Millionaire Fast Lane by MJ DeMarco book notes

The Millionaire Fastlane: Crack The Code To Wealth And Live Rich For A Lifetime has a bit less conventional take on personal financial device. I don't necessarily agree with all of his beliefs, but it was an interesting read and packed in a lot more information than you're typical, "I expanded my blog post to 300 words," book.

Interesting quotes & insights

• Beliefs drive action, whether true or not. Your belief system acts like a compass that, if errant, can lead you onto unintended detours.
• The real golden years of life are when you’re young, sentient, and vibrant. “Get Rich Slow” is a losing game
• Wealth is family (relationships), fitness (health), and freedom (choice, both fiscally and personally).
• Luck is a product of process, action, work, and being “out there.” And when you are “out there,” you stand a chance of being in the right place at the right time.
• There are right places and wrong places. The right place isn't on your sofa.

The Three Financial Roadmaps

DeMarco outlines three distinct approaches to financial life:

1. The Sidewalk: Leading to poverty
2. The Slowlane: Resulting in mediocrity
3. The Fastlane: Potentially leading to wealth

The Sidewalk

• Characterized by no financial plan
• Driven by instant gratification and conspicuous consumption
• Often leads to lifestyle servitude and debt

The Slowlane

• Traditional "Get Rish Slow" advice.
• “Get Rich Slow” demands a long life of gainful employment.
• “Get Rich Slow” is a losing game because it is codependent on an unpredictable Wall Street and anchored by your time.
• Advocates of the FIRE strategy are not free of money. They are owned by it.

The Fastlane

• Focuses on creating scalable businesses
• Aims to affect millions of lives (and potentially make millions)
• Prioritizes time over money
• Seeks to create wealth rapidly through entrepreneurship

Against the Slowlane mindset

The Criminal Trade: Your Job

The 5-for-2 trade inherent in the Slowlane is generally fixed and cannot be manipulated because job standards are five days a week.

• 1: To Trade Time Is to Trade Life
• 2: Limitation on Experience. I learned more as an entrepreneur in two months than I did working ten years at dozens of dead-end jobs.
• 3: No Control. A job is like sitting in the bed of a pickup truck. You’re exposed to the harsh elements while the driver of the truck sits comfortably in the driver’s seat.
• 5: A Subscription to “Pay Yourself Last”
• 6: A Dictatorship on Income

Gambling on Hope

To assume that you will live a long, healthy life is arrogant. To presume that life won’t throw you any curves is naïve.

1. Hope you will live long enough to enjoy the fruits of your savings
2. Hope that you’ll always be gainfully employed,
3. your Home - Home equity is lauded as a middle-class wealth vehicle.
4. the Company - Not many companies outlive the centuries.
5. Your Lifestyle - The Slowlane begs you to “settle for less” and live like an ascetic monk.
6. Economy - Hope your investments will yield a predictable 8% return year after year.

The Fastlane Mindset

Switch from Consumer to Producer

• Become a producer first and a consumer second.
• Create value and solve problems for others rather than just consuming products and services.

The Law of Effection

"The Law of Effection states that the more lives you affect in scale and/or magnitude in an entity you control, the richer you will become."

• Impact millions, make millions

Divorce Wealth from Time

"Money trees" are business systems that divorce wealth from time and can survive on their own.

Take action

• You learn more from doing than any book or professor. Get out and take repeated action.
• Someday is dangerous and paralyzing. It traps you in the land of Nowheresville.
• To live unlike everyone else, you must do what everyone else won’t.

Beliefs

• Believe that retirement at any age is possible.
• Believe that old age is not a prerequisite to wealth.
• Believe that a job is just as risky as a business.
• Believe that the stock market isn’t a guaranteed path to riches.
• Believe that you can be financially free just a few years from today.

Worse Case Consequence Analysis (WCCA)

Answer three questions about every decision of consequence:

1. What is the worst-case consequence?
2. What is the probability of this outcome?
3. Is this an acceptable risk?

Weighted Average Decision Matrix (WADM)

Time

• Value your time poorly, and you will be poor.
• Time is deathly scarce, while money is richly abundant.
• Lifestyle extravagances have two costs: the cost itself and the cost of free time.

The Five Fastlane Business Seedlings

DeMarco outlines five types of business that can potentially generate passive income.

1. Rental Systems (Passivity Grade: A)
2. Computer/Software Systems (Passivity Grade: A-)
3. Content Systems (Passivity Grade: B+)
4. Distribution Systems (Passivity Grade: B) Moving product to the masses
5. Human Resource Systems (Passivity Grade: C). Ex: Amazon.com is a distribution system backboned by a computer system and operated by a human resource system.
   • Human resource systems are the most expensive and complicated to run.
   • Humans are unpredictable, expensive, and difficult to control.

CENTS Framework

DeMarco evaluates business opportunities on the CENTS framework.

• Control: Have full control over your business
• Entry: Look for high barriers to entry
• Need: Solve real problems and fulfill genuine needs
• Time: Create systems that don't require your constant time input
• Scale: Build businesses that can scale massively

Potent Business Ideas

#1: The Internet

• Subscription: Offer access to data, information, or software (SAAS), and charge a monthly fee.
• Content-based:Online news magazines and blogs sharing information to a niche or industry.
• Lead generation: Aggregating a non-homogeneous industry.
• Social Networks / Communities / Forums: Community building is a cousin of content systems.
• Brokerage / Marketplace Systems: Bring buyers and sellers together.
• Advertising: Like brokerages, advertising fees instead of brokerage fees.
• E-Commerce: Selling goods over the internet.

Find Your Open Road

• Someone is always already doing it, you don't need an idea that has never been done before. How can you do it better? Can you fill the need better, offer a better value skew, or be a better marketer?
• Listen for:
  • I hate or this sucks
  • I don’t like
  • This frustrates me
  • Do I have to?
  • I wish there was
  • I’m tired of

Execute

• Burn the business plan.
• The best business plan will always be a track record of execution.
• There’s an old saying, “I don’t know the key to success, but the key to failure is trying to please everybody.”

Customer Service as a Competetive Advantage

• SUCS, or “Superior Unexpected Customer Service.”
• Exceeding customer expectations can dramatically boost business sucess.
• Poor service gaps are Fastlane opportunities.
• Satisfied customers have a dual residual effect: Repeat business and new business via discipleship.

Build a brand, not a business

Rise above the noise: Polarize, Arouse emotions, Be risqué, Encourage interaction, and Be unconventional

Develop your Unique Selling Proposition (USP)

• Step 1: Uncover the Benefits. Do you add or create value, solve problems or fill a need?. 4 Step Process: Switch places, Identify features, Identify advantages, Translate advantages into benefits.
• Step 2: Be Unique. You need significant value skew when compared to the alternatives.
• Step 3: Be Specific and Give Evidence. Alleviate natural consumer skepticism with specific evidence.
• Step 4: Keep it Short, Clear, and Concise.
• Step 5: Integrate Your USP into ALL Marketing Materials