Grant Cardone Roasts Luxury Items and Recommends Real Estate Instead: ‘Birkin Bags Are Not Investments’

Grant Cardone, author of “The 10X Rule,” has been educating people about real estate for decades. He preaches investing your money so you can multiply it and is not a fan of keeping money in the bank where it will earn a low interest.

While stocks and real estate have been popular investments for decades, alternative investments like crypto have been gaining steam. Alternative investments give people more choices, but Cardone believes that some people are a bit generous with how they define alternative assets.

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The real estate mogul recently published an X post reacting to a video of a woman buying six Birkin bags. She referred to them as investments, but Cardone wasn’t having it.

“Birkin bags are not investments. Those are ‘look at me’ expenditures,” he stated in the post. 

Calling It an Investment Aims to Justify an Irrational Purchase

Cardone explains in his post that using the same money to buy real estate could have generated cash flow every month. Real estate also has the potential to double every seven years.

Luxury items, in the simplest terms, are items that display luxury. They aim to show off a perceived prestige and make the buyer look more impressive to others. 

Some people call them investments in an effort to justify a purchase or appear smart. This trend extends beyond handbags. 

One X user responded to Cardone’s post asking if he views Richard Mille watches as investments. Cardone simply said, “Stupid – watches are not investments. [They’re] watches.”

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You Can Buy Luxury Items, But They Are Not Investments

Consumers are free to buy luxury items, but you should have your finances in order before you make those types of purchases. It’s better to prolong those purchases and put your money into stocks, real estate, or another true investment. 

Luxury items display wealth, but who are you displaying it to? Most people glance at luxury items and then continue with their days. Instead of aiming to impress others by displaying wealth, Cardone is an advocate of building real wealth. 

While Cardone isn’t afraid to show off his watches, private jet, and real estate properties, he has built real wealth. As someone who is selling people on the benefits of real estate and how it can drive wealth, it makes sense for Cardone to show off what he has accomplished. 

Cardone also built wealth before buying those things. He’s not going deep into credit card debt to afford luxuries. It’s better to be wealthy than it is to look wealthy. 

See Also: Are you rich? Here’s what Americans think you need to be considered wealthy.

Create a Budget

If you want to buy luxury items, you should take an inventory of your budget and see how much you can afford. Mapping out your income and expenses will help you gauge how much you can afford, but that’s just a starting point.

People who want to build long-term wealth should invest a percentage of every paycheck before they start spending it. For instance, if you set aside 10% of every paycheck before covering any expenses, it’s easier to grow long-term wealth. That 10% figure is a minimum, and you can contribute more than 10% of your paycheck when you have fewer expenses or want to reach your financial goals sooner.

Luxury items will slow down your path to long-term wealth. The money you put into these items cannot go toward any investments. While some people like to view luxury handbags as investments, they can also turn you into a target if you are walking alone at night. 

With that said, people like to spend money on their hobbies. If buying luxury items is your hobby, you can set aside some money for it each month with a good budget. However, you should put your investments above luxury items.

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