The Millionaire Fastlane exposes many wealth creation methods taught by so called business gurus as being partial truths. These gurus generally teach long term “Slowlane” strategies, such as saving and compounding over long periods of time. The author M.J. Demarco describes these teachings as “fast lanes” for the guru but not for the guru’s student. The guru touts a method of getting rich and while technically it can work, it’s a long term strategy, often involving compounding over 40 plus years. However, the guru makes huge money by selling books, courses etc. teaching their method. All ethics and morals aside, the guru is in the “fast lane” to wealth.
The guru doesn’t explain that even though compounding can make you a millionaire; in 40 or so years, by then the buying power of the dollar will most likely be massively diminished, so being a millionaire may be a far cry from the status of a millionaire today. Also, saving money for this length of time, while you are young and only getting to enjoy it after retirement and maybe even dying before you get to enjoy it, is one of the unfortunate risks slow laners need to take. So, what exactly is the fast lane and slow lane? Demarco describes three groups of people; Sidewalkers, Slowlaners and Fastlaners.
Sidewalkers:
- Are one step or problem away from being broke; getting fired from a job, having a health issue etc.
- Change jobs frequently – usually for small pay raises
- Have no savings – live paycheque to paycheque
- Seek instant gratification – spend all their wages on the latest and greatest gadgets, cars, phones, clothes etc.
- Some have huge income like professional athletes/entertainers – but no financial intelligence to maintain/grow this income into old age
- Trade time for money – if they are not working, they are not making money and will wait in line/waste time for small discounts and freebies, instead of realizing time is our most valuable asset
- Make up the majority of the population
Slowlaners:
- Hopefully on a path to wealth by saving and investing using strategies like compounding etc.
- Have mutual funds, 401ks, etc.
- Often good jobs like doctors etc.
- Sacrifice time for money
Slowlaners work hard and save money for long term investments that will hopefully pay off. Unfortunately, if that time arrives, they may be too old to enjoy it. They have been conditioned to; study in school, get a job, save about 10% of their income and invest it at around 7% annual return until they retire in 40-50 years. They are effectively selling their time until they have no time left.
“They forsake their youth for the promise of elderly wealth or, wealth in a wheelchair; afterall, $100 invested a month in the stock market for 40 years will be worth $2.5 million by the time you’re 70!”
This is better than the sidewalk and in my opinion more suitable for a lot of people that the fastlane. However, many factors might affect their wealth are including;
- They might not reach retirement
- Markets or investments might crash
- Inflation might mean that the money they have gained through investments as little to no extra buying power than the money they initially saved
Slowlaners have given up control of their financial freedom and have traded time for money. Time for money can’t be scaled very much; there are only so many hours in a day.
Fastlane
“Business and Lifestyle strategy characterized by controllable unlimited leverage, hence creating an optimal environment for rapid wealth creation and extraordinary lifestyles”.Creating massive wealth quickly”.
It is the real get rich quick; hard and smart work is needed in the beginning but creates massive leverage. They create assets such as; websites, books, podcasts, albums, apps, online courses, innovative products etc. that will pay them for years to come regardless of weather they are still working on these assets or not.
Fastlaners:
- Create lifetime passive income
- Spend time once in making a system that reaps financial rewards for years.
- Seek controllable unlimited leverage Vs slow lane = little control over time and income
- Have a business instead of a Job
- Value lifestyle over work and create systems to allow for a lifestyle of freedom
- Seek rapid wealth creation
- Realize the more value they provide the richer they will become.
- First get criticised by people in the slow lane and sidewalk. For example; they will hear things like; get a real job, you should do this/do that, you’re weird, insane etc. and will later hear things like; he/she was lucky, were in the right place at the right time, etc.
Fastlaners live by Five Commandments – NEST:
Need – Never start a business just to create money. Stop Chasing money and start chasing NEEDS. 95% of businesses fail because they get this wrong. Chase needs, problems, pain points etc. instead of money/relying only on a “do what you love” mentality and hope to get rich. If “Do what you love” is to work; what you love must solve a need and you must be exceptional at it. Fill a demand instead of trying to create one. What can you provide for people, not what can they provide for you. In general, people don’t care about you, they care about what you can do for them. Some golden markets include Health, Wealth, Relationships as they all fill needs.
Entry – Higher entry barriers equate to stronger more powerful roads to wealth and less competition. It also means there is less need for being awesome (less competition to beat).
“The world is littered with so-called businesses that have no entry barriers. And that is why they suck and the people who follow them aren’t rich”
People who create these low entry barrier businesses get rich e.g. MLM, dropshipping etc. the creators of the business get rich and the followers usually don’t, or best case scenario make good money, but have no control over what happens with the company.
Control – Fast lane drivers control everything in their business. They sell products instead of buying, collect rent instead of paying it, offer programs instead of joining them. They are producers instead of consumers. People can become rich while not having control but they are not real fastlaners; they are “hitchhikers” and are relying on other companies or people for wealth and don’t have control over what they do. Fastlaners control their lifestyle, business and wealth. They are self employed entrepreneurs.
Scale – Not limited to one area or customer base e.g. restaurant in local town. They can scale their product or service to a large audience. The internet solves this very well.
Time – Fastlaners detach their business from their time and don’t need to always be working to make money. For example; creating a video course instead of having to give classes, creating software that solves a need instead of manually solving the need. They free themselves from their business and make money 24 hours a day.
The Mindset of a Fastlaner:
- Debt is only used as a way to grow your system
- Time is your most valuable asset (more important than money)
- Knowledge is power – you should always be learning and using what is learned to grow your wealth Vs Slowlane mentality – after you finish college, you finish learning.
- Money is everywhere and abundant and the amount of money you make is a reflection of how many lives you’ve touched
- Primary income sources are systems and investments (they may use investment techniques similar to slowlaners, but instead of compounding over a long period of time, they have large capital to invest early and reap rewards of methods such as compounding by getting an early start.
- The more you help, the richer you become in personal fulfillment, money and time
- It’s riskier to trade 40 years of your life in the hopes that you’ll have plenty of money to enjoy when you’re 70 than to risk failure while you are young in the hopes of becoming rich.
The Millionaire Fastlane is a fantastic book, that cuts through all of the nonsense and gets right to the point. Click Here To read or listen to the Audiobook, check it out on Amazon
