4 unusual spending habits of self-made millionaires

Grant Cardone doesn't buy things that can be rented, and only buys a home after saving twice the home's value.

Grant Cardone (64 years old) is a famous American self-made millionaire with three companies worth millions of dollars. He has written several New York Times top-selling books . Cardone also hosts a radio show called Cardone Zone, which is considered a "Top Sales Professional" and a "Top Business Coach" to follow on Twitter.

On CNBC , he shared four money habits that have stuck with him over the past 20 years.

A lot of people know how to make money. But making money is only part of the math. You need to know how to multiply them, and when you should or shouldn't spend on something.

It took me 20 years of experimenting and learning to accumulate millions of dollars. I had to be very strict with myself and invest as much as possible in order to have income generating properties. Currently, I make money from 18 companies I founded and have passive income from thousands of apartments.

Here are four unusual money rules I've followed since my youth. They made me rich.

1. Don't buy big things unless you have double their savings

American self-made millionaire Grant Cardone. Photo: Grant Cardone

I have a few friends who, as soon as they make a lot of money, immediately reward themselves with luxury cars, yachts, and lavish trips.

As for me, I set a rule for myself: To buy a good watch or even a house, I have to have savings twice the price of them. This keeps me from overspending on something. It also gives me more time to think about whether I really need it.

So, instead of spending large sums of money on things that only have a short-term impact on my quality of life, I choose to invest the money in improving my business.

2. Don't buy things that can be rented

When I was still trying to make money, I only spent a lot on things that could help me increase my cash flow. For example, buying a house to rent out. I don't buy anything that I can rent, like a house or a car. As a result, I avoid the large monthly payments and maintenance costs that come with owning one.

For example, in 2012, I sold my house and rented it for almost 10 years. This helps me have more money to invest in passive income real estate. When I had saved a lot of money, I bought a house, completely with cash.

But for now, I still rent a car. I never rent more than 24 months, even though the price will be cheaper than short term rental. A lot of things can change in 2 years. And I don't want to be stuck with a car that doesn't meet my needs anymore.

3. Don't spend money to impress others

My goal has always been to create a legacy that can be passed on to my family. This is more important than buying things you don't need.

So even if I can afford something, I don't buy it just to impress others. Instead, I will invest my money and build a fortune.

Until now, even though I have enough money to buy expensive things, I still consider myself a thrifty person. I don't care about polishing myself and always live as minimally as possible.

4. Passive income target

If I make $100,000 a year from my main job and $20,000 a year from passive income, I would try to spend only $20,000 on non-essentials.

All of these rules require you to be very strict with yourself, and it's not for everyone. Sometimes, it is true that I also think that I have worked so hard, why can't I enjoy the results. But by sticking to the rules above for two decades, I've weathered many recessions and pandemics.