Don't start investing until you have $100,000.

Van Nuys, CA · Member since 2016 · 89 posts · 23 votes

Once of my favorite entrepreneurs would have to be the one and only Grant Cardone. So naturally I listen to his podcast and follow a lot of his material. One number that he continuously brings up is $100,000 and once you have that kind of money in the bank, its time to start to invest. Which in some aspect I do agree. A 10%on $5000 is just $500 where the same on $100,000 is $10,000, which is much more interesting.

This ideal comes up quite a bit with other motivators and entrepreneurs, to get first things first and make the money before you invest it.
This website clearly breaks that mold so the question is, what do you think is the best route? To make all the money and then figure it out or to make some small amounts and work with that? What experiences can you provide with both ends?

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Michaela G.

Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes

I would have never started investing, if I had followed that rule. huh!

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Whitney HuttenPro Member
Investor · Boulder, CO · Member since 2016 · 1k+ posts · 1k+ votes
9y
To the OP, I would imagine that Grant Cardone's comment had more behind it. I purchased my first property with $7k of my grandparents money and then house-hacked first year to get the money for the next down payment (and paid my grandparents back)... and so on. Having that first house is what got me in the game and is the reason why I have any savings at all!
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Zachary Wood
Professional · Saint Louis, MO · Member since 2016 · 7 posts · 0 votes
9y
Agree with @Whitney Hutten; I got in the game by buying my starter home (townhouse), and then turning it into a rental one year later. One, I would not know the game as I know it now if not for that purchase at 24 years old, and Two, I surely didn't have 100k in savings the year after I got out of the military.
Yes, 100k would have helped, but I needed until 33 to have that. Starting at 33 would have put me 9 years behind in learning from mistakes and figuring out my own goals.
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Sevan Serafino
Chicago, IL · Member since 2016 · 3 posts · 0 votes
9y
That doesn't sound right to me. $100K in the bank is a milestone, not a toll gate. It's time to deploy your capital once you have a 6 months emergency supply of cash on hand, and can save a high enough % of cash after servicing your debts and living expenses. I don't think this person is completely wrong per se. $100K is a lot of money to a lot of people (myself included) and it would be a milestone to proud of.
Waiting to pay all non-mortgage debts is not necessary either depending on the interest rates, etc...
This, for me, is a question of opportunity costs. If your return (cash flow + appreciation + salvageable working capital) exceeds payments on debts (as a % ROC) and there is a reasonable probability of sustaining that return, then by all means...you should invest before hitting that $100K mark. The interest, rental, dividend, etc.. income you could have received - but didn't - in the time it takes you to save $100K is a loss.
Also, there is the time value of money to consider. If you can save $100K in the next 3 years, then you can reasonably assume it will maintain parity with what you think $100K could buy you today. If it takes you 10 years to save $100K...you might need to save an extra 20K for it to buy you the same things. Don Draper made $45K in Mad Men which took place in the 60s/70s. That same amount in today's dollars is +$350K.
These principles apply to any investment you're considering. Not just real estate.
There are other factors to consider that should outweigh a specific savings amount before you start investing. One thing is certain...you need more than $0!
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Eric Bowlin
Investor · Plano, TX · Member since 2014 · 145 posts · 102 votes
9y
Grant does mostly syndication. It's tough to get into a deal for under 50k. If you want to syndicate a deal, he's probably right.
On the other, I started with about 60k in debt, a couple part-time jobs and a few thousand in the bank. A few years later I quit working at the age of 30 and live off a 6-figure passive income with my family, about 1500 miles away from all my investments.
So, it really depends what niche you're getting into.
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Christine Mwai
Investor · Alabaster, AL · Member since 2016 · 280 posts · 88 votes
9y
That's like saying don't drive unless you can buy the latest model of "XYZ" car. Well then, some will be walking for a very long time. Do the best with what you have and get the process moving in your favor. Each person's path and plan is unique.
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Denise Fisher
Rental Property Investor · Bristol, TN · Member since 2015 · 29 posts · 5 votes
9y
I would love to wait to have 100k but I'd never get started if I waited. It's one of the things I have loved about BP. All the information has given me ideas and resources to get started before I have that much money and make it work for me.
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Jacob Malo
Real Estate Investor · Cranston, RI · Member since 2017 · 9 posts · 0 votes
9y
I can understand the point of view. I think it depends. How much risk can you handle, what is your income? For me if I was to wait it would take a long time. I work as a McDonalds manager full time while investing part time and I'm sure you guys can imagine the difficulties that causes. I do agree that you can do a lot with $100,000 but do you want to wait? Any feedback? 👍🏼
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Wendhel Freeman
South Holland, IL · Member since 2016 · 1 post · 0 votes
9y
Very interesting point of view. Except for one thing. Who rolls out the bed with a 100K in their bank account??
I listen to Grant Cardone also, and many more in that space. This topic caught my attention, so I decided to drop my first line.
For anyone else, who thinks waiting until you have 100K in the bank to invest is complete pickle, then this is for you my friend:
Make your investments wisely, I recommend reading the Alchemist and the Richest Man in Babylon (Heard about one from a Will Smith motivation video, and the other from a Jim Rohn motivational video).
Money is not all that there is, how can you obtain it without some type of specialized knowledge. Unless you flip burgers.
Didn't you invest time to gain that trade? And what about the network you are building here, or anywhere else in your chosen niche; Isn't that network valuable to you?
I met 2 people last year that added up to $7 Million in Private funds for my real estate deals, I didn't meet them here, but you get my point?
Best Wishes,
Wendhel F.
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Jasmine Wilborne
Baltimore, MD · Member since 2016 · 57 posts · 17 votes
9y
A smart lady one said: Ain't nobody got time for that.
If I waited until I had $100k in the bank, I'd surely be too old and conservative to make the moves I am making now.
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Sean Kremer
Real Estate Investor · Milford, NE · Member since 2011 · 201 posts · 140 votes
9y
If I found myself listening to this Grant guy and he started talking about saving anything I'm afraid My face would be in my phone checking news and emails for the remainder of the event.....
I could make the argument that if you think that having 100 K sitting in a bank earning .5% interest is the best place to 'store; money........you need a little more schoolin.
I could maybe see securing a 100k line of credit that is there for emergencies, but even that is wasting time that could be used finding deals and making money.
Saving money is for amateurs or scaredy cats , I put it right up there with losing weight......all it does is make you miserable and remind you how screwed you are all the time..:)
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Paul MoorePro Member
Commercial Real Estate Fund Manager · Lynchburg, VA · Member since 2015 · 1k+ posts · 1k+ votes
9y
My business partner and I just interviewed a guy who invested $1,000 down on a duplex in 1992, and he has traded that up one time after another until now he just sold a 130-unit apartment complex for over $11 Million. I see the point, but I would start where you are.
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Lane Kawaoka
Rental Property Investor · Honolulu, HAWAII (HI) · Member since 2011 · 4k+ posts · 2k+ votes
9y
I agree. Don't do multiplication until you can do addition.
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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
9y
I'm pretty happy with the house hack I spent $15k on that will allow me to save that $100k.
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Kuba F.Pro Member
Real Estate Investor · Los Angeles, CA · Member since 2013 · 2k+ posts · 694 votes
9y
Who's Grant Cardone? Just kidding, but if you need permission to start investing, then maybe you shouldn't be investing.
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Jerry Poon
Real Estate Investor · Los Angeles, CA · Member since 2014 · 237 posts · 67 votes
9y
I don't believe in blanket statements like this. I know people who have started investing with much less, me included. Everybody's situation is different. Analyze your own numbers and don't blindly follow rules like this.
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Maddy Cooper
Realtor · Hingham, MA · Member since 2016 · 10 posts · 5 votes
9y
This post makes me think of something I have been playing a lot: Cashflow. It truly is an amazing game. In hours you are able to play out an entire lifetime of investing. The game has had me think a lot about what is the best strategic move: as soon as you come across a small deal take it? Or, save up those pay days and cash in on a sweet big deal. As a new investor still waiting to make my first investment, I am in this predicament currently. We have been concentrating on finding a triplex or fourplex BUT if we are able to save up enough (or use creative financing) before we find something and a big deal happens to cross our plate, no way we'd say no to it.
Everyone has different investing goals. I don't think waiting till you have x amount saved is necessarily a "one rule fits all" sort of deal.
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Andrew McIntyre
Riverton, WY · Member since 2016 · 51 posts · 4 votes
9y
@Elbert D. hey man good looking out thank you for the insight!
1 Reply
Jose Sarabia
Pocatello, ID · Member since 2015 · 25 posts · 4 votes
9y
Start now! As young as possible, just don't do what i did, had 10k saved up closed on my property(5k) FHA and went and paid cash for a ninja 1000cc 5k and was broke!!! Im doing decent now but i would have rather put that into the house
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Keeya WangJones
WA · Member since 2016 · 99 posts · 44 votes
9y
Andrew Johnson how hard is it to invest in Encinitas? I'm finding it very difficult to invest in San Diego. I came close to getting a R2-property in La Mesa on a nice street near Grossmount mall. I have a backup offer on the property but most likely it will go through to the first offer. Do you have properties in Encinitas?
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Sam Alomari
Rental Property Investor · Alexandria, VA · Member since 2016 · 75 posts · 58 votes
9y
Grant Cordone is a great sales expert. I used to dislike his aggressive actions and the way he closes deals because I believe he doesn't listen to the customer enough and just keeps pushing, attacking and brutally enforce the deal. However, it is his style and it works well for him, and sometimes you need a strong attitude in life such as his.
Back to the $100,000. Grant Cordon himself didn’t have that money when he started investing. I heard him saying that he was looking at some big deals and people around him thought he's out of his mind because he didn't have enough money.
If Grant Cordone reads this post, what would he say? "TAKE ACTION"! In fact according to Grant Cordone's 10X book, he would ask you to take massive action, 10 times what it takes to accomplish your goals!
You ain't taking action if your plan is "one day I'll save enough money to invest".
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Peter Ryabikin
Vancouver, WA · Member since 2016 · 25 posts · 19 votes
9y
I started real estate with maybe 15-20k about 7 years ago. Since then I have flipped over 100 houses. Money is not the only way to start in real estate. Being open to new opportunities and having motivation is the key!
1 Reply
Tommy Meza
Real Estate Agent · San Jose, CA · Member since 2015 · 10 posts · 2 votes
9y
I love Grant's philosophy. Keep in mind he's also preaching scalability. I've met investors that own well over 500+ units and they've all preached similar advice. In my opinion, it really comes down to the preference of the investor.
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Steve Bracero
Real Estate Agent · Westboro, MA · Member since 2016 · 1k+ posts · 471 votes
9y
@Sam Alomari
I agree, Taking action is the most important step.
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Lisa Lavine
phoenix, AZ · Member since 2016 · 72 posts · 12 votes
9y
I disagree. MOST PEOPLE don't have $100,000 sitting in the bank.
Translation : ONLY ,upper class(Rich) people ,should be investors Thats sounds like B. S to me.
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Daniel Cuevas
OP
Van Nuys, CA · Member since 2016 · 89 posts · 23 votes
9y
Originally posted by @Simon Wold:

I bought my first investment property after saving up 30K. It was a condo on foreclosure and puts ~$5500 in my savings / year to spend on other properties. If I waited until I had 100k, I would have never bought this deal.
My first live-in flip provided me with 100k+ to kick off my multi-family buy and hold business. In my area, this allowed me to acquire two cash flowing 4plexes. If I waited until I had 100k, I would have never bought the live-in flip deal or the two multi-family properties.
Take small steps. You don't need the 100k to start. Start with something you are comfortable with and re-invest your returns. After a few deals, you will realize the snowball effect of REI and 100K will become easier and easier to acquire.
How did you get a forclosure condo for just 30k? Did you use a private lender to do so?
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