The Millionaire Fastlane

by MJ DeMarco

  Sidewalking Symptoms: Are You on It?

  You haven’t learned much since graduating from high school or college.

  I’m done with school, hooray!

  You change jobs frequently.

  C’mon, MJ, I left because this other job pays more.

  You think people with money have it because they had rich parents, luck, or easier life circumstances than you.

  I’ve had it hard. If my parents would have paid for college I could have had a good job. I had a rough childhood. Those people with money have no idea.

  You are easily impressed and seek to impress.

  I love designer purses, German cars, Italian clothes, and purebred dogs. I work hard for my money and I deserve it!

  You have poor credit.

  I pay my bills most of the time . . . it’s just that I can’t always pay on time because of situations outside of my control. Besides, the banks and utility companies are big, rich companies—they are the enemy.

  You put faith into politicians and government to change the system, instead of focusing on how you can change yourself.

  A bigger government is the solution. More regulation, more programs, and more services. The government should serve the people. Rich people should pay more in taxes for their good fortune—they can afford it and I can’t!

  You view pawnshops, payday loan stores, and credit cards as a means of supplemental income.

  Groceries can’t wait until the next paycheck—my family has to eat! Besides, there’s a sale on crab legs for only $22 a pound.

  You have filed for bankruptcy at least once.

  It wasn’t my fault—I overextended myself and didn’t expect to lose my job. I didn’t expect a recession. I don’t feel bad about bankruptcy because it wipes my slate clean and I can start over fresh. I’m already pre-approved for another credit card.

  You live paycheck to paycheck.

  Wait, doesn’t everyone?

  You don’t alert a business when they give you incorrect change in your favor.

  Are you crazy? If a business makes a money mistake, I’m keeping it. It’s not my fault their employee screwed up.

  You have a negative net worth and little, if no savings.

  What’s the point? You only make 1% on a savings account anyhow, and look at all those people who invested in the stock market and lost nearly everything in 2008. Suckers! At least if I spend every dime I can’t lose it!

  You have no car insurance, no health insurance, and you have unprotected sex with uncommitted partners.

  What can I say, I’m a risk taker. I know that insurance and birth control are important, it’s just not a priority.

  You regularly gamble at the casino or buy lottery tickets.

  You gotta play to win right? Forget the odds—this time’s different, I just feel it.

  You immerse yourself in alternate realities, including website celebrity gossip blogs, television, sports, video games, or soap operas.

  I just love American Idol, The Walking Dead, and Law and Order. Monday through Friday from 6 p.m. to 11 p.m., I know exactly where I will be.

  You’ve lost money on “get rich” schemes.

  There’s got to be an easy way to wealth. If I just buy this crypto-coin, program/DVD series/late-night infomercial product, I’ll have the secret! Get rich easy is out there!

  Your family cringes when you ask for money or you quit asking because you know a lecture follows.

  Geez, it’s just $500. My parents should take care of me until I die. Don’t they see how hard I have it? I mean, look at this apartment! The granite countertops need to be replaced!

  Can you identify a behavioral pattern? These mindsets are indicative to the Sidewalk. Hopefully you’re not feeling angry or defensive because that might hint your beliefs are bred from the Sidewalk.

  The Sidewalk’s Gravitational Pull: POVERTY

  A recession is a bump in the road. How many people lost their homes due to the last economic bubble? Their savings, their jobs, or their 401(k)s?

  The Sidewalk offers no protection, because you’re naked and you can’t absorb the hits. If you’re hit by traffic, you’re roadkill. If you want to be unshakable on your financial road trip, you have to get tough and strap on a bulletproof vest. Your plan must transcend years of change and variability, not days.

  A life on the Sidewalk naturally pulls you to poverty.

  Because the Sidewalk is about the short term, it never works for the long term. Your future becomes a mortgage for a comfortable present. Unfortunately, any bump in the road causes the loans of the Sidewalk to be called in: a recession, a job loss, an interest rate hike, a mortgage reset. Living on the Sidewalk can literally end in living on the sidewalk.

  If you ask any derailed Sidewalker what spun his financial life out of control, he will quickly blame some external factor: I was laid off! My car broke down! I had no health insurance when I broke my foot! The judge ordered a 20% increase in alimony! When you rev your financial engine at the redline you’re guaranteed to burnout. And then, ironically, your pleasant todays turn into horrible tomorrows: more work, more debt, and more stress.

  I don’t know your age, but let’s be honest and ask the uncomfortable question: Can you seriously expect to retire on $19,000 in net worth? Or $119,000? Is it rational to think you can live off your home equity refinance? Have you thought beyond next week’s paycheck? At what threshold do you realize that it’s time to shift gears and reevaluate? Is there a threshold? Why would something that you’ve been doing for 5, 10, 20 years suddenly start working?

  Yes, insanity is doing the same things repeatedly and expecting different results.

  The Sidewalk is not a road to wealth unless your strategy is casinos, lottery tickets, or some poison-your-spouse insurance scheme. Government aid, social security, charity, and “my parents will soon die and leave me a fortune” inheritance is not a financial plan! If you don’t want to retire under a bridge in a cardboard box or work at Wendy’s until you’re 75 years old, you have to have a plan.

  Should life grant you another 50 years, what the heck is the plan?!

  The first step to escape the Sidewalk is recognizing that you might be on it . . . then replace it with something that works!

  Money Doesn’t Solve Money Problems

  Newsflash: The Sidewalk is money blind. It doesn’t care how much money you make. You can’t medicate poor money management with more money. Yes, you can look filthy rich and still be riding the Sidewalk dirty.

  Sidewalkers come from all walks, even those with conspicuous wealth. They own businesses, work high-paying careers like medicine or law, or live as successful actors or musicians and earn big incomes. The common denominator is consistent: There is no plan and no savings—spend more than you earn and trade a secure tomorrow for a “living large” lifestyle of today. A Sidewalker’s wealth equation is determined by income plus debt, determined by available credit.

  Wealth = Income + Debt

  Sidewalkers peg their lifestyle in direct proportion to their income and supplement that lifestyle with extensive use of debt. All Sidewalkers stress about paying their mortgage or rent, paying the utility bills, meeting the minimum payments on their credit cards—it’s just what happens when there is no thought given past the happy hour after payday.

  The Affluent Sidewalker: Income-Rich

  When an income-rich Sidewalker goes broke it makes big news. Have you ever wondered how a rich rapper can go broke three years after his last album? Or why a famous actor needs to file bankruptcy a few years removed from the public spotlight? How does one transform an $80-million NBA contract into the oblivion of bankruptcy? I’ll tell you: The Sidewalk where wealth equals income plus debt.

  You don’t have to look hard to find an “Income-Rich” Sidewalker. These are people who look rich, but in reality are one paycheck, one album, or one movie failure from broke. They make large incomes, with every dime spent on the next lavish accoutrement. Their lifestyle is accelera
ted by a big income and a big credit line. Yes, after their big income is spent, they buy more things they don’t need with money they haven’t yet earned, trusting fully that their large incomes will go on forever.

  I call these Sidewalkers “all credit cards.” They drive nice cars and wear expensive clothes, but are one blown gasket from a total financial meltdown.

  A member of the Fastlane Forum (TheFastlaneForum.com) posted this slice of Sidewalking overhead from a friend who works at a lending agency:

  “A famous rapper was denied a loan for $60,000 . . . despite putting on his application that he was making $400,000 per month . . . yet, after having two hits in the past year, he must be broke. He also had a terrible credit score. Goes to show you, money management skills and having good credit are very important, even when you are having a ton of success.”

  Since Income-Rich Sidewalkers earn big incomes, their extravagances are commensurate with their earnings. For example, if an Income-Rich Sidewalker earns $20,000 a month, they feel justified in buying a pair of $400 jeans. The problem is that, just like Income-Poor Sidewalkers, an Income-Rich Sidewalker’s spending isn’t satisfied until they’ve burned through their entire monthly income plus some. It’s an irrational way to live, as if these people fear that not spending the money will cause it to disappear. Earn $50,000 a month? Spend $60,000. Earn $250,000? Spend $350,000.

  The money outflow always outpaces the money inflow.

  Someone who earns $2 million a year is susceptible to the same Sidewalking pitfalls as someone who earns $20,000! Financial discipline is blind to income. Lack of financial discipline resides on the Sidewalk and it doesn’t care what you earn or drive.

  The Income/Wealth Mirage of the Sidewalk

  Notice how both income-poor and income-rich sidewalkers share the same problems but different scenery. The reason is, more money is not a solution to poor financial management. Poor money management is like gambling at a casino, because, over time, the house always wins. Tossing more money at the deficiency is like trying to plug a hole in a dam with more water. More money doesn’t buy financial discipline.

  Those lacking financial discipline misuse money to delay the inevitable. If you can’t live on $40,000 a year, you won’t be able to live on $400,000 a year. While you might fret about your $900 mortgage payment, the income-rich Sidewalker frets about his $9,000 mortgage payment. The fretting is alike; the problems are the same, only the amounts differ.

  Only a mindset change regarding money is a solution to money problems. To change your mindset, you must change your roadmap. Get off the Sidewalk and stop equating wealth to income and debt.

  Chapter Summary: Fastlane Distinctions

  ➡A first-class ticket to the Sidewalk is to have no financial plan.

  ➡The Sidewalk’s natural gravitational pull is poverty, both in time and money.

  ➡You cannot solve poor financial management with more money.

  ➡You can be income rich and still ride the Sidewalk dirty.

  ➡If wealth is defined by income and debt, wealth is an illusion, because it is vulnerable to potholes, detours, and “bumps in the road.” When the income disappears, so does the illusion of wealth.

  ➡Poor financial management is like gambling; the house eventually wins.

  [6] - Is Your Wealth Poisoned?

  Wealth is the ability to fully experience life.

  ~ Henry David Thoreau

  Society’s TOXIC DEFINITION of Wealth

  The lure of the Sidewalk evolves from society’s poisonous and toxic corruption of wealth. Society has resolutely declared wealth’s definition for you: “Wealth” is a chauffeur-driven Rolls Royce, chartered jets, exotic trips to the South Pacific, a mansion on the bay, and a Las Vegas penthouse. Society says wealth is six-carat diamond earrings, Aston Martins, and watches that cost more than most people’s homes. Society says wealth is an Indecent Proposal to buy a romp in the sack with Demi Moore for $1 million based on the argument “the night will come and go, but the money will last a lifetime.” How am I doing? Sound like wealth?

  Ask 10 people “what is wealth?” and you’ll hear 10 different answers. Your “wealth” might be symbolized by a Lamborghini like it was for me, or it might be a farm on 70 acres in Montana and a stable full of race horses. If you think like most, “wealth” is instinctively defined by lavish luxury lifestyles.

  Society has us believing that wealth is an absolute perfected by material possessions and reckless consumption. In fact, I’ve had to tailor the “hook” of this book to society’s definition of wealth’s real definition. Why the misdirection? Like Pavlov’s dogs, you’ve been trained to respond to it. You see, society has done a fabulous job of defining wealth for you, and unfortunately, they (again) have misled you. But don’t worry; if you want luxury, the Fastlane can deliver.

  The Wealth Trinity: What Is Wealth?

  Wealth isn’t as ambiguous as it may seem. The happiest moments in my life were when I felt true wealth. And guess what? It wasn’t the day I bought my first Lamborghini. It wasn’t the day I moved into a big house on a mountain or sold my company for millions. Wealth is not authored by material possessions, money, or “stuff,” but by what I call the three fundamental “F’s”: family (relationships), fitness (health), and freedom (choice). Within this wealth trinity is where you will find true wealth and, yes, happiness.

  Wealth is strong-spirited familial relationships with people. Not just your family, but with people, your community, your God or spirituality, and your friends. At the end of the iconic movie It’s A Wonderful Life we’re given the final lesson: “Remember, no man is a failure who has friends.” This reflects on the importance of having your life shared with friends, family, and loved ones. Wealth is making a difference. Wealth is community and impacting the lives of others. Wealth cannot be experienced alone in a vacuum. Believe me, the richest moments of my life occurred when I was surrounded by friends or loved ones.

  Second, wealth is fitness: health, vibrancy, passion, and boundless energy. If you don’t have health, you lack wealth. Ask any terminally ill person what they value. Ask any cancer survivor how they suddenly feel reborn and happiness is displaced from “stuff” to people and experiences. There is no price on health and vibrancy.

  And finally, wealth is freedom and choice: freedom to live how you want to live, what, when, and where. Freedom from bosses, morning alarms, and the pressures of money. Freedom to passionately pursue dreams. Freedom to raise your children as you see fit. And freedom from the five-day drudgery of doing things you hate. Freedom is the liberty to live your life as you please.

  Wealth Can’t Be Bought for 60 Easy Payments

  I vividly remember the day. After I sold my company in 2000, my attorney handed me my first installment payment, a check for $250,000.

  “Yippee, $250,000! I’m rich! I made it!” I mistakenly gleamed. And now it was time to announce it the world. I immediately envisioned fast cars, designer clothes, speedboats, and an entourage of bikini-clad women. I thought I was wealthy and I was going to flaunt it.

  Unfortunately, that fantasy was miles from the reality. Yet, I tried. I bought a candy-apple red convertible Corvette. Sports car? Check. Designer clothes from Nordstrom? Check. I researched buying a speedboat until the Internet crash interrupted my silly fantasy. I invested my newfound wealth in tech stocks and lost thousands of dollars. Within months, more than half of my “wealth” evaporated, and after a conversation with my accountant, another third was soon to be parted with, thanks to taxes.

  Ironically, in my attempt to look wealthy, real wealth slid further away. With no job, no business, no income, and a small sum of money, I couldn’t support my life forever, nor the wealthy lifestyle I envisioned for someone rich.

  I wasn’t rich at all.

  The Illusion of Wealth: Looking Rich

  In pop culture, master illusionists of wealth are called “30K millionaires.” If you haven’t heard this phrase, it characterizes someone who maint
ains a millionaire image, yet has no net worth. These folks aren’t hard to find. They drive entry-level BMWs with custom chrome rims, they wear fancy designer clothes with Gothic cursive lettering from some faux French guy, and they congregate in the VIP section of the club ordering bottle service, of course, on credit. These folks broadcast like dashing debutantes with an extraordinary A-game, but behind all the flash-and-cash they’re miserable magicians of the Sidewalk.

  The problem with looking wealthy versus being wealthy is that the former is easy while the latter is not. Easy credit and long-term monthly financing options (make no payments for one year!) are tempting conduits to help you purchase the illusion of wealth. Society has led you to believe that wealth can be bought at a mall, at a car dealership, or on an infomercial. Like my initial spending spree when I cashed my first check, these appearances of wealth are supposed announcements to the world: “I’m rich!”

  But are you? When you finance an $90,000 Mercedes Benz over six years because that’s all you could afford, that isn’t wealth, but impersonation of wealth. You’re fooling yourself, and it’s a Fastlane detour. But don’t jump the bandwagon yet; this isn’t a sermon about how you can’t spend money on pricey German sedans. Not at all.

  Wealth isn’t embodied in a car but in the freedom to know that you can buy it. Freedom to walk into the dealership, know your price, pay cash, and drive away.

  For a gift, I bought my brother a new Lexus. It was the easiest transaction I ever did. I researched the car and determined the price I wanted to pay. I walked into the dealership with a cashier’s check and told the salesman, “I have a cashier’s check for $44,000 and I want to buy that car. I need a YES or a NO.” Twenty minutes later, I owned a Lexus. This is wealth, not an impersonation of wealth.