Grant Cardone Net Worth

I get asked weekly, “Whats your net worth? While I will leave that for later in the article what I want to focus on is the fact that most people are confused about what net worth means. I am starting to work on a finance series and from time to time will be dropping part of it here.

I know financial advisors, financial magazines, wealthy people and even accountants that don’t calculate net worth correctly.

Investomedia defines net worth as the amount by which assets exceed liabilities. They go on to give an example of a couple with the following assets?—?primary residence valued at $250,000, an investment portfolio with a market value of $100,000 and automobiles and other assets valued at $25,000. With debt from an outstanding mortgage balance of $100,000 and a car loan of $10,000. Then they suggest the couple’s net worth would be be $265,000 ([$250,000 + $100,000 + $25,000]?—?[$100,000 + $10,000]). This is not correct.

I am extremely conservative when dealing with finances. I would rather be surprised positively than be overly optimistic and be disappointed. I hate being disappointed when it comes to money.

The reason I think this is incorrect is I would never consider a home as part of the calculation of net worth. The couple has to live somewhere so how is that an asset? If they sold it they would need to buy another place. I also would never add cars, clothes, furniture, boats or art. Yes, they are assets and yes they have value (to someone) but when and how much?

I don’t consider a house an asset but rather an illusion of an asset where money gets tied up for years, sucks the owner dry due to annual property taxes and maintenance costs with no possibility of positive cash flow. And over the last 50 years when adjusted for inflation homes have barely gone up 1% per year.

I would not consider the top seven items on the spreadsheet attached; home, vehicle, jewelry, artwork, furniture, electronics, antiques or other in my calculation of net worth. Why don’t you include, toothpicks, toilet paper and tootsie rolls?

Jay Z claims a net worth of $650m and claims to have $493M in an art collection. Who determines the value of those pieces of art? And don’t tell me the appraiser?—?the marketplace at the time of sale will determine the value. When he is ready to sell his art the market will determine the value of the art.

Net worth is used when talking about the value of a company or, in personal finance, an individual’s net economic position. Assets?—?liabilities?—?all tax obligations = net worth.

Then consider that you should have a “Fire Sale” net worth and “Reasonable Market Value” net worth. Fire sale is if the estate had to blow out everything tomorrow, thus “Fire Sale.” Reasonable market value net worth is based on what the market would fairly pay for the assets if we had a reasonable market of buyers and sellers.

The reality is net worth is mostly an inflated number used to massage the wealth ego whereby the individual assumes all market conditions are perfect and buyers are lined up for your ‘ass’-ets (none of which would ever happen).

So what is Grant Cardone’s net worth? Well it’s hard to say. I would have to sell Cardone Training Technologies, Cardone Group, GrantCardoneTV, my book rights, copyrights, ownership of future book deals, my name, apps, and find a buyer for 4,500 apartment units. And then I have would have a very serious tax event that I would do almost anything to avoid.

Net worth might be an impressive way to measure a person’s wealth, but you can not use net worth to operate or live. More important than net worth is net passive cash flow. Cash flow = gross revenue?—?all expenses?—?debt?—?taxes is very powerful especially when it continues to produce even when you are not there.

“More important than net worth is net passive cash flow.”

Cash flow is a much more valuable indicator of wealth than net worth because you can spend it, reinvest it, take care of the family and grow your net worth. This is what provides the wealth builder with a sense of security, while net worth is really just exaggerated bragging rights.

Hope this helps, If you have any questions asked in comments I will answer.

Grant Cardone

Hey, I'm maxed on Connections here, to keep in touch hit the "follow" button at the top of the page so we can continue to grow this viable network of like-minded people committed to creating an extraordinary life.