Grant Cardone says Warren Buffett’s big investments all have 1 trait in common

Real estate mogul Grant Cardone isn’t known for holding back, even when sharing his views on investing legends like Warren Buffett.

“Warren Buffet does not buy stocks,” Cardone declared in a YouTube video. It’s a bold claim, considering Buffett is one of the most successful stock market investors of all time. But Cardone quickly clarified his stance.

“Every company Warren Buffett has ever invested in — from Coca-Cola to Apple Computers — he was taking a major position in a company, not in a piece of paper,” Cardone explained.

Buffett’s Berkshire Hathaway (BRK.B) owns about 9.3% of Coca-Cola (KO), and while it has trimmed its Apple (AAPL) stake in recent quarters, the conglomerate still holds 2% of the tech giant.

According to Cardone, there’s a common thread in these investments.

“All those companies have one thing in common, what do you think it is? Cash flow,” said Cardone. “He [Buffett] didn’t invest in Apple Computers until their cash flow was so stable. He’s a coward investor. He wants to buy real companies that have real assets, and the cash flow. He wants a check every month.”

While calling Buffett a “coward investor” might sound like an insult, Cardone applies the same label to himself.

“I’m a coward investor. I don’t invest in stocks, I’ve always been a coward,” Cardone said in a recent interview.

For Cardone, cash flow is king. Owning businesses that generate reliable cash flow allows investors to earn a return without constant involvement — something Cardone sees as essential for long-term wealth.

As he put it: “If you don’t find a way to make money while you sleep, you will work until you die. In my case, I’m going to work until I die, and my money will work after I die.”

If you’re looking to put this strategy into action, here are some simple ways to get started.

When it comes to assets that prioritize cash flow, Cardone has a clear favorite — real estate.

“You only buy things that produce cash flow that can’t be disrupted — like the real estate I buy,” Cardone told YouTuber Logan Paul during a 2019 appearance on the Impaulsive podcast.

Cardone went on to describe the durability of his investments. “The real estate I buy is indestructible,” he said. When Paul asked why, Cardone explained that his properties generate rents of $1,500 a month, and no matter what happens, those rents aren’t likely to drop below that level.

Cardone makes a solid point. High-quality properties can provide investors with a steady stream of passive income, which often adjusts with inflation over time. Additionally, inflation tends to push property values higher, reflecting rising costs of materials, labor and land.

The best part? You don’t need to be a real estate mogul like Cardone to take advantage of this strategy. One popular option is publicly traded real estate investment trusts (REITs), which own income-producing properties, collect rent from tenants, and distribute a portion of that income to shareholders as dividends.

Another alternative is real estate crowdfunding platforms, which allow everyday investors to own shares in rental properties without the hefty down payments or the responsibilities of property management. Depending on your preferences, you can gain exposure to residential properties, grocery-anchored commercial real estate, or even farmland, all without the traditional barriers to entry.

Read more: Commercial real estate has beaten the stock market for 25 years — here’s how savvy investors can become the landlord of Walmart, Whole Foods or Kroger

High-yield savings accounts offer a low-risk way to generate passive income while keeping your funds accessible. These accounts typically offer much higher interest rates than traditional savings accounts, allowing your money to grow without needing to lock it away in long-term investments. This option is ideal for those who want a secure, liquid source of passive income with minimal effort or risk.

These days, some banks and financial institutions are offering high-yield savings accounts that pay upwards of 4.5%.

In the U.S., most savings accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor, per insured bank. This insurance provides protection to depositors in the event that the bank fails, ensuring that their funds are safe and accessible.

At the end of the day, keep in mind that despite his legendary success in picking winning companies, Buffett doesn’t believe that’s the right approach for most investors.

“I do not think the average person can pick stocks,” he stated bluntly at Berkshire’s 2021 shareholders meeting.

Instead, Buffett champions a much simpler strategy, famously stating, “In my view, for most people, the best thing to do is own the S&P 500 index fund.”

This approach gives investors exposure to 500 of America’s largest companies across various industries, providing diversified exposure without the need for constant monitoring or active trading.

Buffett believes so strongly in this strategy that he has instructed 90% of his wife’s inheritance be invested in “a very low-cost S&P 500 index fund” after he dies.

The beauty of this approach is its accessibility — anyone, regardless of wealth, can take advantage of it. Even small amounts can grow over time, and some apps even let you invest in an S&P 500 ETF with your spare change, making it easier than ever to build wealth alongside the world’s financial elite.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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