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It took me 20 years of trial and error before I achieved a multimillion-dollar net worth. I had to exercise tremendous discipline and invest as much money as possible into income-generating assets.
Now, I draw income from the 18 companies I started, and the 12,000 apartment units I own that make passive income.
Here are the four unpopular money and spending rules I followed, at a young age, that helped me get rich:
As soon as some of my friends started earning more money, they would reward themselves with fancy cars, boats and trips to Paris.
But I set a rule for myself: In order to buy an expensive watch or even a house, I had to have twice its price saved up. This kept me from overspending on something, while also giving me time to consider whether I really needed it.
Rather than dropping cash on big one-time purchases that had limited effects on my overall quality of life, I focused on putting my earnings towards improving my businesses.
While working my way to becoming a millionaire, the only big-ticket items I would buy were ones that could increase my cash flow, such as commercial properties I could rent out.
I never bought anything I could lease — like a primary residence or car — so that I could avoid the higher monthly payments and upkeep costs associated with owning.
In 2012, for example, I sold my home and lived in rental houses for almost 10 years. This freed up more money for me to invest into money-generating real estate. Once I saved up a hefty amount, I bought a house with cash.
To this day, I still lease my cars. However, I never extend a lease for more than 24 months, even if it makes the bill more affordable. A lot can change in two years, and I try to avoid being stuck with a car that doesn’t serve my needs.
My goal has always been to create a legacy of generational wealth for my family. That was more important to me than buying things I didn’t need.
So even when I could afford something, I didn’t buy it just to impress my peers. Instead, I invested at a higher rate and built my wealth in private.
Even though I now have money to buy expensive things, I still consider myself as fairly frugal. I don’t care about being flashy, and I try to live below my means.
If I earned $100,000 a year from my job and $20,000 a year in passive income, I would try to only spend $20,000 on things beyond my basic living expenses.
All these rules require a great amount of discipline, and they might not be for everyone. Occasionally, I would wonder why I was working so hard but not able to enjoy the fruits of my labor.
But because I abided by these rules for two decades, I’ve successfully weathered several major recessions and a global pandemic.
By Grant Cardone, Contributor