In a declaration that has gained a divided reaction, businessman and financial influencer Grant Cardone said that anyone with $1 million right now is 'as close to broke as you can get'. Considering that a million dollars is widely viewed as a lot of money, many people are likely to disagree. However, the narrative changes when factors such as high inflation and an escalating cost of living are considered, making the Cardone Capital CEO's claim more understandable.
Cardone was asked to explain further what he meant when, despite having a million dollars, a person could still be considered close to broke. He was asked to elaborate on this during an appearance onThe Iced Coffee Hourpodcast hosted by Graham Stephan and Jack Selby. The financial influencer expounded on his point, detailing why having a regular source of income is essential and why it should not lead anyone into a false sense of security.
To back that statement further, Cardone explained why having a million dollars should not be treated as financial freedom. He explained why continuous income was important for anyoneto survivethe daily grind in today's world.
'If you don't have new income and you're going to live [until] you're 87, and you have no new income, you guys break up, there's no sponsors. There's no income, nothing (...) You cannot earn income. You have no government cheque. So you have 60 years and a million dollars. I don't know what the maths is on that,' Cardone said.
Some people who find themselves with that amount of money consider placing some of it in investments. While that appears to be a wise decision, the next question is whether the returns from investing will be sufficient to cover an individual's cost of living over time. Cardone provided estimates and delivered a harsh reality check for such a scenario.
'Can you live on $30,000 a year? That's $2,500 a month,'Cardoneargued. 'You can't. What happens to your roles and responsibilities?' he added.
Without a doubt, a million dollars is big money. But the reality is that it is only good for a limited number of years. Hence, the manner of thinking is that while having that large sum of money in hand is helpful, whatever is taken out of it needs to be replenished to ensure a person remains financially secure until retirement or later in life.
For people who only need to think of themselves, that problem can be more easily managed. However, the situation is different for those who have a family. Being the breadwinner, planning for a financially stable and worry-free life becomes more complex, which is why the proper spending of the money one has right now is important.
Cardone also expounded on that point, highlighting how any person needs to factor in a spouse, children, or even ageing parents. These are responsibilities that a husband, father, and son or daughter need to be aware of.
'It's not a money problem. It's a roles and responsibility problem. I'm not responsible just for myself. If I'm capable, able, intelligent, I can work, I'm healthy — those are my abilities. And I don't extend my roles and responsibility not just to my wife, my kids, my employees, my community, my neighbourhood,' Cardone pointed out.
Source: International Business Times UK
