"Live where you rent and rent what you own."

[Christian G Leone]

I'm sure you've all heard the saying "live where you rent and rent what you own." Although I think most of us can agree that Grant Cardone is a salesman and a showman, is there any merit to what he's saying?

My goal is to create cash flow. I live in northern New Jersey which is an expensive market (duplexes going for over $600k). I currently live home (24 yo) and have been able to save up $70k over 2 years from my engineering job. Does it make sense to purchase a single family home in a less expensive market like south jersey and rent that out and move myself into a modest 1 Br 1 Ba apartment for $1700 per month? My original plan was to house hack but I've been looking for a year and I haven't been able to find anything that makes sense.

Any advice is appreciated!!!

[Scott E.]

It's easy for people like Grant who have a net worth of ~$1,000,000,000 to say this. But for the average person, owning a home is without a doubt a tool to increase your net worth.

Stat from Business Insider: According to data from the Federal reserve, the average homeowner has a net worth 2.8 times the net worth of the typical person who doesn't own a home.

I've heard Grant say that owning the home you live in is a liability. Yes it can be. It's a liability when you need to change a light bulb, repair a leaky faucet, or replace your roof. But in my experience, appreciation outweighs the maintenance expenses by a lot.

I bought my first house at 25 and sold it 5 years later. I walked away with a tax-free net profit of $130,000. Would I have saved $130,000 had I chosen to rent for those 5 years instead? Nope.