Book review: The Millionaire Fastlane by MJ DeMarco

“The Millionaire Fastlane” by MJ Demarco is one of the best books I’ve read this year.

The premise of the book is that most of us are taught to achieve wealth in an horrifyingly slow way. Get an education, work 40 hours / week, set aside most of your wealth and live miserly for 40 years, and hope that the people at your mutual or index fund manage it competently enough that you can retire wealthy in four or so decades, when you’re too old to enjoy it.

The first third of the book is dedicated to bashing what the author calls “the sidewalk to riches” and “the slowlane,” as well as elaborating on the strategies and attitudes corresponding to those who use the get-rich-slowly plan as well as the habits and attitudes of those who will never get rich.

The primary argument made by the author is that all wealth is attached to some equation. The sidewalker, the person who takes out credit to buy consumer goods and tries to spend more than he earns, is attached to an equation that results in a 0. The slowlaner trades his time for money by working for someone else, and relies on the compound interest of the stock market (3%-7%/year) to increase his assets. The flaw with this is that the % returns is largely uncontrollable, and there is even a risk of losing money when the stock market crashes, and that it cannot be leveraged, since the worker must always spend more time to generate money. The closest thing the slowlaner can get to leverage is to collect certifications and degrees that allow him to trade his time for slightly more money.

The person who attaches himself to a fastlane equation seeks to solve both problems by investing time and resources into producing passive income. The author who writes a book that then sells 10,000 copies, the creator of an online web-application that provides a service to a potentially unlimited number of customers, and the owner of a restaurant chain are all practicing various forms of the fastlane equation. You can control the product. You can automate the system and hire other people to run it for you. You can scale it indefinitely. You can uncouple your time from the production of wealth, leaving you free to retire, spend your time building more money-generating systems, or sell the rights to your existing money-making system for a large sum of cash.

MJ DeMarco goes into great detail about the fastlane, about different systems that can be leveraged to produce enormous wealth and gives useful criteria for judging those systems, the main things being whether it can be scalable and whether it can be uncoupled from your time. This reminds me very much of “the E myth revisited” which I also highly recommend.

Get the book here