Grant Cardone Explains Why 40% Of People Who Earn $250,000 Per Year Still Live On Paychecks: 'They Spent Money They Shouldn't Have Spent'

Marc Guberti

Wed, Jul 9, 2025, 10:46 AM 4 min read

Real estate investor Grant Cardone recently spoke on a podcast about the people who are living paycheck to paycheck despite earning $250,000 per year. He's baffled that high earners don't have much at the end of each month and pinpoints a clear reason why that's the case.

"They spent money they shouldn't have spent," Cardone said.

Cardone proceeds to explain how important it is to invest wisely and build your career while you can. He uses a bell curve analogy that you'll want to keep in mind as you grow your income and save money over time.

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The conversation initially went toward people being unable to live below their means. However, Cardone corrected the host and explained that the real issue is that people are living above their investments.

If you don't have a portfolio, you will live above your investments for a while. However, you have to invest regularly in your portfolio to eventually generate more passive income than active income. If you earn $1,000 per month in passive income and spend $5,000 per month, you are living above your investments.

It takes a long time before anyone can live above their investments. The issue Cardone has is with people who live below their investments and aren't doubling down on growing their portfolios. Making a bunch of unnecessary purchases will keep you at breakeven instead of giving you the opportunity to multiply your nest egg in the long run.

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Cardone then used a bell curve to demonstrate how people gradually lose value in the future. This type of value refers to how much active income you can make. Cardone explains that as people get older, tech replaces more workers, and you can't service as many people as you did when you – or your company – were younger, your ability to make income gradually goes down.

Cardone cited baseball players to explain how your value drops over time. He said that a baseball player who earns $40 million per year won't make that type of money when he retires. Cardone says that you have to maximize your investments during your highest earning years so your assets can cover you when you get older.