Grant Cardone’s 4 Ultimate Tips To Maximize Your Retirement Savings
While common retirement advice is to max out your retirement accounts, be those 401(k)s or IRAs or a combination of both, Cardone’s advice runs against the current. He suggests that relying on retirement accounts is actually not your best bet. Instead, you should do these four things.
Invest In Income-Producing Real Estate
Cardone is not a huge fan of relying solely on retirement accounts in your golden years (among other forms of savings). “Saving money is a trap. 401(k)s are a trap,” Cardone recently said in an Axios interview.
If this sounds contrary to what you’ve learned about retirement, Cardone isn’t surprised. On his website, he prides himself on teaching people to “rise above outdated, unworkable middle-class myths and limitations.”
Cardone prefers to invest in income-producing real estate, stating that he doesn’t want a “lump sum” at retirement, but “cash flow.”
He told GOBankingRates previously, “If I had a net worth of a million dollars, I want it to pay me $5,000 a month. That’s what I’m looking for. I’m looking for $60,000 a year in income that I can live off of and not [have to] tap into my million dollars in capital.”
He recommended investing in properties that can pay 6% per year, which is competitive with the market. And he recommends being able to situate yourself where you don’t personally have to manage the property.
The benefits of real estate also include tax write-offs and the ability to leave a legacy to any heirs.
Cardone has said that 95% of his wealth is invested in real estate, so he’s literally taking his own advice.
Don’t Rely on the Market
Cardone does not believe in trusting your money to the market, either.
He previously told GOBankingRates that he started looking for assets where he wouldn’t lose money when he was as young as 30 (he’s 65 now). “That means I can’t just save money because money is going down in value. I can’t be in the stock market because I could lose money.”
Set Your Retirement Savings Goal Higher
Though Cardone has made clear that he prefers his retirement income to come from real estate over other traditional investments, if you are going to use 401(k)s or IRAs, he explained in a guest post for CNBC that you’ll need to raise the bar on the amount you plan to save.
For years now, experts have recommended having at least $1 million in retirement savings, given that you may be living off that income for several decades. However, Cardone suggests that number needs to be startlingly higher — more like $10 million—if you want to live the same quality of life you may be used to. A number you aren’t likely to get just by saving money. Investing will be necessary.
Aim for Saving 40% of Your Income
Ideally, you would be able to get to an income level where you could save 40% of your gross income before taxes, Cardone suggested, and invest whatever cash is left in assets that produce income (hint: real estate). He recommended that you avoid investing anywhere that you run the risk of losing your capital.
While the average American might find these goals lofty beyond reach, striving for them can only benefit you in the long term.