Grant Cardone Says No One in the US Is Debt-Free — Not Even Dave Ramsey
Written by
Marc Guberti
Edited by
Molly Sullivan
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Grant Cardone has used debt to acquire many real estate properties and build his wealth. However, he also noted that he has used cash to fund most of his investments in recent years due to unfavorable interest rates. Cardone shared this information in an interview with Ryan Pineda, and the host eventually brought up Dave Ramsey’s approach to debt.
Ramsey is well known for viewing any debt as bad debt. However, Cardone countered by saying that everyone is in debt, including Dave Ramsey. He also mentioned that you cannot grow unless you have debt. The real estate mogul dove into these statements and shared when it makes sense to use debt for your investments.
No One Is Debt-Free in the US
When most people think about debt, they think about their credit card debt, mortgage and personal loans. However, debt extends beyond your personal obligations. The United States has more than $36 trillion in debt, and that puts every American in debt. The American economy runs on debt, and Cardone also views money printing as another form of debt.
When the government prints more money, consumers pay for it in the form of reduced purchasing power. While it’s not a debt that’s as blatant as a credit card bill, silent financial obligations still impact your ability to buy products and services.
Cardone also mentioned property taxes as another type of debt that you have to keep paying each year. While most people don’t refer to property taxes as debt, it’s still a financial obligation that you have to keep up with each year.
Being in debt isn’t a bad thing if you are in good debt. The most successful corporations have debt on their balance sheets. Even the companies with enough cash to pay off debt still use debt to grow and tap into more market share.
Debt Allows Companies To Work With More People
Although Ramsey mentions that he doesn’t use debt, Cardone mentions that it is very likely that the company that gave Ramsey his big media contract used debt. The company that brought his show to life had to pay debt for studios, satellites and other expenses. Some of the businesses that people work with use debt, and sponsors may also use debt to get exposure on various TV shows.
The world revolves around debt, and people who know how to use good debt can get further ahead than people who do not utilize this resource.
When To Use Cash
Although Cardone enjoys using debt when it makes sense, he said that his recent deals have been cash transactions. Cardone doesn’t like current debt, and that’s probably because of the Federal Reserve’s many rate hikes in 2022 and 2023.
However, Cardone may soon have a change of heart as interest rates continue to drop. Soft inflation readings can prompt the Federal Reserve to reduce interest rates and make debt more attractive to investors.
Some investors are waiting patiently for when they can borrow capital at more competitive rates. Although Cardone has used cash for recent real estate deals, he can tap into credit lines and equity loans on his existing properties when rates become more competitive. For now, he’s comfortable with using cash, but even then, he is still in debt, just like he says every American is.
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