Benitez can only dream of being awash with cash at Anfield.
Yet even if he had a pot of gold, the Spaniard believes bringing through young blood is still the best way to get long-term success.
He added: "It's not easy to do what City are doing. You saw it with Chelsea, when you spend big money and sign a lot of players.
"Maybe you can be successful like that, but for how long?
"For the majority of other clubs, it's not easy because they don't have those amounts. So you have to keep building little by little and be successful with the signings you make each year.
"In the short term you can be successful their way, but in the long term you have to look at other things.
"I'm in charge of the academy here now - we want to create a philosophy throughout the club that is linked with the first team.
"If you produce local players, you have players with more passion, desire and commitment to the club. That needs time."