The Best Book I’ve Ever Read About Making Money
#AJsBookClub
First, let me welcome you all to the first installment of #AJsBookClub! This is a segment of the blog where I will go through some of my recent and favorite reads, review some of the key highlights and take aways. These are all books that I have personally read and will include some topics that really resonated with me and where I am currently in my life.
Intro
This is hands down the best book I have read to date on wealth creation and the simplified view of how to get there. MJ Demarco’s “The Millionaire Fastlane”, outlines the three different “roadmaps” we can take in our financial journey and some of the biggest traps we fall in to along the way. One of the biggest takeaways from this book is that wealth & financial freedom is not an event, it’s a process. When we hear people talk about “Get Rich Quick”, that is a reality that is possible; assuming quick is ~10 years or so. You have to build the right systems and what MJ refers to as “money trees” to support scaleable growth to reach those monetary goals. “Get Rich Quick” is not the phrase you need to look out for, it’s “Get Rich Easy” where the fake gurus catch people. If you want success quickly, you can absolutely get there, but you will have to work hard for it.
There is a tremendous amount of information in this book and I won’t go in to all of it here. I HIGHLY recommend if anything in this post interests you, that you buy this book for yourself. I will recap a few other key highlights that really stuck out to me:
Wealth 3 Roadmaps & the simple math behind them
Law of Effection
Fastlane Commandments
The 3 Roadmaps of Life
The Sidewalk
The Slowlane
The Fastlane
The Sidewalker
MJ Demarco starts this section off by describing a Sidewalker as someone who’s “financial destination doesn’t exist. That plan is to have no plan.” These are the people who are trapped in “Lifestyle Servitude.” They live with an insatiable need for the newest hottest trend in technology, fashion, cars, and other luxuries. Because of this there are usually one small hiccup in life from being bankrupt or homeless.
Live for today, the hell with tomorrow.
We often hear the term “$30k millionaire” used to describe this group. It is more important to look financially well off than it is to be so. The line from Kanye West’s “All Falls Down” came to mind when I read this section. “I got a problem with spendin’ before I get it” is pretty much the sidewalker’s mantra.
In each section MJ Demarco outlines a few mindsets and outlines how each lane in the roadmap views them. This group is the individual who has no plan for tomorrow and immediately purchases everything they desire because credit cards, duh. If anything goes wrong, though, it is never their fault. Always the victim and no responsibility is taken for lack of preparation.
MJ points out that Sidewalkers aren’t to be confused with individuals who make smaller sized salaries. Quite the contrary. Many sidewalkers would be considered middle or even upper class. It’s not an income problem, financial management & responsibility is.
Unfortunately this is the most common path, Demarco notes. There are some pretty staggering statistics listed with regards to individual net worths and how much of America actually lives with a zero or negative net worth. Meaning that if you were to die your family would end with no money or possibly even OWE money.
Wealth on this roadmap is defined as:
WEALTH = INCOME + DEBT
While this is a pretty depressing way to start, there are still other options. Let’s go look at the next exit on this roadmap
The Slowlane
The book’s introduction actually starts off with a pretty good summary here. One that really hit home for me:
“It’s financial mediocrity known as “Get Rich Slow”…The tedium sounds like this:
‘Go to College, get good grades, graduate, get a good job, save 10% of your paycheck, invest in the stock market, preferably in a low cost indexed-fund, max your 401(k), slash your credit cards, and clip coupons…then, someday, when you are, oh,65 years old, you will be rich’”
Well, fuck me.
This makes the “About This Site” section on my home page sound like I almost plagiarized this word for word. This is when “The Millionaire Fastlane” really got my attention and the math started to hit me even more.
The slowlane is postulated as the “safe route”. trade your time for money and hopefully one day you will have everything you need to be able to retire by the time you’re 65. Maybe a little later. And maybe you have enough money, but if not, maybe the government will take care of you and put you in a shit hole nursing home where you get to waste your days away.
Ok, so some of these words are more mine than what’s in the book, because it really hit home and hit a nerve because it completely highlighted the way I feel about my own life and some of the arguments I have with older generations. I truly believe that this mentality it fundamentally flawed.
So let’s go look at the math part. This is not the exact equation he uses in this section, but I’m going to use it to better show the parallels between the slowlane & the fastlane:
Wealth = Magnitude * Scale
Here, Magnitude is how much you earn, we’ll say per hour. It’s your intrinsic value as an employee.As slowlaners we often say, “I need to improve my intrinsic value, I need to go back to school and get a new degree!”, or maybe “I don’t get paid enough here, I need to look for a new job where someone really values me”. What do these actions do? They raise our intrinsic value (magnitude). Woohoo! The problem here, though, is that value is still determined by someone else. Not how hard we work or any systems we put in place. It is solely based off of a value that we have limited to no control over and something that very much has a cap to it.
Well, ok, I’m sure scale will make up for this and I’ll be fine!
No.
Scale is the number of those hours that you can work in a day, month, year, etc. Obviously here you are limited by the number of time buckets that exist, plus what the human body can handle. Again, you are limited in this factor as well.
I’m sure some are saying, well I have my investments and I make my money that way so it’s all good. I can scale. John Bogle said this is what to do. Look at Warren Buffet!
Yes, MJ Demarco does talk about investments, but in reality most people start their investing in their 20s or 30s. So if the S&P 500 really works in your favor you’ll have a semi-decent nest egg by the time you turn 70. The compounding interest that made Warren Buffett a Billionaire started because he began investing 20+ years before most people even know what the market is.
This section of the book is not to say that this isn’t an option. it is, but you have to realize time is working against you. By the time you have earned your money, does it matter if it’s too late to enjoy it?
What MJ Demarco says is that the slowlane way of life isn’t bad, as long as it’s PART of the plan and not the enitre plan.
The Fastlane!
The fastlane isn’t something that happens over night. Fastlane is more like the 10 year lane. Which is still better than the 30-40 year slowlane roadmap. Ok, but how does one get there?
As mentioned before, many people think of wealth as an event. Hitting the lottery or inheriting millions. Realistically, though, it is a process. It’s a system that can be created to be scaleable and last through time with little to sometimes no intervention. Many people would consider this to be a passive income stream. Let’s just be clear that passive doesn’t mean no work. It means significant time, work, and dedication on the front end, so that you can reap the benefits on the back end.
The fastlane is built off the idea of no longer being a consumer, but starting to be a producer. Someone who creates things that another consumes. You must leverage the “Law of Effection.” To make millions you need to effect millions.
In the fastlane you look for different ways to create wealth by helping & effecting others. You are no longer limited by what someone else values your time at or the number of hours in the day. You create systems that can bring you large magnitude, large scale, or both!
Let’s look at the math again
Wealth = Magnitude * Scale
When our magnitude and scale are no longer limited by someone else, wealth explodes. You see the urgency in this and value your time more than your money and put all your efforts in to creating these systems. You look for business opportunities that allow you to have unbounded scale.
MJ Demarco goes in to great detail on the different ways to find & build a business. I won’t rehash the whole book for you, but I will highlight one last thing. His 5 fastlane commandments. They outline the things to look out for when starting a wealth building business. If you can’t meet most if not all of these criteria then it’s not a fastlane business. He recommends waiting until you have the time and financial freedom from a fastlane business, then come back to these “passion projects” later.
The 5 commandments: CENTS framework
The Commandment of Control
The Commandment of Entry
The Commandment of Need
The Commandment of Time
The Commandment of Scale
Summary
Admittedly, I did enjoy “The Millionaire Fastlane” as it was some level of validation for the things I’ve been feeling for awhile. Even outside of being a bit of an echo chamber for my own thoughts, it still opened my eyes to not only the WHAT, but the HOW to achieve wealth.
I could probably talk about this book for days, but you shouldn’t hear it from me. “The Millionaire Fastlane” is one I HIGHLY recommend for anyone who is looking for that offramp to the next roadmap!
Resources
Check out “The Millionaire Fastlane” on amazon & seriously consider picking it up. This is going to be a hard one to beat as my favorite book
If you like books like this, be sure to check out the Facebook group #AJsBookClub. We’re a growing community of like minded people who enjoy sharing & discussing what I call “success focused” books. Discussions on this book and others only happen over in the group.
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