‘You don’t need savings’: Grant Cardone blasts Dave Ramsey’s ‘save your money’ advice — says ‘real estate is a much safer investment.’ A head-to-head look at their polar money tips

Cardone loves cash flow

Cardone believes the U.S. is in the grips of a financial crisis — evidenced by the three major bank failures in the spring.

He claims that other regional banks are “in trouble as well” and that if any of the big five super banks were to fail — JP Morgan, Bank of America, Citigroup, Wells Fargo and U.S. Bancorp — “they would drag the entire planet down with them.”

Facing such doom and gloom, Cardone believes he’s financially secure as long as he has cash flow from income-producing properties — and that income exceeds his property expenses and debt.

“Cash flow is the king, the queen and the entire court,” according to Cardone. “It is the holy grail because cash flow allows you to weather storms and problems.

“During COVID I had cash flow. During 2008-09 … when property values plummeted 30% and 40%, I still had cash flow.”

Cardone argues “real estate is a much safer investment than having money at a bank” — an opinion no doubt inflamed by the downfalls of Silicon Valley Bank and Signature Bank in March.

Read more: Owning real estate for passive income is one of the biggest myths in investing — but here's how you can actually make it work

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How they compare on real estate investing

While Ramsey encourages investing your income for retirement, compared to Cardone, he’s far less bullish on real estate.

Unlike the big, bold claims often made by Cardone, Ramsey’s approach to building wealth focuses more on digging yourself out of debt and avoiding adding to it again through his seven small “baby steps”” program.

But Ramsey’s not just naturally more conservative with his investing approach — his teachings are based on hard lessons from his own life. In his 20s, he built a multimillion-dollar fortune flipping houses but lost it all when banks started calling in his debts — to the extent that he declared bankruptcy in 1988. And unfortunately, his experience isn’t all that unusual among investors looking to make a quick buck from house-flipping.

“I love real estate,” Ramsey said. “It does give you a better rate of return that other investments don’t have, but when I hear someone say passive income and real estate in the same sentence, it means they’ve been on get-rich-quick websites.”

Cardone does touch on some of these issues in his discussion with Moneywise, explaining that he offsets his risk by ensuring he has time and won’t ever over-leverage himself on investments.

“The only people that lose their real estate are over-leveraged … They have a partner — it could be a bank or equity — that's got a gun to their head saying: 'You have to sell right now.' You never want to be in a position like that in real estate because real estate is not a liquid asset.”

However, it’s important to take these financial experts’ advice with a grain of salt — especially when they’re promoting specific products. Both Cardone and Ramsey have been the subject of litigation in recent years over allegations of misleading investors and followers while promoting products that ultimately fell short of the promised returns.

Cardone has denied the allegations, saying on LinkedIn it is a “tragedy our system is so litigious and people are encouraged to sue others in order to hold a company doing great things hostage.” And for his part, Ramsey Solutions has not responded to requests for comment from several media outlets.

At the end of the day — as with all personal finance advice — what works best for most average Americans will likely fall somewhere on the spectrum between Cardone and Ramsey’s approaches.

And these days, it’s actually possible to have it both ways. If you’re on top of your finances, in control of your debt and have some spare cash to invest in real estate — but you don’t want to risk it all on buying an entire property — you can buy shares in income-producing properties via investment trusts or crowdfunding platforms.

Finding a way to keep saving for your future while bringing in cash through your investments might sound more boring than what Cardone suggests — and more bold than Ramsey’s approach — but many will find it’s the ideal balance for their books.