According to Grant Cardone, that is.
Is he wrong? Technically, no. Based on inflation, a million dollars back in 1960 is equal to almost $10.6 million now.
Cardone and the article from Yahoo Finance add:
“A million was a lot of money in 1960. If money deflated at the rate that it has in my 65 years, money is worth 10% of what it was then. So, if a millionaire was rich in 1960, you need $10 million in 2024 to be considered rich.” According to him, if you’re still using the idea of $1 million as a benchmark for wealth, you’re behind the times.
Cardone is not the only uber rich guru sounding the alarm about the rapidly rising bar of what’s considered “wealthy.” Andrew Tate, Suzie Orman and others are repeatedly out here warning that even a few million is nothing anymore.
Michael Saylor, Mr. Bitcoin himself, has mentioned how the real rate of inflation is closer to 7%, not the traditionally lower figure of 2–3% that the government likes to quote.
The true rate of inflation is probably unknowable because it’s a constantly shifting figure. But Saylor’s not wrong. Things like college tuition and housing have gone up way more than 2–3% a year over the last few decades. As I’ve written about before, a base model Honda Civic (a popular middle-class car) was $13,000 back in 2004. Now it’s closer to $25k. That same model car, by the way, cost anywhere between $1,850 to about $5,000 back in 1984.
That’s an astounding rate of cost growth. Granted, Civics over the years have seen technical improvements and such that have inflated the costs. But a five-fold rise in 40 years for a basic set of wheels? That’s a lot.
Then you have housing. In some states the average cost of housing went up over 10% just between 2023 and this year. In some states like California such astronomical growth is a given pretty much every year. The Covid pandemic stimulus and money printing only made things worse. Prior to 2020, homes in the suburbs outside Philadelphia, where I went to high school, were routinely $300k-$500k to start. They were obtainable. Now the floor is $500k+, making housing in the area I consider home almost out of reach.
So, yes, the true rate of inflation is certainly higher than 2–3%. Seven percent is probably about right give or take.
Cardone, Tate, Orman, and Saylor are right to warn about the spiraling cost of living. But how useful or worthwhile is it for the average person to try to achieve a figure like $10 million? All this guru cauterwauling is kind of pointless when you consider that the median net worth for retirees is closer to $200,000.
Even if the average retiree net worth is closer to $1.2 million, that number is skewed by the ultra wealthy. And it’s still way, way behind the ten mil figure Cardone quotes.
Rather than being obsessed with making everyone try to get a bigger number, shouldn’t the focus be on what’s causing all this inflation? Why is our standard of living being rapidly eroded away? Why do we accept that tuition will just rise way beyond the rate of inflation? Or that things like real estate will just go up ridiculously higher no matter what? All while our wages stay stagnant relative to the cost of living? Why do we just accept those things as if they were cycles of the moon or river currents? Pure natural phenomena with no human element controlling them.
Just recently the longshoremen went on strike, giving the country a little scare for a few days. One of their demands was a pay rise of 61%, which evidently they’re going to get. Labor rights activists and other pro-union types may celebrate, except this pay rise is only going to trickle down into the cost of unloading stuff at port. This will increase costs for everyone else. Meaning you and me.
The longshoremen are not wrong to seek higher wages. Everyone wants to get paid more and be richer, obviously. But the pressure of all this inflation and the rising cost of living has created a rat race treadmill panic that virtually guarantees that most will lose out anyway.
I read an article on here a few days ago about how the American Dream is dead for Gen-Xers and beyond. And how the Boomers had it best. I left a comment about how most complaints that generations after the Boomers have about being “screwed” are related to the rising cost of tuition and housing. Without those twin cost threats, life becomes way more manageable. In the effort to make things “affordable” to more people, the government intervened in those two areas significantly, via low interest rates and government-backed student loans. That intervention has only driven up those costs way more than they would have otherwise.
Bad government policy and government spending have largely driven inflation. Inflation is not magic. While gurus like Cardone and others are not technically wrong, the focus shouldn’t be on more “toxic wealth accumulation.” That’s an unwinnable quest. The focus should be to rein in reckless government spending and irresponsible central bank lending, which only hurts the very people those institutions say they’re trying to help.
When you’re being told that even if you’re a millionaire you’re “broke” and essentially hopelessly behind the curve, that doesn’t mean it’s time to dig in and “grind harder.” That means it’s time to focus our efforts on examining the messed up system in which we live, and to figure out how to get it to stop screwing us so hard.
Dean Brooks 