The Millionaire Fastlane (42 page)

“Live below your means” is relevant at any income level. The key variable is the word “means.” If Bill earns $50,000 and Jack earns $1 million, who has the greater means? Who will live the extravagant lifestyle? Both might be living “within their means,” but Jack has a drastically different lifestyle. Remember, Slowlaners seek to
minimize expenses
while the Fastlaner seeks to
maximize income and asset values
.

You can live richly and still live below your means, but for Fastlaners it's a big challenge because we get paid first, not last. Tax bills come long after the income is earned, and “live below your means” requires above-average discipline.

A Financial Adviser Doesn't Fix Illiteracy

I am my own financial adviser because I don't like losing control. Hiring a financial adviser might make sense to you aside from one caveat: Hiring a financial adviser doesn't fix financial illiteracy. Yes, just because you had salad for lunch, it doesn't mean you can eat doughnuts for dinner. If you hire a financial adviser, you need competency to assess his advisement. Is your adviser advising a bond in a rising interest rate environment? Is your adviser advising treasuries when they are overbought? Is your adviser advising an investment that seems “too good to be true?”

Literacy gives you the power to evaluate your adviser's advice. In October 2009, actor Nicolas Cage, who reportedly earned more than $40 million in 2008, sued his former business manager for $20 million, accusing him of poor advisement and leading him down a path toward financial ruin. Cage contended that his manager exposed him to a basket of risky investments resulting in catastrophic losses. In a countersuit filed later, Cage's former business manager blamed “lavish spending” on Cage's financial difficulties-not his advice. Whatever the truth, if you can't audit your adviser, you don't have control. If you can't critique good advice from bad you don't have control. For those who hire financial planners, literacy is insurance. Financial advisers do not solve financial illiteracy just as more money doesn't solve poor money management.

Financial illiteracy exposes you to risk, and in the worst case scenario, fraud. Bernard Madoff's investment fund defrauded thousands, and billions were lost, but what's more shocking is that the whistle was blown years before. You see, when you are financially illiterate, you are deaf, and when you are deaf, you can't hear the whistle.

Chapter Summary: Fastlane Distinctions

• The Fastlane is the means to your end because dreams cost money.
  
• Conquer big goals by breaking them down to their smallest component.
  
• Daily saving reinforces your relationship with money; it is your passive system that buys freedom and another soldier added to your army.
  
• A money system isn't used to grow wealth but to grow income. Growing wealth should be left to your Fastlane road.
  
• You will struggle to build a financial empire if you are financially illiterate.
  
• “Live below your means” is relevant at any income level.
  
• For the Fastlaner, “Live below your means” means to expand your means.
  
• A financial adviser doesn't solve financial illiteracy and literacy is insurance.
  
• Financial illiteracy dilutes your control, especially when evaluating the advice of a financial adviser.
  

PART 8:
Your Speed–Accelerate Wealth

CHAPTER 38: THE SPEED OF SUCCESS

Ideas are nothing but neurological flatulence.
~ MJ DeMarco

“Wow-220 mph!”

I hear the “220 comment” from youngsters who sneak a peek into my Lamborghini while it's parked in public. The listed top speed on its speedometer is 220 mph. Yet, despite all that implied power, the car has never been driven to 220 mph or even 150 mph. The “220 mph” is nothing but “potential speed,” and everything you've read in this book is just that: idle, unrealized potential.

The Fastlane is a conglomeration of information that creates potential speed. You understand the Fastlane roadmap and its wealth equation. You've dumped the Sidewalk and the Slowlane. Your vehicle is primed and filled with fuel. You are committed, not merely interested. You're ready to engage in process, and you know exactly what you want and where you want to go. You've picked a road, and it's time to hit the accelerator.

Doing Nothing Is Expected

Ever wonder if those late-night get-rich infomercial products really work? Can you really make millions trading foreign currency or buying real estate with no money down? The truth is you can-but the purveyors of these infomercials don't tell you their real revenue model. They make money on planned obsolescence. Planned obsolescence is a marketer's expectation that whatever they're selling you, you won't use it. And if you don't use it, you are unlikely to ask for your money back.

Doing nothing is expected.

Human nature plays a powerful role in the business models of producers. Get-rich systems sold on TV take advantage of human nature because it is human nature to seek events and avoid process. The path of least resistance is to not do anything, or to try halfheartedly. The fact is, most people-whether they agree with Fastlane strategy or not-will do nothing with the information. They'll stare at the roadmap but never take the road and hit the accelerator. It's one thing to possess the treasure map; it's another to get out of the house and follow it. Doing nothing is normal when it's normalcy that you seek to avoid!

The Strategy for Speed: Chess, Not Checkers

Speed is not thinking about a Fastlane business, but creating it. Speed is uncovering a need and formulating a solution and a prototype. Speed is filing paperwork for your business entity. Speed is building and growing a business. Speed is making contacts and forcing your process out into the world. Speed is approaching your business like a strategic game of chess while your opponents play checkers. Speed is turning off the Playstation.

Chess is a complex game with complex maneuvers, and your business must be run similarly. Unfortunately, most business owners approach business one-dimensionally, like a game of checkers, and doing so puts the owner into a winless game. Checkers is one-dimensional because all the pieces move identically, while chess is multi-dimensional because each piece moves differently with different roles. The business owner who plays checkers has one offensive and defensive play in the playbook: price. Raise prices, lower prices, cut costs, cheaper suppliers: “Oh Lord, how can I be the cheapest so everyone buys from me?” This one-dimensional attack throws entrepreneurs into cyclical bidding wars, marginalizing their offers with one goal in mind: To be the cheapest.

In the limo industry, price wars dominated because owners commoditized their brands to a one-dimensional attack: “If my offer is the cheapest, I will book more business.”

Your success requires a shift from this one-dimensional approach to a multidimensional attack. Put the checkers away and play chess, where each chess piece represents a specific function within your business. How you play each function will determine if you build Fastlane speed or drift aimlessly. Those pieces are:

• 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
  .
  

While it isn't within the scope of the book to dissect every nuance of each, I will highlight the crucial momentum-building elements that explode speed. You've got a system to build!

Execution Is King. Ideas Are Pawns.

Potential speed is a loose idea that needs an executioner. When a youngster sees 220 mph on a speedometer, they see an idea and a possibility. In business,
ideas are pawns
; they're 220-mph speedometers on idle, parked Lamborghinis. Actual speed is execution-pressure applied to an accelerator-and it's the king of the entire game.

• Potential Speed --> An Idea
  
• Actual Speed --> An Idea Accelerated and Executed
  

An idea trapped in your brain is like a supercar trapped in the garage with a dead battery. It accomplishes nothing and its purpose is untapped. Execution is making an idea real and giving the battery a charge. Execution is taking that Lamborghini out of the garage and slamming the accelerator to the floor, with the wind giving you a temporary face-lift. Execution is getting that idea out of your mind on onto the roads of possibility.

Entrepreneurs struggle to differentiate between idea and execution. They think ideas are worth millions, when success is never about the idea but about the execution.

“
I had that idea!”

Oh yeah? Who cares.

So did a thousand other people. What separates you from them? They executed. You didn't, and you did nothing. Instead, you spent hours playing fantasy football. You spent the morning sleeping. You spent five days at a job. You chose everything but that great idea. You see, ideas are nothing but a chemical reaction in your brain. It's an event that requires little effort. An idea is the event, while the execution is the process. Pierre Omidyar didn't start eBay in a flash of brilliance; no, he took that flash (the event) and transformed it into massive execution (the process). Execution is the great divider separating winners and losers from their ideas.

If you want to retire 30 years early, you need a dominant, relentless king. Aloof and blasé kings lose games and don't win races.

Ideas Are Worthless; Execution Is Priceless

Spend 10 minutes at my forum and you'll discover most entrepreneurs love ideas but rarely discuss execution. They dabble with the pawns of the game.

I have this great idea!
Is anyone doing this?
I can't disclose this idea because it will be stolen!
Will you sign my non-disclosure agreement before I tell you my idea?

No, I won't sign your NDA, nor do I care about your idea. In the world of wealth, ideas are worthless yet treated like gold. I love how idea conjurers protect their ideas with great stewardship, careful to ensure they don't get into the hands of would be thieves, not knowing that their ideas are already shared by hundreds of others.
The owner of an idea is not he who imagines it, but he who executes it.

According to entrepreneur Derek Sivers (
Sivers.org
) ideas are just multipliers while execution represents actual money. Within our Fastlane chess game, ideas (pawns) are potential speed, while execution (the king) is the pressure applied to the accelerator. This relationship demonstrates how the coupling of a great idea (potential speed/strong pawns) is worthless when attached to weak execution (no acceleration pressure/weak king).

The Pawn: Idea (Potential Top Speed)

• Awful idea = 1 mph
  
• Weak idea = 5 mph
  
• So-so idea = 35 mph
  
• Good idea = 65 mph
  
• Great idea = 100 mph
  
• Brilliant idea = 200 mph
  

The King: Execution (Accelerator Pressure)

• No execution = $1
  
• Weak execution = $1,000
  
• So-so execution = $10,000
  
• Good execution = $100,000
  
• Great execution = $1,000,000
  
• Brilliant execution = $10,000,000
  

If you notice, a brilliant idea and no execution are worth all of 200 bucks. Awesome potential speed (idea) is married to weak accelerator pressure (execution). Yet a so-so idea with brilliant execution could be worth $350 million. You see, it isn't about your ideas and their potential speed, but about your execution!

When I started my Web business, several other companies already had established Web sites. Instead of reasoning, “Someone is already doing it,” I executed better and became the leader in my industry. Was my idea spectacular? No. It was an OK idea, but I executed better than the competition. After my revenue model became successful and copied unmercifully, did my business decline and fail? No, because the idea wasn't the lynchpin to success, it was execution. Competitors who copied my idea didn't possess a powerful king to the wealth game, and that is execution. Chess isn't won by stealing pawns.

How did MySpace and Facebook become two of the most popular social networks when they weren't the owners of the original idea? Execution. Execution is taking the neurological flatulence that is an idea and making it smell like a rose. Seriously, think about what I've been saying throughout this whole book: Why is execution so difficult, while ideas are so routine? Once again, we return to our wealth dichotomy: Event versus process. Execution takes process: effort, sacrifice, discipline, and persistence. Ideas are just events.

If you need to travel 6 million miles and you move at 15 mph, you will get there in 45 years. This represents the Slowlane. If you move at 95 mph, you get there in seven years. This is the Fastlane. The business of speed is execution. The speed of the Fastlane is growing a business exponentially and taking advantage of exploding net income and asset value.

Chapter Summary: Fastlane Distinctions

• Speed is the transformation of ideas to execution.
  
• Most people let powerful information expire and become worthless.
  
• Successful Fastlane businesses are run multi-dimensionally, like a game of chess. One-dimensional businesses focus on price only.
  
• Execution divides winners and losers from their ideas.
  
• In business, execution is process. Ideas are events.
  
• Ideas are potential speed. Execution is actual speed.
  
• Others share your blockbuster idea. He who thinks the idea owns nothing. He who executes the idea owns everything.
  
• Real money and momentum is created when an idea (potential speed) is matched with execution (accelerator pressure).
  
• An idea is neurological flatulence. Execution makes it smell like a rose.