‘If you're an idiot, go listen to Dave': Grant Cardone says to ignore Dave Ramsey if you want to get rich. Is he right to think most Americans are saving too much? Here's what the data says

“People use credit cards too much in this country ... They borrow money for Gucci belts and try to pretend to be somebody they’re not," he said in an interview with DJ Vlad. “If you’re an idiot, go listen to Dave.” Cardone clarified that he uses credit cards himself, but he makes sure to never owe any interest.

According to the entrepreneur, most Americans suffer from saving too much, being too conservative and not taking enough risk. “For those that want to get wealthy, at some point you’re going to leave Dave’s advice and you’re going to start watching what wealthy people do,” he said.

He believes using leverage is necessary if you want to move to the next level. "If you want to build a $4 billion real estate portfolio you're going to have to use debt," he added.

"Well the debt you're talking about is not the debt that he's talking about," said DJ Vlad, to which Cardone replied, "That's right. 100%."

So are "most Americans" saving too much?

The U.S. personal saving rate calculated by the Bureau of Economic Analysis was 3.8% in Jan. 2024. This is the percentage of people's incomes left after they pay taxes and spend money. Historically, the saving rate has averaged about 6.2%, said Gus Faucher, chief economist of PNC Financial Services Group, to USA Today.

A recent survey from Bankrate said that only 44% of U.S. adults would pay an emergency expense of $1,000 or more from their savings. Thirty-five percent would use a credit card, take out a personal loan or borrow from family and friends.

Does America have a credit card debt problem?

Cardone does not think that overspending with credit cards is a widespread problem.

Nevertheless, considering the increasing levels of credit card debt in the U.S., Ramsey’s guidance may still hold weight.

According to the latest data from the New York Fed, credit card balances surged $50 billion in Q4 2023 to $1.13 trillion — a new all-time high.

Carrying credit card debt can be costly. Forbes Advisor says the average credit card interest rate in America currently sits at 27.94%.

Cardone recognized Ramsey’s contribution to people’s financial health.

“I think Dave’s great for most people that just want to figure out how to get out of debt. He’s done a great job,” Cardone remarked. “But I’m not going to take Dave’s advice to build a real estate portfolio because if you want to build a $4 billion real estate portfolio, you’re going to have to use debt.”

Building a real estate empire

Cardone knows a thing or two about real estate. His private equity firm Cardone Capital boasts a multifamily portfolio of assets under management valued at over $4 billion.

In such ventures, debt can be a useful tool.