Where does all the money of the rich go? Grant Cardone reveals two major strategies.

Making a lot of money doesn’t necessarily mean becoming rich; it’s crucial to see how you spend it. Billionaire Grant Cardone recently held a lecture on this topic, with the core message being two words: passive income and real estate.

1. Only spend passive income, strictly protect the principal

Cardoni said that super-rich people have a common trait - they never touch their principal. Their strategy is very clear: they use the passive income earned for living and investing, while the original capital is kept sealed for appreciation.

You might ask him how he earns passive income? Real estate rental income. His real estate company Cardone Capital manages a portfolio of multifamily properties worth $5.3 billion.

2. Renting instead of buying a house, having four rental properties is the way to go.

This guy bluntly said: Buying a house for personal use is the worst investment. “You tie up your money in the house and still have to pay various taxes and fees, you can never earn it back.”

His strategy is: rent a house in the same community while buying four rental properties, with the rental income sufficient to cover the expenses of the self-occupied house. In this way, you have a stream of passive income, and the principal is also appreciating.

Data shows that the average millionaire has about 7 sources of income. The underlying logic is the same—let money make money, and only spend the interest.