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Earn passive income

Cardone’s first habit is to “never use earned income to improve quality of living, only passive income.”

To live by that rule, you first need to invest some of your earned income into assets that will — as the phrase goes — make you money as you sleep.

There are many ways to put your money to work for you. Traditionally, people have earned passive income by investing in stocks, bonds, mutual funds and exchange-traded funds — some of which will pay dividends that you can use (as Cardone put it) to “improve [your] quality of living” or you can set to automatically reinvest and watch your assets grow.

Cardone’s favorite investment vehicle for earning passive income is real estate, specifically multifamily properties that generate steady rental income. Through his investing career, Cardone has championed the crowdfunding process, which allows everyday investors to pool their money to purchase property (or a share of property) as a group.

Through a crowdfunding platform, you can buy a percentage of physical real estate, including rental properties to commercial properties. Such platforms typically make real estate investing more accessible to the general public by simplifying the process and lowering the barrier to entry.

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Cash is king

The second financial habit Cardone highlighted was to “never use credit card or debit cards for personal use purchases.”

This stance is unsurprising from a man known for saying “cash is king.” But remember, just because this wealth-building strategy works for Cardone, that doesn’t mean it’s right for everyone. It’s called “personal” finance for a reason.

As one X user commented in response to Cardone’s post: “Credit cards provide rewards, security against fraud, and are a +30 day loan if you pay them off every month. If used responsibly, credit cards are a great tool.”

The notion of being responsible and disciplined when using credit cards is important. Credit card debt — once you fall behind on your monthly payments and start amassing interest fees — can quickly spiral out of control, forcing you into delinquency or default.

It boils down to the age-old advice of not spending money you don’t have, which is perhaps easier when paying with cash than it is with a credit card that accrues debt and must be repaid later.

Be tax savvy

Cardone’s final wealth-building discipline is: “If the purchase isn’t tax deductible, don’t buy it.”

As a businessman, Cardone is likely able to claim a lot of business-related expenses on his tax return as a deduction. He may also be able to enjoy some of these purchases for personal use. You may look at this final piece of advice as being irrelevant for the average American. As one X user responded: “Groceries aren’t tax deductible. I guess I shouldn’t eat.”

While the weekly grocery shop is not tax deductible, there are other ways to save money from the taxman. The IRS lists deductible expenses that individuals can claim, regardless of whether they take the standard or itemized deduction when filing their taxes.

These expenses include: alimony payments, business use of your car or home, money put into an individual retirement account or a health savings account, penalties on early withdrawals from savings, student loan interest and more.

If you itemize, you can further deduct expenses, including: bad debts, capital losses, donations to charity, gains from the sale of your home, medical and dental expenses over 7.5% of your adjusted gross income, certain property taxes and more.


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Bethan Moorcraft is a reporter for Moneywise with experience in news editing and business reporting across international markets.


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