Wealth is a process, not an event – MJ DeMarco
Today, I want to share with you all that I learned from “The Millionaire Fastlane”, a book that promises to help you create wealth, but not in the traditional way. This book was written by MJ DeMarco, an entrepreneur who created multiple successful businesses and went from nothing to millionaire. He shares a philosophy where he tries to teach that you can be a nobody and still create an “asymmetrical growing business”. If this sounds interesting, keep reading.
I’m a nobody. And that’s important—because you can be a “nobody” too—a nobody who lives like a king – MJ DeMarco
Lesson 1 – The Slowlane, The Sidewalk, and The Fastlane
If you have grown up in a conservative family like mine, where there has never been too much money around, you have probably heard advice like: “You need to save money”, “Don’t waste too much”, “Buy real estate”, “Get a stable job and don’t let it go” and many other things like that. And although I don’t think all of this advice is necessarily wrong, there is something that MJ DeMarco tries to tell us that is true.
In the book, we are presented with the idea that wealth is not built through events but through a process that we need to endure. This process can be described as a “road trip” that we all drive, either consciously or not.
The Slowlane
This map is the one that most of us follow. Trying to find a stable job, working hard to climb the corporate ladder, and saving every penny we can to hopefully someday live the life that we truly want.
I don’t know how you feel when I talk about this, but personally, this is not a plan that resonates with me, nor with MJ. We can summarize his opinion and destroy this perspective with only one phrase from the book:
Unfortunately, wheelchairs don’t fit in the trunks of Lamborghinis – Page 67
The Sidewalk
This is probably the saddest of all plans. MJ DeMarco tells us that there are people who feel incapable of playing the money game, so they decide to step aside and live a life pretending to be someone they are not. Buying expensive things out of their budget, making poor decisions, and waiting for a spectacular event to happen to make them rich and full of purpose. Like winning the lottery or all of a sudden inventing something amazing that changes the world.
The Fastlane
Forget about funds, playing it safe, working 9 – 5, waiting for an exceptional event, or saving for the rest of your life, hoping someday to be happy. MJ proposes a third way, a way that can make us rich young.
The author affirms throughout the book that he spent many years trying to understand how there are people in their 20s or 30s who are rich. For sure, they didn’t do it through index funds or investing in mutual funds. So how?
He concluded that they have found a way to create asymmetrical growing ventures, capable of producing gigantic amounts of money per month, that normally at the end conclude in a “Liquidation-Event” (converting all their physical assets and the company itself into money).
But how can this be achieved? Keep reading…
Lesson 2 – Create, Refine, and Systematize the Steps to Wealth
How to be rich? That’s the question that most of us are asking right now. MJ DeMarco seems to have an answer. The steps that we need to follow to be rich are described around chapter 17, and I’ve summarized them as follows:
- Create or Solve
- Sell it
- Earn enough to quit
- Quit
- Repeat and enjoy
Probably most of the juice is in the create or solve. But what does it mean? This means that we need to find a problem that needs a solution, a complex and repetitive problem.
The Virgin Ideas Are Absurd
When we are looking for something to invent, it is really complex to come up with an original idea, and probably if you are something like me, you have found yourself amazed with an invention that you could bring to life, only to figure out a couple of minutes later that it already exists.
That’s why, when I read this phrase, I was happily surprised:
They seek virgin ideas, perfect and new, ones that would be unveiled to the world in grandiose events. Rarely does that happen – Page 248
The author tries to tell us something that hides right in front of us: millionaire ideas surround us all the time. The light bulb, first created in 1879, used to be expensive, energetically inefficient, and hard to produce. Now we have light bulbs that produce less heat, are more efficient, can change their color, are easier to produce, and are cheaper. That’s the heart of capitalism!!! We need to seek out those things that bother us and try to think of ways to make them better, even if there is already another solution.
Compete with an Advantage
Have you ever called a service and thought, “Wow, I’m never calling again”? That has happened to me many times. Wouldn’t it be great if the services we know and enjoy could give us better customer service? Ding ding ding, there you go. That’s something you can use to your advantage.
The book is telling us that even the smallest thing, well done, can be a big opportunity, and it’s even better if the customer doesn’t expect it. So look for things that your competition is forgetting and could be better executed.
Execute Fast and Learn from Your Customers
Finally, don’t waste too much time thinking about the perfect execution. Go, do it, and get feedback from your customers. They’ll teach you the next steps ahead. That’s what I did with my coffee shop, and I’m surprised how far away I was from perfection.
Passive Income is the Key
We already know that we need a plan, that the escape from the rat race is not through funds or savings, that we need to create something, but what? I like the analogy the book has chosen. We need a tree. A money tree. There are not many places where they can grow, and they require a substantial amount of care and effort. The places where they can grow are:
- Rental Systems -> Anything that you can lend and get paid for
- Computer Systems -> Any software that can make money by itself
- Content Systems -> Anything that distributes information e.g. TikTok, A book, Instagram
- Distribution Systems -> Any means that helps to distribute something
- Human Resource Systems -> A crowd of people working together to fulfill a necessity
It has to be one of these because these are the only kinds of systems that “easily” can make money on their own, even if you are in bed resting.
Once You Have Your Tree, Save the Seeds
Once the tree is healthy and growing, we need to take care of it. And like any good farmer, we will reap what we sow and prepare for the next season.
What I’m trying to explain is that it’s important that once the system is up and running, we need to take advantage of the money it is producing and use it to produce passive income. This applies once you reach the point where your system itself is producing a good amount of money, because remember, you won’t be rich from an index fund. This is only a way to take advantage of the money that you are not spending.
If Everyone Is Doing It, It’s Not Worth It
I failed at network marketing four times because subconsciously, I possessed the truth: The road violated the Commandment of Entry – Page 214
The commandment of entry is simple: if everyone is doing it, it’s not worth it. Think about it for a second: is everyone rich? No, most of us are poor, so if there is something easy and accessible out there, why are most of us poor? It’s because there is no such thing. This reminds me of when crypto mining exploded. I was mining, my friends were mining, an uncle of mine was mining. And you know what? Most of them are still poor.
If everyone is doing it, it’s a bad omen. Get the hell out of there.
Get Your Free Number
The book takes a while to get here, around chapter 37, is where it introduces the free number. This is a common concept among most entrepreneurs, which is basically how much money you need to quit your job and live the life you deserve.
The steps to get your free number are:
- Define the lifestyle: What do you want?
- Assess the cost: How much do your dreams cost?
- Make it real: Execute the escape
Assessing the Cost:
Take your cost of living (CL), in my case something around $1200. Yeah, I’m cheap.
Now do CL * 1.60 = 1920. This is the Cost of Living with Taxes (CLT).
If we do (CLT * 12) / 0.5 = $46,080, this is how much money I’m going to need to live just from my savings by putting that into some fund or bond.
Finally, if we do CLT * 5 = $9600, this is the amount of money that our business needs to return per month to keep us alive.
This is better explained in the book on page 255.
My Conclusion
I think “The Millionaire Fastlane” is a great book for those who are just starting in any kind of business. I feel that it spends too much time giving you the mindset you need to succeed. But besides that, the book does a great job of revealing the basics.
In conclusion, if you are just starting, it’s a great place to get perspective. If you are interested, here’s the link The Millionaire Fastlane
The End
If you enjoyed the post or found it interesting, remember that you can help me with a donation. Books are not free
[—————————————] 0% of $60, Let’s buy me a book
Discover more from Coursity
Subscribe to get the latest posts sent to your email.