You'll Never Get Rich Playing Defense With Your Money You can't save your way to wealth.

By Grant Cardone

Opinions expressed by Entrepreneur contributors are their own.

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If you want money, you've got to get on offense.

I was raised on the "defense of finances" strategy. It made me act cheap for years. Not spending or investing in what I should and being miserable. I was taught that way because that's what my mother knew. But you can't win a boxing match or a soccer game without going on the offense. To win, you have to go for the knockout or the goal.

My father died when I was 10. My mother was left with the house and a small insurance settlement. She sold the house within a month because she was worried that there was no income coming in and it was an expense. She always was worried about money then and this is the mentality I grew up with -- money is to be saved, be frugal, don't spend your hard-earned cash. But those are lies. This mentality is just outdated thinking that is keeping you from your goals!

Related: Will Getting Rich Make You a Jerk?

A financial defense attitude is saving money and not spending. A financial offense attitude is spending money and investing.

You can't save your way to wealth. Money is to be used, not stored. I'm successful because I do offense moves with my money. Think about this: 0.10 is the savings rate at your local bank. The inflation rate is 3 percent. Do the math. You are losing money by having it set in the bank.

A $10,000 investment each year for 10 years in the same vehicle with a 15 percent return will make you $243,000 at the end of that time. Your money has more than doubled! Compare that to .1 percent, the average rate from your local bank. In one year, $10,000 would give you only $12.00! You read that right, $12.

The definition of Inflation: when the value of the dollar goes down so it takes more dollars to buy the exact, same product. When the value of your money goes down, you'll need more in the future to equal what it's worth today. For example, $100,000 in 1958 is the equivalent to $868,000 today. Why? Because of inflation.

Related: 10 Steps Everyone Must Take to Get Rich

Put your money on the offense with this simple three-step plan:

  1. Set a goal. Determine your financial target.
  2. Income. Who's got your money? Find where it is so you can get it. Earn it.
  3. Invest. Find something to invest in that will reproduce money.

Implement the 95/5 Rule: 95 percent of your time, effort and energy needs to be dedicated to finding and making money; 5 percent of your time, energy and effort should be spent on expenses.

Use the Rule of 40: The rule of 40 is that basically, you need to get to a point to earn enough money so that 40 percent of every dollar earned, hits the bottom line as free cash flow. All energy, time and money are invested in increasing income.

Only use debt to increase income: Debt should never be used for school. Debt should never be used for cars. Debt should never be used for anything except to increase income.

Everybody needs to be onboard.

You need everybody onboard with this plan. I've seen families destroyed because one partner is on one page and the other is on another page. You need everyone on the same page. Everyone must be in agreement on the goals and how you are going to achieve them.

Related: How to Get Rich: 8 Success Habits Wielded by Multimillionaires

Focus all time, energy and money on increasing income.

Finding untapped income potential, making a household budget that keeps your spending disciplined, deciding if you really need to go to a movie or out to dinner, reinvesting in yourself -- it all needs to be focused and put through the filter of is it increasing your income?

Always have a daily goal, weekly goal, monthly goal, year goal and life goal. This keeps you focused on your targets and your energy spent in the right place. Once set, revisit and update your goals often.

Position yourself around people who are similar and are producing money. If you play golf, you need to find a golf course. The same is true of money. If you want money, go where the flow is.

When you go on the offense great things happen!

Grant Cardone

International Sales Expert & $1.78B Real Estate Fund Manager

Grant Cardone is an internationally-renowned speaker on sales, leadership, real-estate investing, entrepreneurship and finance whose five privately held companies have annual revenues exceeding $300 million.

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