Here it comes - “expert” disinfo that home ownership is a bad idea

Photo above - what is this Malibu beachfront mansion actually worth? And what did it sell for 2 years ago? The answer may surprise you . . .

America is obsessed with housing affordability. Me too - I'm a renter, and I don't get any return on my monthly rent checks. The government doesn't know how to solve this housing problem. Some people feel government IS the problem. Not Grant Cardone. He says that WE (people who want to buy homes) are the problem. He says “it's the worst investment you can make” (exact quote from his MSN link at bottom.)

Who is Grant Cardone? He's a motivational speaker, “sales coach”, and real estate investor. Did you catch that last part? He's a professional real estate investor. Telling us to stay away from real estate. Rent where we live, instead. Maybe even rent a place from him. As an investor, he has some available. And of course, Grant owns the places where HE personally lives. A $65 million Malibu mansion (Grant has listed it for sale; this is the current asking price). Mr. Cardone is possibly plotting an escape to Florida, like so many other California millionaires; he also owns a $28 million Miami mansion.

Let me repeat - Grant says that real estate is the worst investment we can make.

Okay, so he's an opportunist and a hypocrite. So what? Lots of people who are hawking advice on TV, or in their books, are hypocrites. And Grant has written at least 6 books on how to get rich. I'm not sure if any of them focus on getting rich by writing books, but that certainly seems to be a big part of his own strategy.

Where did Grant Cardone go to school? “Cardone University”. Stop laughing, this is really true. He founded some of online college, and awarded himself a Masters Degree in “sales”. I didn't know sales was an actual college major, but it must be. I wonder if Grant is going to give himself a PhD in sales, from his own university? It's what I would do, if I were him.

I won't do a deep dive on Grant's financial theories (in his link.) They are obviously demented. His theory is that if you bought a $576,000 house today, you'd need to sell if for $1.2 million in ten years just to break even. That's all in on the expenses – down payment, taxes, insurance, repairs . . . and WHAT??? Grant is also including the monthly mortgage payments in that 10-year cost of ownership? Does that mean those $400,000 in monthly mortgage checks over 10 years would have been money in the bank if you never bought the house? That you'd be living somewhere rent free - like your mom's basement? This is stupid-bad reasoning, Grant. Most people end up writing rent checks, rather than living for free.

In case you think I'm being too hard on Grant, let's go with his scenario. You need to sell that $576,000 house for $1.2 million in ten years. If you include REALLY REALLY old housing information, going back all the way to the 1960s, the average home inflation rate has been 4.5% annually since then. But that hasn't been the case recently. In 2023 the house inflation rate was 6.5%. In 2022 it was 7.2%. And so on. This ain't 1967, Grant.

What if you'd followed Grant's advice, and dumped all your home down payment money in the stock market ten years ago? You'd be up 129% (DJIA data. You'd have done even better in an S&P index fund – it's up around 150%). Suppose you HADNT bought that house, and had parked that 20% down payment ($115,000!!) in the stock market instead. Your 115k would now be worth . . . $280,000. But your home would have been worth $1.2 million – at least. And despite Grant's funny math, you would STILL have needed to pay $400,000 in rent over that period. Provided your rent never went up due to inflation. In that case your living costs could be even higher than the $400,000 he assumes.

Sorry Grant, I'm not buying what you're selling. Unless you're selling your own $65 million malibu mansion, and moving to a rental townhome. The mansion which you bought in 2022, for $40 million, and are now expecting a $25 million profit on, after less than 2 years.

Explain to me again why homes are a bad investment?

I'm just sayin' . . .

~'The worst investment people can make': Real estate guru Grant Cardone believes too many Americans are chasing the dream of homeownership. Here's what he says you should do instead (msn.com)~