Self-made millionaire: Don't buy a home

Millionaire: Your home is NOT an asset — it could be a trap
Millionaire: Your home is NOT an asset — it could be a trap

If self-made millionaire Grant Cardone could give his younger self one piece of advice, it would be to skip the home purchase.

"I bought a house when I was 30 years old," Cardone tells CNBC. Looking back, "I would never buy one."

Houses are "traps that prevent people from ever having enough," Cardone writes on his blog. "Sold as the American dream is more like the American nightmare where people can't move, don't ever truly own and must continue to spend to keep."

Self-made millionaire Grant Cardone.
Courtesy of Grant Cardone

While many people think of real estate as an asset or an investment, it should be considered a liability, Cardone says.

At the end of the day, owning a home takes money out of your pocket: mortgage payments, property taxes, and repairs are just a few of the many expenses that come with home-ownership.

He's not the only one to challenge the notion that a home is an asset.

In personal finance classic "Rich Dad Poor Dad," author Robert Kiyosaki emphasizes that homes should be considered a liability, as they're expensive and don't always go up in value.

"I am not saying don't buy a house. What I am saying is that you should understand the difference between an asset and a liability," Kiyosaki writes. "When I want a bigger house, I first buy assets that will generate the cash flow to pay for the house."

Of course, depending on your individual situation, you may be better off buying than renting, and it's important to weigh the pros and cons of home-ownership before making such a weighty decision.

But to Cardone, the choice is simple. His stance is, "Unless you have 20 million bucks in the bank, in cash, you have no business buying a house."