Real estate is one of the most popular investments around the world. Whether you’re looking to buy a primary residence, a rental property, or a commercial space, there are endless options available in the market. Unfortunately, most people just buy the wrong kind of real estate. They make decisions based on emotions rather than a sound financial strategy, and this can lead to long-term financial consequences.

“It’s a selfish decision to have a home, okay?” says Grant Cardone, an American entrepreneur and real estate investor. He believes that most people shouldn’t buy a home, and no one should buy a home if they want to build wealth. This statement may seem radical, but it is based on a simple fact: homes were not built for people; homes were built for banks.

“The bank created that product to sell money,” Cardone explains. “You can’t just loan people money. You need a product in between.” The product in between is real estate. The bank lends money to people to buy a home, and the home serves as collateral for the loan. This allows the bank to make a profit from the interest paid by the borrower.

This system has been in place since the 1950s, when the concept of the American Dream was born. “Everybody should have a home, right?” Cardone mimics the bankers’ dialogue. “Oh, man, that’s pretty good. We should call it something like the American Dream.” The politicians supported this idea, and it became a cultural norm. However, Cardone believes that this norm is a big old fat lie.

“The banks made all the money on the homes,” Cardone says. “It wasn’t even the builder or the homeowner. It was always the banks.” He believes that buying a primary residence is a liability, not an asset. It doesn’t generate any cash flow, it requires constant maintenance and repairs, and it ties up a large portion of your net worth in one illiquid asset.

Cardone’s strategy for building wealth through real estate is to focus on cash-flowing assets that generate passive income. This can include rental properties, commercial spaces, storage units, or land. The key is to buy properties that generate more income than expenses, and to continuously reinvest the profits into more assets.

“Most people think that they need to own their own home,” Cardone says. “But they don’t understand that owning one door is a trap.” He believes that homeownership is a form of forced savings, which restricts your ability to invest in cash-flowing assets. He encourages people to rent their primary residence and use the saved money to invest in assets that generate cash flow.

Another scheme that Cardone believes was created by banks is the college education system. “Everyone should have a proper education, but they don’t have the money for it,” he says. “But they should have it.” The banks offered debt and free loans to college students and families, which led to a significant increase in tuition fees. This created a cycle of debt for students who graduate with a large amount of debt and limited job prospects.

Cardone’s message may be controversial, but it is a wake-up call for people who want to build long-term wealth through real estate. Buying a primary residence may be a cultural norm, but it is not a sound financial strategy. Instead, focus on cash-flowing assets that generate passive income and reinvest the profits into more assets.

In conclusion, most people just buy the wrong kind of real estate. They make decisions based on emotions and cultural norms rather than a sound financial strategy. Buying a primary residence may seem like a wise investment, but it is a liability that ties up a large portion of your net income.