The two kinds of Millionaires

I am halfway through reading this book “The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime” by MJ DeMarco.
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  • THE MILLIONAIRE FASTLANE BY MJ DEMARCO (Watch to the animated book summary here)

I find a lot of similarities between his ideas and those of Robert Kiyosaki (author of Rich Dad Poor Dad). There are quite a few nuggets of wisdom in this book, and I find this book quite entertaining. Although I must say that the font size of the words in the book is rather small. :p

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There is a comment which I find particularly interesting: “You can’t fit a wheelchair into a lamborghini”.
Well, at this moment you might be scratching your head as to what the author meant by this.

At the beginning, the author classified people into 3 groups.
1) The Sidewalk. Typically the road most traveled. Here, the Sidewalker’s financial destination doesn’t exist. The plan is to have no plan. They are more concerned with instant gratification, and they typically spend more than they earn. It doesn’t matter how much they earn, they could be in the low or high-income bracket, but they will forever be trapped in a “Lifestyle Servitude”.
Lifestyle Servitude basically means life is forced into a rat race, a constant tug-of-war between lifestyle extravagances and work, a self-perpetuating merry-go-round of work for income, income for lifestyle, and lifestyle for work. There is simply an erosion of freedom.
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The Slowlane: I think I probably belong to this group. Well, it is one up from the Sidewalkers. Slowlane is the antithesis of Sidewalkers (instead of instant gratification), whereby it is a sacrifice of today in the hopes of a brighter and feer tomorrow.

Basically, the life is to get a job, work 5 days a week toiling at the office, bag a lunch and stop drinking the expensive latte / coffee. Faithfully entrust a percentage of your paycheck to the stock market or your 401K (US version). Quit dreaming about that sports car in the window. Delay gratification until you are 65 years old. Save, save and save because compound interest is powerful. Yes you will become a millionaire, but it takes year, probably by the time you retire (and often you wealth is tied to the performance of the stock market / economy).
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The Fastlane:
The key difference between those in the fastlane and those in the slowlane, is that Slowlane millionaires make millions in 30 years or more, while Fastlane millionaires make millions in 10 years or less.

The Fastlane is a business and lifestyle strategy characterized by Controllable Unlimited Leverage.
The Fastlane is a business system. The Slowlane is a job.

Wealth = Net Profit (Units sold + Unit Profit) + Asset Value (Net Profit + Industry Multiple)
With a business, the above units are controllable unlimited variables.

Net Profit: Simply put what is important is the Law of Effection eg. the more lives you affect in an entity you control, in scale and/or magnitude, the richer you will become.
For example for scale, if you sell 20 million pens – the profit is probably $15 million. There is an impact in scale, but tiny magnitude. Conversely for magnitude, if you have 400 apartments, and rent out for a profit of $100 per unit, you generate $40,000 monthly. You are providing housing for 400 families, and making an impact in magnitude, but not scale.

If you can combine both (scale and magnitude), like Donald Trump, the net profit will be huge.
You become rich fast. Yes and get to enjoy the money while you are reasonably young.

This reminds me of the B and I quadrants in the book “Rich Dad Poor Dad” (basically those who are business owners or investors).
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So back to the phrase “You can’t fit a wheelchair into a lamborghini”.
The author was basically talking about the difference between Slowlane and Fastlane miilionaires. Well, he argued why invest in a plan that consumes 40 years of your life and fails most of the time (due to the volatility of the market and economy) – The Slowlane.

You can probably buy a lamborghini without worries in your 70s or 80s….but what is the joy in that (you can’t even fit your wheelchair in it).

Life is meant to be enjoyed when one is able.

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About apenquotes

Born in 1976. Married with 2 kids (a boy and a girl). A typical Singaporean living in a 4 room HDB flat.
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