Winning breeds winning, Real Madrid have nailed it in the CL in the last 5-6 years and it has created supreme confidence.
Real Madrid's wage bill is still over €100m more than ours, that's 2-3 world class players and a better quality bench difference.
What they have done is definitely impressive with young players, but you're also adding them to a team that wasn't built in a few seasons, Real Madrid have been in a league vying with the best Barcelona era in history for a good 12 years. It also helps that the generation of Spanish players has been fantastic for some time. How can Juve do that? Real Madrid and Barcelona can buy any Spanish player they want. Italy doesn't have that talent, doesn't have the money to hold onto them, and loyalty is split between more teams.
What Real Madrid do well is balance the books well - buy high profile players of the right age, so even "flops" sell well. There is also an added prestige for the buying club from them. We buy more older players (because of budget), more useful in our league, little sell-on value.