you rich,” said Cardone. “The best deals I have ever made were those I paid a premium for.”
Taking financial risks doesn’t have to be a life-or-death decision, but if you want to thrive and become wealthy, you must seek out possibilities for growth. If you’re holding on to comfortable strategies too tightly, taking appropriate risks might change your mindset and motivate you moving forward.
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