The object of life is not to be on the side of the masses, but to escape finding oneself in the ranks of the insane.~ Marcus Aurelius
MJ DeMarco had an epiphany when he had a chance encounter with a Lamborghini Countach owner; the meeting led him to have a paradigm shift about wealth. The Millionaire Fastlane is the belief that creating wealth need not take 50 years of financial mediocrity devoured by decades of work, decades of saving, decades of mindless frugality, and decades of 8% stock market returns
The book has a get rich scheme title, but it is not the theme of the book; the Fastlane is just a metaphor on the path to creating wealth, which the author classified as the sidewalk, the slow lane, and the Fastlane. The author deliberately chose the name of the book because he knows the society as we have it structured is attuned to shortcut, quick fixes, and immediacy.
“The goal of the book is to change your perception about wealth and money. Believe that retirement at any age is possible. Believe that old age is not a prerequisite to wealth. Believe that a job is just as risky as a business. Believe that the stock market isn’t a guaranteed path to riches. Believe that you can be retired just a few years from today.”
Here are my favourite take aways from reading, The Millionaire Fastlane by MJ DeMarco.
“In fact, I’ve had to tailor the “hook” of this book to society’s definition of wealth over the real definition. Why the misdirection? Like Pavlov’s dogs, you’ve been trained to respond to it. You see, society has done a fabulous job of defining wealth for you, and unfortunately, they (again) have misled you. But don’t worry; if you want luxury, the Fastlane can deliver.”
If you want to keep getting what you’re getting, keep doing what you’re doing.
- The Millionaire Fastlane isn’t a static strategy that preaches “go buy real estate,” “think positively,” or “start a business,” but a complete psychological and mathematical formula that cracks the code to wealth and unlocks the gateway to the shortcut.
- The Fastlane is a progression of distinctions that gives probability to the unspeakable: Live richly today while young, and decades before standard norms of retirement. Yes, you can win a lifetime of freedom and prosperity, and it doesn’t matter if you’re 18 or 40. What “Get Rich Slow” does in 50 years, the Fastlane shortcut does in five”
The Millionaire Fastlane is like a yellow brick road paved in psychology and mathematics that put the odds of massive wealth in your favor.
- Wealth is not authored by material possessions, money, or “stuff,” but by what the author called the three fundamental “F’s”…
- Family (relationships)
- Fitness (health)
- Freedom (choice)
Get Rich Slow
- The message of “Get Rich Slow” is clear: Sacrifice your today, your dreams, and your life for a plan that pays dividends after most of your life has evaporated. Let me be blunt: If your road to wealth devours your active adult life and it isn’t guaranteed, that road sucks. A “road to wealth” codependent on Wall Street and anchored by time with your life wagered as the gamble is a dirty rotten alley.
- Nonetheless, the preordained plan continues to wield power, recommended and enforced by a legion of hypocritical “financial experts” who aren’t rich by their own advice, but by their own “Millionaire Fastlane. The Slowlane prognosticators know something that they aren’t telling you: What they teach doesn’t work, but selling it does.
- Get Rich Slow” takes a lifetime to travel and its success is nefariously dependent on too many factors you cannot control. Invest 50 years into a job and miserly living, then, one day, you can retire rich alongside your wheelchair and prescription pillbox. How uninspiring.
Time has no leverage
- Every day, people sacrifice their time for tiny nuggets of wealth, where time is the liability and not the asset. Anything that steals time and doesn’t have the power to free time is a liability.
- Within the Slowlane, time is mistreated like an effervescent fountain that runs forever. Unfortunately, the mortality rate is 100% and life’s prognosis is death. Some day you will die, and, hopefully, 60% of your time wasn’t squandered in a cubicle while your children grew up and your spouse cheated with the yoga instructor.
All events of wealth are preceded by process, a backstory of trial, risk, hard work, and sacrifice. If you try to skip process, you’ll never experience events.
Millionaires Are Forged by Process, Not by Events
- All self-made multimillionaires create their wealth by a carefully orchestrated process. They have and use the entire formula. Despite what you may have read or heard, wealth is not an event. Wealth doesn’t drop from the sky or come from a game show. It doesn’t ring the doorbell and await you on the front porch with balloons and a check the size of a refrigerator. Wealth does not chime from a machine with spinning bars, lemons, and cherries.
- Wealth is a process, not an event. Ask any chef and they will confirm that the perfect dish is a series of ingredients and a well-engineered process of execution: a little of this, a little of that, done at the right time at the right place, and wham, you have a tasty meal. Wealth creation has the same method of execution-a fabricated accumulation of many disassociated ingredients into an assembled whole that has value and is worth millions.
Wealth eludes most people because they are preoccupied with events while disregarding process. Without process, there is no event.
The compass for the trip-your roadmap-is the guiding force behind your actions. Your roadmap makes up your financial belief system and your preconceived convictions about wealth and money. There are three roadmaps that will chart your course to wealth:
- The Sidewalk
- The Slowlane
- The Fastlane
The Road Trip Can’t Be Outsourced to a Chauffeur
- We live in a society that wants to outsource everything, from our household chores to raising our kids. Outsourcing might work for a dirty bathroom, but it doesn’t work for wealth. Wealth’s road trip has no chauffeur and the toll can’t be outsourced to a virtual assistant in India.
- When someone grants you your desires without you exerting any effort, you effectively handicap process. The person I needed to become would have been dwarfed because process would have been outsourced. There is no wisdom or personal growth gained in a journey that someone else does for you. The journey is yours.
The Three Financial Roadmaps to Wealth”
Plotting your course to wealth and building your process starts with an examination of your current financial roadmap and the alternatives. There are three financial roadmaps:
- The Sidewalk Roadmap
- The Slowlane Roadmap
- The Fastlane Roadmap
The Sidewalk– Poorness
“When you’re the first person whose beliefs are different from what everyone else believes, you’re basically saying, “I’m right, and everyone else is wrong.” That’s a very unpleasant position to be in. It’s at once exhilarating and at the same time, an invitation to be attacked.~ Larry Ellison”
- The Sidewalk is the plan most followed, a contract for a pleasurable today in lieu of a more secure tomorrow.
- A Sidewalker exists in a state of one-something-from-broke: One album failure from broke. One business deal from broke. One gig from broke. One layoff from broke. On the Sidewalk, you’re always “one something” from being homeless, bankrupt, or back living in your parent’s basement.
- A Sidewalker’s financial destination doesn’t exist. The plan is to have no plan. Surplus money is immediately spent on the next great gadget, the next trip, the next newer car, the next fashionable styles, or the next hot fad. Sidewalkers are carelessly trapped in a “Lifestyle Servitude” fed by an urgent, insatiable need for pleasure, image, and instant gratification. This perpetuates a cascading cycle that spins faster every month, increasing the velocity of the burden, forever enslaving the Sidewalker to their job or their business.
The Sidewalk is the road most traveled because it’s the path of least resistance. Its siren song is instant gratification, and money is a hot potato that’s quickly exchanged for the latest fix of the day.
- “Income-Poor” Sidewalkers are the mainstream populous and reflect the lower to middle class. These Sidewalkers work for modest salaries and possess all the toys to show for it, but have little savings and no retirement plan.
- A life on the Sidewalk naturally pulls you to poorness. Because the Sidewalk is about the short term, it never works for the long term. Your future becomes a mortgage for a pleasant present.
- Unfortunately, any bump in the road causes the loans of the Sidewalk to be called in: a recession, a job loss, an interest rate hike, a mortgage reset. Living on the Sidewalk can literally end in living on the sidewalk
A Sidewalker’s wealth equation is determined by income plus debt, determined by available credit.
Wealth = Income + Debt
The Slowlane arrogantly assumes that you will live forever and, of course, be gainfully employed forever. Unfortunately, wheelchairs don’t fit in the trunks of Lamborghinis
- While the Sidewalk is a chronic lifestyle that mortgages the future for a pleasurable today, the Slowlane is the antithesis: a sacrifice of today in the hopes of a brighter and freer tomorrow.
- As a Slowlane traveler, you’re deluged with a series of doctrines that plead discipline to the trade-off. Get a job and waste five days a week toiling at the office. Bag lunch and stop drinking $10 coffee.
- Faithfully entrust 10% of your paycheck to the stock market and your 401(k). Quit dreaming about that sports car in the window because you can’t buy it! Delay gratification until you’re 65 years old. Save, save, save because compound interest is powerful: $10,000 invested today will be with 10 gazillion in 50 years!
“You can either live rich young or live rich old while risking death along the way. The choice is yours and it shouldn’t be a contest. Rich at 25 years old beats the snot out of rich at 65 years old.”
The Slowlane strategy is rooted in Uncontrollable Limited Leverage, or ULL (pronounced “yule”).
- Uncontrollable Limited Leverage is the disturbing evidence that proves the Slowlane’s futility. How do you get rich in the Slowlane? You get a great-paying job, save money, live frugal, invest in the stock market, and repeat for 50 years. If you mine this strategy into its mathematical constructs, you’ll find that the variables that define the plan cannot be controlled nor leveraged.
Time has no leverage.
- Your time is limited to 24 hours of exchange. If you earn $200/hour, you can’t miraculously demand to work 400 hours in one day. If you earn $50,000/year, you can’t miraculously demand to work 400 years in your life. Time has no leverage.
The Slowlane’s Traitorous Relationship with Time
- Compound interest and a job have the same disease: the sinful and gluttonous consumption of your time while forsaking control. Both variables within the Slowlane wealth equation are anchored by time-time traded in a job and time traded in market investments.
- Time becomes the lynchpin for wealth that congenitally ties to the mathematical handicaps of mortality: 24 hours in a day and a 50-year work-life expectancy. Yes, “getting rich” is a function of time. Unless you plan on living forever, this relationship is dubiously foolhardy. Why? Because to trade your time away is to trade your wealth away.
Examine these pathetically common examples. Assume a 5% savings rate on gross salary and an annual investment yield of 8% per year. We’ll exclude taxes and inflation.
- Salary @ $25,000/yr, save $1,250/year, invested over 40 yrs @ 8% = $362,895
- Salary @ $50,000/yr, save $2,500/year, invested over 40 yrs @ 8% = $725,791
- Salary @ $75,000/yr, save $3,750/year, invested over 40 yrs @ 8% = $1,088,686
- Salary @ $100,000/yr, save $5,000/year, invested over 40 yrs @ 8% = $1,451,581
- Salary @ $150,000/yr, save $7,500/year, invested over 40 yrs @ 8% = $2,177,132
“Don’t get enamored with the numbers. Keep in mind this is 40 YEARS from now. If you are 20 years old, you will be 60 years old. If you are 30 years old, you will be 70 years old. If you are 40 years old, you’ll be dead. Sorry, but that’s beyond life expectancy.
So at these ages, does this money and the freedom it buys sound appealing? Also, do you realize that this money will have 50% of today’s buying power? Forty years ago you could buy a car for $3,000 and a loaf of bread for 20 cents. Lest we not forget the other lofty assumptions, gainful employment and a robust economy that behests a safe 8% per year. In 2008 the markets lost 50%
Every day, people sacrifice their time for tiny nuggets of wealth, where time is the liability and not the asset. Anything that steals time and doesn’t have the power to free time is a liability.
Resistance is Futile
A Slowlaner will try to manipulate his weak mathematical universe by trying to make the variables malleable.
- Manipulate intrinsic value by increasing hours worked. (I need to make more money!)
- Manipulate intrinsic value by changing jobs or adding jobs. (I need to get paid more!)
- Manipulate intrinsic value by going back to school. (I need a better career!)
- Manipulate compound interest by seeking better investment yields.(I need better investments!)
- Manipulate compound interest by expanding investment time horizon. (I need more time!)
- Manipulate compound interest by increasing the investment. (I need to save more!)
There was a time when a fool and his money were soon parted, but now it happens to everybody.~ Adlai Stevenson
- The Fastlane is a business and lifestyle strategy characterized by Controllable Unlimited Leverage (CUL), hence creating an optimal environment for rapid wealth creation and extraordinary lifestyles. Definitively, pay attention to these four segments:
1) Controllable Unlimited Leverage (CUL)
Whereas the Slowlane is defined by uncontrollable variables with no leverage, the Fastlane exploits the opposite conditions: maximum control and leverage.
Your own business, self-employment, and entrepreneurship are centrist to the Fastlane, much like a job is to the Slowlane.
The Fastlane is a lifestyle choice: a commitment of blended beliefs, processes, and actions.
4) Rapid Wealth Creation”
The Fastlane is about creating large sums of wealth rapidly and beyond the confines of middle class.
The Fastlane Is a Business System: The Slowlane Is a Job.
- A Fastlane business is the key to the Fastlane wealth equation (Wealth = Profit+ Asset Value) because it unlocks LEVERAGE, a new set of wealth variables that are unlimited and controllable, whereas in the Slowlane, they are limited and uncontrollable. Yes, ULL is swapped for CUL.
In a gold rush, don’t dig for gold, sell shovels.
The Law of Effection: The Fastlane Primer
- The Law of Effection states that the more lives you affect in an entity you control, in scale and/or magnitude, the richer you will become. The shortened, sanitized version is simply: Affect millions and make millions.
- The Law of Effection says to make millions you must impact millions. How can you impact millions? In the Slowlane you explode intrinsic value, become enormously indispensable, and earn millions. In the Fastlane, you engineer a business that touches millions of lives in scale, or many lives of magnitude. If your road doesn’t lead through Effection’s neighborhood or have an off-ramp onto it, sorry, you’re on the wrong road.
“Until we see what we are, we cannot take steps to become what we should be.”~Charlotte P. Gilman
To light the Law of Effection and illuminate your Fastlane road, cross-examine it against the Five Fastlane Commandments (NECST, pronounced “next”).
- The Commandment of Need
- The Commandment of Entry
- The Commandment of Control
- The Commandment of Scale
- The Commandment of Time
The CENTS Business Commandments is a methodology used for testing the veracity of your business idea or opportunity from an Fastlane entrepreneurial perspective.
The Commandment of Control (Cents)
The Commandment of Control requires that your entire operation, from product development, to marketing, to distribution, to other operational components, be within your sphere of influence, or diversified from influence. It’s owning what you build, effectively giving you black-swan insurance. It’s immunity against catastrophic events that can derail your gig overnight.
The Commandment of Entry (cEnts)
The Commandment of Entry identifies poor opportunities and crowded markets that should be avoided. The Entry Commandment also gives insight into where real opportunities hide. By definition, the Commandment of Entry states: As entry barriers to any business or start-up process weaken or become “easified,” so does the strength or the potential of the opportunity.
The Commandment of Need (ceNts)
The Commandment of Need states that if you own a controlled and entry-barred enterprise that provides relative value, satisfying needs or wants, you will win growth, profits, and possibly, passive income for life.
The Commandment of Time (cenTs)
The Commandment of Time has two components. The first is physicality, where your value must exist in space-time separate from you. My books exist regardless of my existence. On the other hand, if you consult for a living, your income stops when you stop. There is no physicality.
The second is detachment.
Eventually, in your enterprise’s evolution, you must detach from its physicality, effectively freeing your time and life. When this is accomplished, it puts you “on the clock” 24/7, giving you the ability to earn perpetually THROUGH time versus IN time.
Our plans miscarry because they have no aim. When a man does not know what harbor he is making for, no wind is the right wind.~ Seneca
The Three Fastlane Interstates
The Three I’s possess the fastest upper-speed limits and meet, or can meet, all five Fastlane commandments. The three Interstates are:
- Intentional Iteration
Each interstate road is an umbrella for dozens of other roads. Put all three together and you have hundreds of roads available for your travel.
All the best in your quest to get better. Don’t Settle: Live with Passion.