Grant Cardone: Your Job, Savings Account and Credit Card Are 3 Money Traps That Are Keeping You Poor
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Gabrielle Olya
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Chris Cluff
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You could be sabotaging your ability to create wealth without even knowing it. That’s because many commonplace financial tools and behaviors we rely on are actually “money traps,” according to money expert Grant Cardone.
Here’s why the author of the upcoming book “The Wealth Creation Formula” believes that your job, your savings account and your credit card are all money traps that are stopping you from creating real wealth.
The ‘Job Hate’ Trap
Many people feel trapped in their jobs, but that’s because they are not utilizing their jobs to their full potential, Cardone said.
“People that make $300,000 a year are broke — they literally don’t have any money left over because of taxes, because of inflation, because of the cost of homes, mortgages, interest rates, college debt, car debt,” Cardone said. “The jobs are actually strangling people because the more you earn, the more you pay in taxes and the more and more of a consumer you become. That’s a trap.”
Instead of spending all of your money and hating your job, shift your focus to appreciating your job and making as much money as possible at it. As your earnings increase, look for ways to make your money earn more money, rather than spending it all.
The ‘Piggy Bank’ Trap
Stashing money in a savings account won’t lead to real wealth.
“Saving money is a trap,” Cardone said. “‘Cash is king’ is a trap.”
Instead of focusing on saving money, Cardone said you need to focus on using your cash to create more cash.
“Cash flow is what great companies and great investors and wealthy people have [in common],” he said. “Residual recurring cash flow over long periods of time [is the key to building wealth, not] just sitting on assets that appreciate.”
The ‘Plastic’ Trap
When used improperly, your credit cards can also prevent you from getting rich.
That’s because when you use a credit card, “we’re using [money] to consume — we’re not using it to invest,” Cardone said.
Credit cards also make it far too easy to overspend and get into debt.
“Credit card debt is like a drug,” Cardone said. “It is an awful product. It is one of the worst products that has ever been created. If you give somebody a piece of plastic open 24/7, you can make a withdrawal at 3 o’clock in the morning at the club or at the casino to do things that cannot be productive.”
Once you’re in credit card debt, it can be very difficult to get out of it.
“We have the highest credit card debt that we’ve ever had in history, and the interest rate today is 25% and 26%,” Cardone said. “While the Fed’s talking about inflation, what we should be talking about is the fact that if you have interest that accumulates, in four years, you would have as much interest as you had principal and never pay that debt.”
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