The Millionaire Fastlane (16 page)

I call these people “Broke Know-It-Alls”-people who dispense financial, moneymaking advice, and yet are dirt poor. These fat behemoths are walking hypocrisies on how to live a life of health and fitness. Listen to these folks with an entertainment expectation, not advice. Good advice comes from the guy who scores all the touchdowns-not the guy shut out in the fourth quarter! The best quarterbacking advice comes from Peyton Manning, not MJ DeMarco.

Is a Paradox of Practice in Play?

In the game of money, money is the scorecard. If someone tells you how they “scored,” make sure they disclose their real method to wealth, not the illusion concealing the real culprit.

Sadly, it's virtually impossible to get good, practical money advice, because most gurus live a Paradox of Practice. Yes, gurus are rarely rich because of their advice, but rich because they're successful Fastlaners who covertly hide their Paradox of Practice.

These paradoxical metaphors described earlier befit the hypocrisy of the people who you've entrusted with your financial roadmap. You're sold blindly down the river by a ride they've never completed. Meanwhile, they gaze at you comfortably above in their corporate jet, drinking champagne. No one tells you the real, unadulterated story behind their road to wealth, but I will.

The Slowlane roadmap is sanctimoniously trumpeted by best-selling book authors who dispense financial advice through TV, radio, and books. The strategies they sell are a travesty of grand illusions. Do you seriously think these people are rich from their preachings? Or, are they selling you the Slowlane while they get rich in the Fastlane?

Let me hypothesize about the possible wizardry behind their charade.

First is “Suze.”

Suze preaches mutual funds, dollar-cost averaging, 401(k)s. We can absorb Suze in many media: radio, TV, and in any of her half-dozen books. Her grille is everywhere. She's the wretched Slowlane poster child, a high-volume producer of Slowlane junkets spewed to millions. So what's the problem? Ask yourself this: Is Suze rich because she followed her own advice like municipal bonds, dollar cost-averaging and 401(k)s? The probable hypocrisy-the Paradox of Practice-is that Suze's method of creating wealth doesn't appear to be the road she travels, nor teaches. Is Suze Fastlane rich because she leverages the Fastlane roadmap while she pitches you the Slowlane? Is she worth millions because she followed her own advice? Or because she sold millions of books? Is her wealth equation different from the one she teaches? Things that make you go hmmm…

In a 2007 article Suze was quoted as admitting to having the bulk of her wealth (an estimated $25 million) in bonds, primarily municipals. Additionally, she admits that only 4% of her wealth is tied-up in the stock market because “if I lose a million dollars, personally I don't care.” Wow, and yet, this is the vehicle you should entrust to build your wealth? How exactly did Ms. Suze acquire that $25 million nest egg? Because of her advice which champions the stock market, mutual funds, IRAs, bonds, and treasuries? Or, did she use the Fastlane roadmap, amass wealth fast via explosive net income, and then pour her wealth into these instruments?

Yet, her advice for people at the precipice of poverty is that they should invest in the stock market to create wealth when it appears she hasn't. Folks, the rich use the markets for income and wealth preservation-not to create it!

Then there's David. As I thumbed through David's many books, I was inundated with an alarming quantity of Slowlane ilk: compound interest tables, save 10% of your paycheck, stop drinking expensive coffee, and other chronic Slowlane diatribes. Again, the Paradox of Practice rears its ugly mug. Did David get rich from his advice? Or from selling 11 books, over and over several million times, often regurgitating the same Slowlane sludge until you can't take it anymore?

And finally, we have Robert, who hails from Hawaii and has two dads-one rich, one poor. “Double-Dad Robert” bellicosely explains the real definition of assets and that sophisticated investors are deep into real estate. On national television, Robert once bragged about his Lamborghini and I found this extravagant exposition ironic, yet disingenuous. Why? Isn't Robert showcasing the fruit of his teachings? Perhaps.

Robert is a Fastlane success story. He created and built a brand worth millions. But the curious question is this: Which came first? The best-selling book or the Lamborghini? Is there a Paradox of Practice underneath? Did Robert have this status icon “pre-book” by leveraging his real estate teachings? Or did the Lamborghini arrive after selling millions of books? Robert has undoubtedly amassed a great deal of wealth selling books, games, and seminars. Is it possible you're being sold one wealth equation while the architect of the game uses another?

Gurus fill a market need and I don't deny it. However consider this: Are they being truthful about their paradox and their magic potion? Are they rich because of
what they preach
, OR
what they sell?
Once you're familiar with Fastlane mathematics, it should become clear to you which gurus are likely guilty of the paradox. Is the underlying mathematical equation which governs their teachings the same one that made them rich? If the "do as I say" doesn't match the "do as I do", you should be suspicious.

What makes me different is this: The Fastlane concepts in this book gave me financial independence. I already have financial freedom-the nice house, the sports cars, and the flashy rapper credit card. I don't need this book to get me these things. I also confess this Fastlane disclaimer: This book has the power to make me wealthier because it leverages the same wealth equation I teach you. In other words, the "do as I say" matches the "do as I do."

Slowlane Gurus Admit Failure

On a Slowlane financial radio show, a caller sought advice: In a few months the recession destroyed more than 50% of her savings, which had taken her nearly 11 years to accumulate. The Slowlane guru's advice? A palliative “Stick to the plan.” Recommit. Rebuild.

In other words, my crappy plan has failed you, has taken 11 years to fail you, yet stand by it. Hope the economy rebounds. Hope the economy never sees another recession. Hope, hope, and hope. And yes, please buy my newest book,
Rebuild …

Economic recessions expose the Slowlane as a risky fraud with lifetime ramifications. Since these gurus make their rich livelihood selling the Slowlane roadmap, they need you to believe it works.
Their wealth comes from your belief
. Despite the current recession's masterful expose, the Slowlane illuminati will never admit that their strategy is woefully inept, and instead they have deviously recalibrated their message to conceal the truth: They continue to spew the same failed rhetoric by writing new books, with new titles and new platitudes. Titles like:

Rebuild Your Wealth . .
Start Over …
Recommit …

Notice the shift in language, exposing the truth: If the plan is so good, why do you need to “rebuild” or “start over?” If the strategy worked, such words wouldn't be necessary. For the charade to continue, the gurus need to reinforce the strategy with new books selling the same old shit! And the bigger question: Do you think the gurus need to “start over” or “rebuild”? Of course not! They don't use the plan they sell! They operate in an entirely different wealth universe not predicated on uncontrollable limited leverage.

Chapter Summary: Fastlane Distinctions

• Take advice from people with a proven, successful track record of their espoused discipline.
  
• Many money gurus often suffer from a Paradox of Practice; they teach one wealth equation while getting rich in another. They're not rich from their own teachings.
  

CHAPTER 15: SLOWLANE VICTORY… A GAMBLE OF HOPE

I'd rather live in regret of failure than in regret of never trying.
~ MJ DeMarco

Exodus: Life in the Slowlane

Wealth by the Slowlane roadmap is analogous to Exodus, the biblical story of Moses. God leads Moses out of Egyptian bondage into a daunting 40-year journey through the desert, with the promise of a glorious future in the land of “milk and honey.” After a lifetime of toil and struggle, Moses arrives at the doorstep to his destination and-wham!

He dies.

He never sees the promise of the journey because life has no guarantees.

Sadly, Slowlane wealth is akin to this long, perilous journey through the desert. It's a trip that takes decades to finish, starves your life, and makes no promises. Yes, graduate from college, get a good job, entrust your money to the stock market, serve the boss well, and you might be rewarded. In today's harrowing financial climate, I'm surprised people still believe it.

But people do, and in legions. When I see sales figures for Slowlane books, I'm dumbfounded. Millions sold. How sad. Millions being led astray down a path littered with dangerous potholes and detours, a road that takes years to travel for a far-fetched promise of a freer tomorrow. To assume that you will live a long, healthy life is arrogant. To assume that life won't throw you any curves is naive. For the Slowlane to prevail, it assumes life is predictable and forgiving.

It isn't. You lose your job. You get sick. The car needs a new transmission. You get married. You get divorced. You have kids. You have a child with special needs. You have aging parents who need care. The economy dips into recession or depression.

Life is a menagerie littered with crisis points, which make the Slowlane roadmap a risky bet that consumes your most precious asset: time.

Seven Slowlane Dangers

People drive the Slowlane because it's what they've been told to drive. They believe the risks are minimal and it's safe. After all, 90% of all new businesses fail after five years, so the “Fastlane” can't be any safer! If you lob a little logic into the Slowlane narratives you'll find that it's extremely hazardous and a plan based entirely on
hope
. Assumptions-decades of them-expose the Slowlane's true risks. Choose to travel the road and choose to gamble. Here are the risks:

1) The Danger of Your Health

The Slowlane HOPES you will live long enough to enjoy the fruits of your savings as you hit your late stage years. Remember, you will have millions when you retire at 65! Will you be healthy enough to enjoy it? Alive? If you can't work your job, you can't make money. If you can't work, what happens to this plan? Also, avoid other calamities; hope your job stress doesn't kill you and your family remains healthy.

2) The Danger of the Job

The Slowlane HOPES that you'll be gainfully employed at all times, safely climbing the corporate ladder year after year. You must avoid layoffs, corporate politics, firings, poor industry cycles, job skill degradation, and bad job markets.

3) The Danger of Your Home

Home equity is lauded as a middle-class wealth vehicle. Many gurus have shouted from the rooftops, “Retire on your home equity!” and “Your home is an asset!” Capital BS. The Slowlane HOPES that real estate values always rise, and it's patently false. In 2008, the value of my home equity plummeted $800,000. I disavow my home as an investment and, thankfully, I do not rely on it.

4) The Danger of the Company

Not many companies outlive the centuries. If your retirement faith is put into one company in the form of either 1) your job, 2) your pension, or 3) their stock, you HOPE the company survives. You make a bet. Many retirees discover too late that their retirement pensions are lost to mismanagement by company executives. Others who focus their wealth into one company stock accept great risk that the stock will be worth more in the future. If you assign your retirement unto others, you then accept external risks that you can't control. When the torque of you're financial plan resides with others, you're likely to lose control.

5) The Danger of Your Lifestyle

The Slowlane begs you to settle and become a miser. Want to own an exotic car? Forget it. Want to live on a beach? Wishful thinking. If you cannot control your temptations of lifestyle improvement (a nicer home, a nicer car, a nicer meal out), the Slowlane becomes slower and reverses course. The Slowlane HOPES your “delayed gratification” moves to “no gratification.”

6) The Danger of the Economy

The Slowlane HOPES that your investments will yield a predictable 8% return year after year. You must believe the theory that “buy and hold” works. It doesn't, because economic busts, recessions, and depressions happen. For example, in 2008–2009, the equity markets lost nearly 60%. If you saved for 15 years and amassed $100,000, it would now be worth $40,000. It would take you 14 years at 8% yearly returns just to get back even! That equates to almost 30 YEARS GONE! And this doesn't account for inflation, which makes your $100,000 more like $50,000!

7) The Danger of the Sidewalk

Frustrated Slowlaners often revert to the Sidewalk. Why? Hope over control. When you can't control time, when you can't control your job, when you can't control five days of your life each week, you feel powerless. Emotions of helplessness create an environment ripe for instant gratification and Lifestyle Servitude. A study published in 2008 by the Journal of Consumer Research found that when people feel powerless and out of control, they have a strong desire to buy things that convey a high status. Why do they feel powerless? Simple. In the Slowlane, you relinquish control because
time is in control
and the gates to the Sidewalk reopen. Hope is not a plan.

Resistance Is Futile

When you perform an autopsy on the Slowlane you see its true colors: It's slow, it eats time, and it's risky. When a Slowlaner realizes the plan isn't working, he goes into overdrive. Overdrive in the Slowlane is like pushing a car's accelerator to the floor, hoping its upper speed limits somehow will mystically extend higher, when in fact, the racetrack itself is the problem-not the accelerator. Yet, a Slowlaner will try to manipulate his weak mathematical universe by trying to make the variables malleable.