Due to various reasons, like disillusionment with traditional 9-5 jobs, rising inflation, and tech tools becoming more accessible, a growing number of Americans are venturing into entrepreneurship. But according to real estate mogul Grant Cardone, that path may not be as straightforward as it appears.
“I wouldn’t go start a new business today — dumbest, most selfish thing a person could do,” he stated bluntly in a recent video on TikTok.
Cardone expressed skepticism about the capabilities of aspiring entrepreneurs, challenging their readiness and practical know-how, asking, “You can’t work for somebody else, how are you going to work for yourself? You don’t even know what you’re doing. Like, you can’t even pay rent. F—, how are you going to pay people?”
He stressed that a good business should not only generate substantial cash flow and have the capacity for expansion but also operate independently of the owner’s constant involvement.
“A good business is a business I could walk away from, it’s not dependent upon my ability, my talent, my skill or my body or my time,” he explained.
Two Profitable Paths
Unfortunately, Cardone doesn’t believe that the majority of businesses have these desirable traits.
“Most businesses are s— businesses because they don’t scale, they don’t cash flow. They’re just hard businesses. They don’t have any profit. There’s 32 million small businesses in America,” he said.
Despite this harsh critique, Cardone acknowledges the potential in two sectors.
“Real estate is a great business,” he said.
Real estate can present a lucrative opportunity for generating consistent income streams through rental earnings.
And these days, you don’t necessarily need to be a landlord to collect rental income. You can buy shares of publicly-traded real estate investment trusts (REITs). Or, you can explore crowdfunding platforms that allow you to own a percentage of physical real estate — from rental properties to commercial buildings and even plots of land.
Additionally, Cardone pointed to the banking sector as a lucrative field, stating, “A bank is a good business — if you can be the bank. Go in for that one.”
Although banking and moneylending are challenging businesses for individuals to start, the stock market offers a viable pathway to participation through bank stocks. And being a bank can indeed be “a good business.” JPMorgan, for instance, recently reported nearly $50 billion in profits for 2023.
Read more: Thanks to Jeff Bezos, you can now cash in on prime real estate — without the headache of being a landlord. Here’s how
Cardone’s message arrives at a particularly relevant time, as the landscape for entrepreneurship in the U.S. is witnessing significant growth.
The Census Bureau’s data reveals a notable trend: at the onset of the COVID-19 pandemic, there was an initial decline in new business applications in March and April of 2020. However, this downturn was quickly followed by a dramatic increase, with applications soaring to an all-time high in July 2020. Despite some fluctuations in the ensuing months, the number of applications consistently remained at historically high levels.
In particular, there were 457,316 new business applications submitted in December 2023. To put that in perspective, the highest the series had seen before the pandemic was 314,337 applications in December 2019.
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