If you want to know how those with wealth manage their money, listen up. Businessman Grant Cardone is one of them, and he isn’t keeping this secret to himself.
In a recent interview with Jack Neel, Cardone revealed what the super-rich do with their money — and the answer might surprise you.
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Read on for what Cardone says the super-rich do with their money and how he puts it into practice.
Also see Cardone’s 10 steps to becoming a self-made millionaire.
Passive Income
In the interview, Cardone highlighted the importance of passive income to the wealthiest members of the population. He said these people have found a way to earn money that requires little to no effort, and they’re cashing in on it.
Personally, Cardone said he earns passive income on a monthly basis. In fact, he said people should live off only their passive income. He said the ultra-wealthy never touch their personal capital.
“This is what the super-rich do,” he said. “They only use their passive income.”
So how does this look for Cardone in particular?
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Real Estate Income
To say Cardone knows a lot about real estate is an understatement. He’s the owner of private equity real estate firm Cardone Capital, which has a multifamily portfolio of assets worth more than $4.7 billion, according to his website. This is where much of his passive income originates.
While you might think this means he solidly believes in homeownership, this isn’t the case. In his interview with Neel, he explained that the exact opposite is true. “Buying a house is the worst investment. It’s dead money, man, like you’re not going to make money there, and you’re going to pay for it,” he said.
Instead of buying a single-family home to live in, he advised renting and purchasing four units in the same neighborhood that provide cash flow. “Use the cash flow from the rentals to pay for where you live,” he said.
Of course, real estate isn’t the only way the ultra-wealthy earn passive income. Some may earn it from interest on bank accounts, dividends and bonds — just to name a few. In fact, the average millionaire has seven different revenue streams, as reported by Benzinga.
However they’re earning passive income, the wealthy have one thing in common, according to Cardone. They’re holding on tight to their personal capital and spending only their passive income.
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This article originally appeared on GOBankingRates.com: This Is What the Super-Rich Do With Their Money, According to Grant Cardone
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