Real estate investor Grant Cardone recently shared the biggest mistake people make with their finances. While common mistakes include not setting a budget, letting debt accumulate, or delaying investments, Cardone approaches this question as a high-net-worth individual and presents an issue that doesn't receive as much spotlight.
"Most people are not even thinking about scaling," Cardone said in a TikTok video.
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Incremental Growth Is Limited
Cardone criticized the idea of aiming for incremental growth and believes that you are leaving money on the table if you only aim for moderate 10% to 20% increases to your annual earnings. He has scaled his wealth with real estate, businesses, and other assets, which has contributed to his view of scaling being more valuable than incremental growth.
"Last year, we did X. Now, we're going to do X plus 20%," Cardone said when discussing incremental growth.
Cardone then explained that this type of thinking involves looking at one of your company's busiest days and seeing how you can replicate it. Workers may look at similar jobs in their field that offer higher pay than their current positions or pick up a side hustle to make up the incremental 20%.
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Scaling To 10X
While it's better to increase your income by 20% instead of keeping it the same, Cardone is an advocate of scaling wealth. He shared about the concept in his book "The 10X Rule" and touched upon it in the TikTok clip.
"I did X, and I'm going to 10X," Cardone said when discussing scaling.
Scaling to 10X requires different thinking from incremental growth. Boosting your revenue by 20% in a single year involves the same business model, but refining it a bit. Cardone warned that a bad economy or unfavorable government policies can derail 20% growth.
Cardone's type of growth requires substantial change. You may have to reinvent your business, tap into high-growth opportunities that currently aren't on your radar, or rapidly develop new skills. It forces you to be more intentional with your time and seek parabolic growth opportunities instead of incremental income growth.
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Scaling Only Works With A Business
Cardone's ability to scale isn't just a function of how much time he puts into his companies. It's also important to consider that he owns businesses instead of working a full-time job.
Most employees don't have opportunities to scale because they are paid per hour. There are only so many hours in the day, and a higher-paying job is an incremental jump instead of a 10X transformation.
Starting a business is the only way to scale in the way that Cardone describes. A portfolio can eventually outgrow your income, but that's not scalable income growth. A side business can turn into a full-time career, and if you make money with a business, it's easier to scale. You can hire people, release new products, invest more in advertising, and use other strategies that are designed to attract and serve more customers.
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