Author: MJ DeMarco
Rating: 4/5
Notable Quotes:
Ask not what your country can do for you but what can you do for your country – John F Kennedy
Effect millions and make millions. – MJ DeMarco
Until we see what we are we cannot take steps to become what we should be – Charlotte P Gilman
If everything seems under control, you are just not going fast enough. – Mario Andretti
Your choices are made in a moment but they will transcend a lifetime – MJ DeMarco
Many people want to change their life, but they are not willing to change their choices, and ultimately this changes nothing. – MJ DeMarco
Summary (less than 100 words):
This book outlines the mindset, habits and techniques for making the choices that will help you build and enjoy wealth. MJ talks of three categories: the sidewalk (no finical plan), the slow lane and the fast lane. People in the slow lane have a financial plan but they trade their time for money and have a “get a degree, work a good job and retire 40 years later” mindset. People in the fast lane aim to retire young and enjoy their wealth. To do this they focus on creating short term wealth though passive income and producing instead of consuming. MJ focuses on the building of a fastlane.
Interesting things you learnt:
- True wealth comes from 3 things: 3 Fundamental Fs. family (relationships), fitness (health) and freedom (choice). This makes up the wealth trinity.
- Wealth requires responsibility, followed by accountability.
- Have a multi-dimensional attack strategy. Play chess not checkers. Your chess pieces represent: The King: Your execution, The Queen: Your marketing, The bishop: Your customer service, The Knight: Your product, The Rook: Your people, The Pawn: Your ideas. All parts are important together.
- SUPER CHARGE your wealth plan: F.A.S.T.L.A.N.E. S.U.P.E.R. C.H.A.R.G.E.R. (This is a summary MJ provides at the end of his book which is a great highlight of his teachings.)
F: Formula, wealth is a formula that forms a lifestyle. Wealth is a process not an event.
A: Admit, admit that the preordain path to wealth “get rich slow” is fundamentally flawed because of uncontrolled limited leverage. Admit that get rich quick is not a myth, admit that no plan is not a good plan.
S: Stop and swap, Stop following the wrong road maps, stop doing what you have been doing, stop trading your time away for free weekends. Swap ineffective road maps for the fast lane road map. Swap allegiances from producer to consumer.
T: Time, Time is the king asset of the fast lane. Invest in activities that will grant you free time. Avoid time thieves that transforms parasitic debt that transforms free time into indentured time. Invest into a business that can turn indentured time into free time. MAKE TIME THE KEY DECISION FACTOR.
L: Leverage, Leverage controlled and unlimited mathematics to create wealth. There is no leverage in the slow lane wealth equation (depends on your pay and hours you work). Control the math that generates your wealth.
A: Assets and Income, Wealth is created by exploding income and a business that can be systemised and sold in a liquidation event. Live below your means but seek to expand your means by focusing on the income while simultaneously focusing on controlling your expenses. Exponential growth of income and asset value not slashing your expenses creates millionaires.
N: Number, What’s your number? How much money will you need to live the lifestyle of your choosing. Start saving your loose change, open an investment account. Make your dreams real, find pictures and create motivation. Make your visions real.
E: Effection, Grace effection and you will be graced with wealth. The law of effection states that the more people’s lives you effect in an environment you control the more money you will make. Impact millions and you will make millions.
S: Steer, Life’s steering wheel is choice, at some point you must commit to the fast lane ideology. That commitment forms your process. Wealth is not a choice of event, just like you can’t just choose to loose 40kgs and wake up 40kgs lighter. How you steer determines if the fast lane is a lifestyle or a hobby. Use the weighted average decision matrix. Decision horsepower is strongest in your youth and bleeds with age, examine your past choices. Why are you where you are? What has been treasonous to your life and why are you drowning in debt. If you don’t rectify the mistakes of your past choices, then you will be destined to repeat them. Behaviour change begins with a reflection of your past choices. Become responsible, followed by accountable.
U: Uncouple, officially uncouple from the slow lane wealth equation by creating your business structure in a favourable fast lane entity. A C or S corporation or LLC. There after your entity is the body of surrogate business system, it pays itself first and the government last. It survives time separate from your town. It is your fist step in creating an asset.
P: Passion and purpose, with a business entity and a dollar figure that outlines your dream life you will need a passion and a purpose to fuel you into habitual action. Don’t confuse passion is “Do what you love”, passion burns your soul and drives you to do whatever it takes. Passion revs you with exciting and rages you with discontent, some passions are selfish: “I want a Lambo”, others are selfless: “I want to help orphans”. It doesn’t matter as long as the passion is strong enough to burn a hole in your pants and get you going.
E: Educate, Education begins at graduation. Pledge to never stop learning, what you know now is not enough to become the person you need to be tomorrow. Learn how to build fast lane systems in an environment that you control. Information is the oil on your financial journey. Ensure daily reading in short bursts by leveraging existing blocks of time that are often squandered (while commuting, while exercising, while on a lunch break).
R: Road, get onto a fast lane road but don’t worry if you can’t decide which road to travel. The road can pick you. Train your mind to see needs and problems. Observe your thoughts and language because they expose unmet or poorly met needs.
C: Control, control your financial plan as this refers to the commandment of control. Engage in an organisation that you fully control, from pricing to marketing. Swim as a shark not a guppy.
H: Have, have what others need, and money will flow into your life, this reflects the commandment of need. You can’t explode your income by chasing money. Stop chasing money because it eludes those who try. Instead focus on what attracts money, which is a business that solves needs. Money comes from providing value, cast aside selfishness and seek to have what your fellow man wants. When you do money flows into your life because money is attracted to those who have what others want, desire, crave or need.
A: Automate, automate your business, and honor the commandment of time. Get your time detached from your business. The best passive income money tree seedlings are money systems, rental systems, computer systems, human resource systems… The key to automation in any business lies in these seedlings.
R: Replicate, replicate your system and honor the commandment of scale. Get on a playing field where home runs can be hit. To make millions you must impact millions, to impact millions you must be on a field capable of affecting millions. Can your product, service or process be replicated on a global scale to tap the law of effection?
G: Grow, grow your business by treating it multi-dimensionally, like a game of chess. Build a brand not a business. treat customers like your boss and reposition complaints into opportunities. Listen to the world as they offer the best directional clues. Differentiate yourself from the competition. Get above the noise, focus on one business and one business only (in the beginning).
E: Exit, Have an exit strategy. Full passivity accomplished by a money system is one fast lane destination. Money systems are best funded by liquidation events funded by massive asset values. Know when it’s time to liquidate assets, transforming paper money into real money. Know when it’s time to get off the horse and ride a new one.
R: Retire, Reward or repeat, after liquidating your asset retire or repeat regardless of which reward yourself for milestones met along the journey. First sale, book a nice dinner. Break 10 million dollars? Buy a Lambo. - A quick four step process to work out how much money you need: Step 1: Define the lifestyle and what you want. Write everything down that you want (3 cars, big house, cabin in the mountain) Step 2: Assess the cost. Work out the monthly cost of everything you want (including associated taxes). 3 cars: $2000, House: $5000, Cabin: $1000. Lifestyle cost = $8000 per month. Then calculate and add other expenses such as monthly allowance and other unknowns (Clothes, health insurance, maintenance). Gross Living cost = These other expenses/ allowances ($2000) + lifestyle cost ($8000) =$10000. Next, we can determine the Net living cost: Divide gross living cost by 0.6 (taxes). Net living cost= $10000/0.6 = $16666 per month. Step 3: Set the targets. Set the money system and income targets. Two targets: Business system income target and the money system target. Money system target: (Net Living cost 12)/0.05. Money System Target = (1666612)/0.05 = $3 999 840. Business system target = Gross living cost 5 = $100005=$50000. A business system that generates the target, 40% will go to taxes, 40% goes to fund the money system and the other 20% funds your lifestyle. Step 4: Make it real, fund it and open it. Start looking 3 feet ahead of you. Break it down into small bits and get going.
Owen Venter 