Grant Cardone Says a House Is a ‘Terrible Investment': Do Fellow Experts Agree?
Real estate mogul Grant Cardone made waves recently when he called homeownership a 'terrible investment,' suggesting Americans would be better off renting and putting their money elsewhere.
Read More:
Find Out:
But is the self-made millionaire right about the American dream being more of a financial nightmare? Let's see what other financial experts have to say.
Cardone has been vocal about his belief that buying a home isn't the wealth-building strategy many Americans think it is. He points to factors like mortgage payments often being double the cost of rent in many markets, along with additional expenses like property taxes, insurance, and maintenance that eat away at potential returns.
Instead, Cardone suggests investing in income-producing assets that generate cash flow rather than tying up capital in a primary residence.
Discover Next:
Thomas J. Brock, CFA and expert with Annuity with over 20 years of experience in investments and corporate finance, partially agrees with Cardone's assessment.
'If viewed solely as a financial endeavor, I agree with Grant Cardone on the notion that a house is a relatively subpar investment,' said Brock. 'Generally, owning a home is not going to produce a return that competes with that of a diversified investment portfolio of stocks and income-generating assets.'
However, Brock points out the important distinction that most people don't buy homes just for financial gain. 'Owning a home can provide one with levels of security, stability, and privacy that are not achievable via most rental arrangements,' he remarked.
Fabio Ruggeri, CEO and founder at MenthorQ, offers a more analytical perspective, comparing real estate returns to other investment vehicles.
'In many parts of the [U.S.], the average annual appreciation has been between 4 to 6% annually,' said Ruggeri. 'Now, simply investing in an SPX ETF would have [beaten] this by 2 to 4% over 30 years. Annual returns for SPX pre-earnings is around 8 to 10%, and after dividends we are looking at 10%.'
Ruggeri goes further, suggesting that more sophisticated investment strategies like options trading could potentially yield even higher returns for knowledgeable investors.
Arron Bennett, CEO of Bennett Financials, takes a different view, highlighting the long-term benefits of homeownership that Cardone may be overlooking.
'What he's not considering is that, in the long term, lower to middle-class individuals may not have the discretionary spending money they need when they retire,' Bennett explained.
Bennett points to the value of eventually owning an asset outright: 'Think about someone who is 25 years old right now and buying their first house. Over the next 25 to 30 years, they'll be paying it off, and once that's done, they'll have an asset they no longer need to make payments on — an asset they can also pass down to their heirs.'
He suggests Cardone is primarily focused on short-term cash flow rather than long-term financial security. He pointed out that real estate may not appreciate at the same level as the S&P 500, but it does provide free cash flow in retirement, which is important for many.
Bennett also notes that Cardone's viewpoint might be influenced by his business interests. 'When he makes these statements, we have to recognize that he's positioning things in a way that benefits his fund, allowing him to attract more investors and raise more capital,' he said.
So, do experts agree with Cardone's assessment? The answer is nuanced. While most acknowledge that purely from an investment returns perspective, homeownership often underperforms compared to other investment vehicles, they also point out that Cardone's analysis misses important factors:
Homeownership provides intangible benefits beyond financial returns
A paid-off home offers significant financial security in retirement
Real estate can be a vital wealth-building tool for the average American
Housing is both an investment and a consumption good
Perhaps Brock sums it up best: 'Buying a home still makes a lot of sense for some people, especially given the prospect of modest and consistent price appreciation.'
The decision to buy or rent ultimately depends on personal circumstances, financial goals, risk tolerance, and local market conditions. While Cardone's perspective offers food for thought, most experts suggest a more balanced view that considers both the financial and non-financial aspects of homeownership.
More From GOBankingRates6 Big Shakeups Coming to Social Security in 2025
This article originally appeared on GOBankingRates.com: Grant Cardone Says a House Is a 'Terrible Investment': Do Fellow Experts Agree?
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hill
an hour ago
- The Hill
Creating tax reform that is both pro-work and pro-family
There is growing recognition among both Republicans and Democrats that American families deserve more support. Yet, for too many low-income Americans striving to build a better life for their families, key provisions of the federal tax code penalize hard work and marriage, creating barriers where there should be reward. The ongoing discussions about tax reform present an opportunity to introduce reforms that are both pro-work and pro-family. The Earned Income Tax Credit is one of the largest sources of support for low-income families, but it could be streamlined and paired with changes to the Child Tax Credit so that the two credits are better structured to accomplish the dual goals of rewarding work and providing income support to families with children. The Earned Income Tax Credit currently provides a maximum of $7,830 a year for qualifying families with three children. Families receive no money from the program if they have no earnings. The credit then increases at low levels of earnings to encourage work. It also increases as the number of children in the family goes from one to two to three. An unintended, undesirable feature of this design is that the 'pro-work' incentives of the Earned Income Tax Credit are stronger for families with more kids — exactly opposite to common sense ideas of family wellbeing. Families with more kids likely benefit from more parental time at home. In addition, because the earnings eligibility limits do not double for married couples, the Earned Income Tax Credit discourages marriage among working low-income parents and makes it harder for married couples to get ahead by adding a second earner. Such 'marriage penalties' are found throughout the tax code. Since the progressive U.S. tax code is applied to combined household income, couples who marry can be subject to a higher overall tax rate and potentially reduced government benefits. The Department of the Treasury estimates that in 2023, 37 percent of married couples filing jointly faced a marriage penalty. Although couples can legally file separately, they rarely do, as it also almost always leads to a higher tax burden and it precludes the claiming of many tax credits, including the Earned Income Tax Credit. According to research from the Federal Reserve Bank of Atlanta and Boston University, over 7 percent more low-income women with children would marry by age 35 without this marriage penalty. But it doesn't have to be this way. As Congress is poised to implement major changes to the U.S. tax system, we urge lawmakers to adopt a more coherent, pro-family approach to tax policy. The current tax debate presents a golden opportunity to address and modernize some of the system's most outdated features. We propose modifications to the two main federal tax credits affecting low-income families. Specifically, we propose a unified Earned Income Tax Credit that applies to any family with children. We scale the credit size and income eligibility for married couples so that fewer families see their benefits reduced when they marry or a spouse starts to work. To ensure that low-income families with children are not left worse off under these changes, we pair these Earned Income Tax Credit reforms with an expansion of the Child Tax Credit. The enhanced Child Tax Credit would provide greater support to families raising young children and help offset the rising costs of caregiving and childrearing. To ensure even the lowest-income children have access to support, families with no earnings are eligible for half of the proposed Child Tax Credit. Our proposal increases Child Tax Credit benefits quickly as parental earnings increase, providing an incentive for parents to enter the workforce. Our proposed changes prioritize low- and middle-income American families, with 58 percent of the increases in transfer payments going to families in the bottom two-thirds of the income distribution. These changes would update the U.S. tax code to be both pro-family and pro-work, supporting working parents, reducing marriage penalties, and providing impactful support to children in low-income households. At a time when there is growing bipartisan interest in better supporting children and working parents, these changes offer a clear path forward. With modest adjustments, we can create a tax system that promotes family stability, encourages workforce participation and helps more families build secure, thriving futures. Melissa S. Kearney director of The Aspen Economic Strategy Group and Luke Pardue is policy director of The Aspen Economic Strategy Group.
Miami Herald
2 hours ago
- Miami Herald
Trump approves Nippon Steel purchase of U.S. Steel
June 14 (UPI) -- President Donald Trump issued an executive order on Friday officially giving the green light to Nippon Steel Corporation's multi-billion-dollar purchase of U.S. Steel Corporation. Trump's executive order rescinds a directive issued by former President Joe Biden that blocked the Tokyo-based steel producer's $14.9 billion purchase on national security grounds. The president had been signaling he would approve such a move, stating in May that the two steel giants would form a "planned partnership." Trump previously ordered a review of the transaction by the Committee on Foreign Investment in the United States. "Based on the recommendation of and my review of the materials provided by CFIUS, including re-review of the prior assessment of risk, I additionally find that the threatened impairment to the national security of the United States arising as a result of the Proposed Transaction can be adequately mitigated if the conditions set forth in section 3 of this order are met," Trump wrote in the executive order. "President Trump has approved the Companies' historic partnership that will unleash unprecedented investments in steelmaking in the United States, protecting and creating more than 100,000 jobs," Pennsylvania-based U.S. Steel said in a release jointly issued with Nippon Steel. "We thank President Trump and his Administration for their bold leadership and strong support for our historic partnership. This partnership will bring a massive investment that will support our communities and families for generations to come. We look forward to putting our commitments into action to make American steelmaking and manufacturing great again." Trump's executive order requires both companies to enter into a National Security Agreement, which stipulates $11 billion in new investments must be made in the United States by 2028. That includes an already-underway project not scheduled for completion until after 2028. The United States government will also be issued a golden share as part of the NSA, giving it unique voting rights. "President Trump promised to protect American Steel and American Jobs -- and he has delivered on that promise," White House spokesperson Kush Desai told CNN in a statement. "Today's executive order ensures US Steel will remain in the great Commonwealth of Pennsylvania, and be safeguarded as a critical element of America's national and economic security." Confirmation of the deal comes just over a week after 50% tariffs took effect on metals imported into the United States from nearly all countries. The tariffs were enacted a day after Trump signed an executive order doubling the duties on almost all imported aluminum and steel. Copyright 2025 UPI News Corporation. All Rights Reserved.
Yahoo
2 hours ago
- Yahoo
How To Stop Living Paycheck to Paycheck When You Make Good Money
According to numerous reports, about half of all Americans say they live paycheck to paycheck. This isn't limited to low- or moderate-income households, either. Almost half of those earning six figures feel the same way. For You: Try This: If you're struggling to make ends meet and feel like you never have enough money to meet your financial goals — like saving for a down payment or paying off debt — you're not alone. But your situation isn't hopeless, either. GOBankingRates reached out to several financial experts about how to stop living paycheck to paycheck when you earn enough money not to. Here's what they said. Sean Fox, president of debt resolution at Achieve, suggested making a spending plan or a budget. 'Most people don't want to 'budget' because it sounds hard, tedious and complicated. It's not. It's just a way to understand your finances in simple terms, with an eye on goals you've set,' Fox said. 'That means taking time to consider what you really want in your life, both in the long run (e.g., retirement, vacations, buying a house) and short run (e.g., a new piece of furniture, clothing, time for your favorite hobby or pastime). Then you can build your spending plan around what it will take to reach those goals.' No matter how much money you earn, you should always keep track of your spending. It's all too easy to fall into the trap of lifestyle inflation, something that occurs when you start spending more because you start earning more. You could be earning $100,000 a year and still have very little to show for it at the end of the month…if you're not tracking your expenses. Knowing how much money you spend and on what can help you figure out where the problem areas are and fix them. 'Keep a record of every single expense (online and off) you and everyone in your household makes for a couple of weeks,' said Fox. 'Most people have some surprises, and are then in a better place to make some decisions on smart spending that's in line with the budget.' Find Out: The Federal Reserve found that 82% of American adults have a credit card, while over 40% regularly carry a balance. While not a guarantee, if you're living paycheck to paycheck while earning a decent income, chances are you have some credit card debt, too. If that's the case, Fox suggested paying off this debt first. 'With interest rates over 20%, this is a huge expense — both in terms of what you're paying to the credit card issuer and the fact that you're effectively paying much more than the purchase price of what you bought,' Fox said. 'Plus, if you are carrying debt and paying all that interest, you have no opportunity to do something positive with that money — like saving for retirement and other goals you've set.' If possible, increase your monthly payments to pay off your debt sooner. If that's not an option, see if you can get a balance transfer card or a low-interest debt consolidation loan instead. Depending on the new interest rate and term, you could end up paying less in interest and getting rid of your debt sooner. There are a lot of reasons why people who make plenty of money live paycheck to paycheck. One of the big ones is that they don't differentiate between wants and needs. 'Whether it's about 'keeping up with the Joneses' or just preferring to not do so, the lack of thinking about whether a given purchase will meet a 'want' or a 'need' fuels overspending and credit card debt,' said Fox. 'It is much easier to simply buy what you want than to develop the habit of stopping to consider each purchase, and whether you really need it in your life.' All of this leads to overspending and living beyond one's means. If you're living beyond your means, take the time to distinguish between your wants and needs. Once you've done that, see if you can take it one step further by living below your means. Living below your means 'provides some cushion, a way to save and insurance that you are not living paycheck to paycheck all the time,' said Fox. Similarly, find ways to limit your discretionary spending. 'Cutting back on nonessential purchases is a great way to stop living paycheck to paycheck,' said a Quicken spokesperson. 'It is important to consider how many nonessential purchases [you are] making each week that you could either go without or make more cheaply at home.' You don't have to do it all at once. You can use a budgeting app or expense tracker to see where your money is going. Or, once a month, you can look through your bank and credit card statements to find out what you spend money on — and start finding small ways to cut back. Having goals, whether they're short or long term, can help motivate you to get a hold of your finances. 'By prioritizing your financial goals and having a time frame in mind, you can maximize your savings, stay motivated and move closer to the finish line,' said the Quicken representative. But don't fall into the trap of trying to achieve those goals all at once. Having that time frame is key. With it, you can avoid taking too long for a certain goal while also keep yourself moving toward it. For example, say you want to save your first $1,000 in an emergency fund. If you don't have quite that much money at the end of the month, that's OK. Start with a smaller sum — like $100, $200 or whatever you're comfortable with. If you know you want to save that amount within three months, break down your monthly savings goals accordingly — $1,000 divided by three. Once you've achieved a few short-term goals, you can start thinking about those long-term goals — like retirement. Joe DiSanto, a financial expert, consultant and the founder of Play Louder, suggested making a 'financial independence roadmap.' 'This is a long-term plan to reach your retirement goal, which includes a savings plan and required levels of investment return,' he said. As you work on your spending and savings habits, it's important to be consistent. 'You need to be consistent and make it part of your life,' said DiSanto. 'You can't 'wing it' or 'go with your gut feelings.' It's like going to the gym or maintaining a healthy diet. I use those examples specifically because most people struggle with that, too.' You can go about this in many different ways. For example, you could get an 'accountabili-buddy,' someone who can help you stay on track financially. Or you can do things like automate your savings or use a budgeting app. Whatever works for you, do it and be as consistent as possible. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 7 Luxury SUVs That Will Become Affordable in 2025 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses This article originally appeared on How To Stop Living Paycheck to Paycheck When You Make Good Money
