The Millionaire Fastlane – MJ DeMarco

This post contains affiliate links that help supports this blog and cost you the exact same. If you do not wish to use affiliate links, then feel free to google the product.

I thoroughly enjoyed the principles and thought he shared some insightful, easy-to-follow frameworks. However, the way he told the story was not my favorite.

Regardless of my enjoyment while reading, I m very thankful I read the book and learned. I now have new frameworks that I will be adopting immediately. So please enjoy this overview of MJ’s book.

Roadmaps

MJ tells his story of creating wealth through the analogy of traveling on different roads; there is the Sidewalk, the Slowlane, and the Fastlane.

• Sidewalk: The Sidewalk is living paycheque to paycheque, where the only hope to get ahead and retire is on luck or someone else’s dime. If you are on the Sidewalk, you are “waiting” to win the lottery, get a retirement settlement, or inherit money from a will. People on the sidewalk are one accident or event away from broke; living here takes away your security and, consequently, freedom.
• Slowlane: The slowlane is the American dream. It is the standard way to wealth and retirement. On the slowlane, you can have freedom and security, but it is painfully slow. You will be old by the time you can enjoy the fruits of your labor. The path on the slow lane is as follows: go-to college, get a good job, save 10% per paycheck, keep expenses low, invest and hope for an 8% compound interest return, and when you are 65-70 years old, hope you have enough money to retire.
• Fastlane: This is where you can get rich fairly quickly, but it is not easy! The people that are multi-millionaires didn’t get there by skipping the lattes and saving their pennies. They got there by creating either massive value to a few or creating value to the masses. If you want the security and freedom that comes with wealth you can create it if you follow the majority of the five commandments below. It isn’t easy, but it can be quick (5-10 years).

Money trees

He addresses and rebuts the age-old saying that “money doesn’t grow on trees” with the thought that money does, in fact, grow on trees if you plant money trees. Money trees are business systems that you water and fertilize, and then they can grow on their own and create wealth. These trees can be categorized as follows:

1. Rental System: A rental system is where you own something and charge for its use. Examples are real estate or even music or photography licensing.
2. Distribution System: A distribution system is a medium that brings together the producer and the client. Examples are Etsy and Amazon.
3. Software System: Software is a fantastic money tree if you have capital and expertise. Once a product is designed and made, it is easy to reproduce and virtually free to distribute. For example, it does not cost Microsoft any more money if one person buys windows or 1000 (other than support which is pennies on the dollar for good software).
4. Content System: The content system is one of the largest on the rise with Instagram, Youtube, and Online courses.

Law of effection

The more value you provide to the world, the more wealth you can create for yourself. The law of effection is the magnitude of the value you deliver multiplied by the number of people you can serve. MJ describes it as follows:

Net Profit = Units Sold (scale) X Unit Profit (magnitude)

If you want to generate wealth (aka Net Profit), you can either serve many people (scale) or serve just a few with massive amounts of value (magnitude). Examples of this would be:

• Create a Youtube channel that helps millions of people improve their cooking (scale)
• Build a rocket ship that launches satellites into orbit (magnitude)

Note by Brandon (not from the book): 

Of course, to get the same amount of net profit, you can adjust your scale or magnitude to suit your personality and goals. This is the concept of a niche, you can serve 50,000 people a lot of value and have the same outcome.

The Five Commandments

MJ said it best with his five commandments. Follow the majority of these and your business will have the best possibility for success.

1. The commandment of need: Businesses satisfy the needs of people. Don’t chase money. Instead, look at how your business will help other people.
2. The commandment of entry: As entry barriers to a business fall, or lessen, the effectiveness of that road declines while competition in that field subsequently strengthens. To overcome weak entry, you need exceptionalism.
3. The commandment of control: Play in an organization that you control or will be at the mercy of someone else.
4. The commandment of scale: Increase scale and magnitude in your business. Only play a game where you can hit a home run. If home runs aren’t allowed, you are playing the wrong game.
5. The commandment of time: Your business should detach you from your time.