Grant Cardone, an entrepreneur and real estate investor, recently shared a glimpse into his family’s approach to wealth building through a TikTok video posted on January 12. The video, which captured the attention of his followers, was captioned, “14 year old will be a millionaire before she’s 20 years old” and featured his daughter, Sabrina Cardone. In the video, Sabrina outlines her path to becoming a millionaire by the age of 20, a goal that hinges on a mix of work, investment and strategic financial planning.
Sabrina explains, “I’m going to be a millionaire before I’m 20 and this is how. I work for my dad’s company. I have a contract with them and get paid every month. That money then goes into real estate where I get some passive income ($600) I get to go spend. I never get to touch that principal income. So every year that principal doubles, triples, it stacks on top of each other and over time that principal in real estate will make me a millionaire.” Her strategy showcases not just a keen understanding of how to leverage employment income into investment but also the importance of reinvesting earnings to compound wealth over time.
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Grant Cardone further elaborates on this financial strategy by highlighting the incentives he offers to encourage his daughter’s entrepreneurial endeavors. “One of these TikToks goes to 10 million, I’m going to give her a $10,000 bonus. That $10,000 goes and buys real estate,” he says. This approach not only incentivizes content creation but also teaches the value of reinvesting windfalls into appreciating assets like real estate.
He adds, “Let’s say she averages $50,000 a year, which she will. $50,000 x’s 10 years, which she will have at least 10 years, is $500,000. If that money doubles because she never touched it, she’s a millionaire. It will have paid her $300,000 in income that was not taxed and I wrote off $500k of salary from the IRS so it’s a win-win.” His statement emphasizes the dual benefits of their approach: substantial growth in Sabrina’s personal wealth and significant tax advantages for the Cardone family.
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As to be expected, the comments section of TikTok was filled with users highlighting the unique advantages she holds. One user quipped, “Literally why didn’t I think of having a millionaire for a father,” while another noted, “‘I work for my dad’s company’ the end. That’s how she’s rich.” Another comment said, “So step 1: be born rich.”
These responses underscore a critical point: Sabrina’s path, while inspiring, is not one that the average 14-year-old could easily emulate, given that not everyone has a billionaire real estate investor for a parent.
However, despite the advantages that Sabrina benefits from, the core principles of her strategy — earning, saving and investing — remain applicable on a more modest scale for young people. Financial literacy and the practice of investing a portion of one’s income, even if it’s not from a high-paying job at a parent’s company, can still pave the way for financial growth over time. For instance, teenagers with part-time jobs can begin by saving part of their earnings and exploring investment options suitable for their age and income level, such as low-risk mutual funds or educational savings accounts.
A financial adviser can provide personalized investment strategies and invaluable lessons in financial planning tailored to a family’s financial situation and a child’s future goals. This collaboration can help demystify the financial world for kids, making concepts like investments, savings and compound interest more accessible and understandable.
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*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.
Jeannine Mancini has written about personal finance and investment for the past 13 years in a variety of publications including Zacks, The Nest and eHow. She is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Mancini believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.
Image and article originally from www.benzinga.com. Read the original article here.