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Emergency savings have long been considered a financial safety cushion by most financial experts. What they may disagree on is how many months’ expenses you should plan to set aside — for Dave Ramsey, you should be prepared to cover three to six months, while Suze Orman now says you should plan for up to a year.
However, real estate mogul Grant Cardone rejects the concept of emergency funds entirely.
“I don’t need emergency savings,” he said in a recent interview with YouTube personality DJ Vlad. “This was another bank myth — you need three months of savings in case of a big emergency. Dude, if you have an emergency, you need to go to work. You need to go hustle is what you need to do.” Cardone also foresees gloomy outcomes for those who practice saving money, stating, “savers stay broke.”
Cardone’s aversion to maintaining an emergency fund may be rooted in his perspective on fiat currency.
“This is the big scam right here,” he told DJ Vlad, holding up a $100 bill.
He explained that if the bill had been printed in 1973, the year DJ Vlad was born, it would still have “$100” printed on it today. However, due to the impact of inflation on the U.S. dollar’s purchasing power, the bill wouldn’t buy nearly as much today as it did in 1973.
Cardone emphasized that over the decades, inflation has indeed eroded the purchasing power of money for Americans. According to the inflation calculator from the Federal Reserve Bank of Minneapolis, $100 in 2023 was equivalent to just $14.57 in 1973 dollars.
At the same time, however, precious metals like gold have been shown to retain their value over a similar period of time, rising in value while the dollar wanes.
Many investors opt for a self-directed gold IRA, a type of retirement account that combines the tax advantages of a traditional IRA with the inflation-hedging properties of gold.
A gold IRA is one option for building up your retirement fund with an inflation-hedging asset.
Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.
With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver.
If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today.
Real estate — a favorite of Cardone’s — is another way that smart investors hedge against inflation. As the price of raw materials and labor increases, new properties are more expensive to build, driving up the price of existing real estate. Commercial real estate has beaten the stock market for 25 years — but in the past, only the super-rich could buy in. This has now changed.
Companies such as First National Realty Partners allow individual accredited investors to access institutional-quality commercial real estate investment properties leased by national brands like Whole Foods, CVS, Kroger and Walmart.
With FNRP, everyday investors can become the landlord of these famous high street names, accessing the potential for greater returns, diversification, and transparency.
Read more: Rich, young Americans are ditching stocks — here are the alternative assets they’re banking on instead
Although Cardone sees sound investment wisdom in real estate, he strongly believes that home equity shouldn’t be included in the calculation of your net worth at all. This is because home equity is often a substantial component of American households’ net worth.
A study by the Pew Research Center found that the median net worth of U.S. households was $166,900 in 2021 when all assets were included. However, when home equity was excluded, the median net worth dropped significantly to just $57,900.
“Equity in a home should never be considered as a net worth number … It’s a place you live. It would be like counting my refrigerator on my net worth statement,” Cardone said.
On the other hand, rental properties can generate enough revenue to cover these costs and still leave you with a profit. This potential for positive cash flow makes high-quality income properties a more attractive investment compared to a primary residence, which typically does not produce income.
Residential and rental real estate has proven to be one of the best long term investments in modern history, providing returns in line with stocks, but with half the volatility. Renters spend around $485 billion in rent every year and renters headed about 36% of the nation’s 122.8 million households, according to Pew Research.
The problem is that the majority of people who want to invest in residential properties and vacation homes aren’t able to do so because of the high entry cost.
mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a $250,000 down payment or 3 A.M. tenant calls.
Founded by former Goldman Sachs real estate investors, the team hand-picks the top 1% of single-family rental homes nationwide, guided by proprietary underwriting and market analytics typically used by large institutions.
Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10-12% annually. Every investment is secured by real assets, not dependent on the platform’s viability. Each property is held in a standalone Propco LLC, so investors own the property — not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.
Getting started is a quick and easy process. All you need to do is sign up for an account and then browse available properties. Once you verify your information with their team, you can invest in the properties of your choice in as little as 30 seconds.
Unlike Cardone, Robert Kiyosaki sees the need for an emergency fund, which should contain anything from three to 12 months of your expenses.
The personal finance influencer and face of the Rich Dad, Poor Dad brand however recommends that all “excess” money should be invested, instead of leaving it in short-term savings.
Investing in a high-yield savings account could help mitigate this challenge by potentially delivering returns of over 4%, compared to the standard savings APY of 0.01% offered by most U.S banks.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
