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1-Page Summary of The Millionaire Fastlane
Overview
We’ve all heard the typical strategies that are supposed to make us rich: Get a good education, work hard, save up some money and retire. But what if you don’t want to only enjoy your riches in the last part of life? What if the stock market collapses and you lose everything? There has to be another way.
The Millionaire Fastlane explains a better way to make money. It starts with having the right mindset and thinking about wealth differently. You can forget about old ways of getting rich because they’re wrong, and you can find out why high income doesn’t mean being wealthy, why looking for one big hit is misguided, and how to start your own business.
Big Idea #1: You’ll fail if you have the wrong mindset, no matter how much you earn.
How do people get rich? Is it luck or fate? A lot of people think so, but if you believe that becoming wealthy is out of your control, this mindset is jeopardizing your chances. You can control your future by planning.
If you think planning ahead is pointless, then you’re setting yourself up for failure. For example, without a financial plan or insurance coverage, external events like losing your job can cause more grief than necessary.
Sometimes, spending money on the present can have serious consequences. For example, if you live paycheck to paycheck and suddenly lose your job, you might not be able to pay your rent.
If you don’t take responsibility for your life, even having a lot of money won’t save you from bankruptcy. If you think that the only thing in control of your life is luck, then it’s tempting to splurge on instant gratification like expensive dinners and luxury cars.
In spite of the fact that you can lose everything, if you have a mindset of saving money and planning for worst-case scenarios, like having enough cash on hand when needed, then you’ll be able to stave off financial ruin. You might even be glad that you saved your money instead of spending it all.
Big Idea #2: The conventional path to wealth is unsound.
We all know the strategy: get a good education so you can land a well-paying job, then work hard and save and invest your earnings. After around 40 years, you’ll be able to retire comfortably. However, there’s an issue with this strategy.
First of all, you might not be able to earn as much money with a salary alone. There’s a limit to how high your salary can be.
It’s obvious that you can’t work 100 hours a week for the rest of your life. You also can’t ask for a 200% pay raise, even if you’re an exceptional employee or invest all your money in stocks and lose it when they go down. Finally, inflation will decrease the value of whatever savings and investments you have. Therefore, if after some decades you manage to save $2.5 million dollars (in today’s currency), it won’t be worth as much as $250,000 because of inflation over time. Even worse is the fact that there’s no guarantee that you’ll live long enough to enjoy those rewards anyway since this strategy requires working really hard while young so that you can relax when old.
So, to make the most of your retirement, you should retire while you’re young. When your joints are healthy and you have energy, it’s easier to appreciate free time. It’s far more enjoyable to go hiking when your body doesn’t ache from arthritis.
Big Idea #3: You don’t need a flashy degree to get wealthy.
Some fields require a certain educational degree. However, remember that college isn’t always necessary to be successful. It’s possible you’ll earn more money with a higher education degree, but it will cost you. If you go into business and get an MBA (Master of Business Administration), the financial setback is a significant consideration. The College Board reports that the average college student spends $59,000 on their education.
