Are You Ready for the Fastlane?

The Millionaire Fastlane by MJ DeMarco is unlike most personal finance books. DeMarco explains that the road to significant wealth isn't through saving and scrounging, or trying to deprive ourselves of lattes, but it is through entrepreneurship that great wealth is made. He mentions that most personal finance gurus are quite wealthy, however they didn't attain their wealth from the same advice they peddle, such as "pay yourself first" and "save 10% of your income" (most attain their wealth through writing books). Although this is still good advice, it's not how the affluent gained their wealth.

So the "fastlane" to wealth is entrepreneurship. One of DeMarco's quotes that stuck with me is that "to make millions, you have to affect millions." I think this quote sums up entrepreneurial success, successful businesses help solve problems for a lot of people. They provide a service or product that's in demand.

Building a successful business is incredibly difficult and may not be for everyone. It's important to get into business for the right reasons, which DeMarco says is to help people solve their problems. Going into business just for the money will inevitably lead to failure.

The premise of what DeMarco is saying is true, vast wealth is held by a select few who have risked their livelihood on an idea that their service or product was something the world needed. The reality is that the majority of the population is risk adverse and would never want to attempt to start their own business. There's nothing wrong with that, however it's important to note that you won't be travelling down what DeMarco calls the "fastlane" to financial freedom, but the "slowlane."

Here's a video book review:

Learn From Canada's Foremost Capatilist

The host of CBC's Dragon's Den, Kevin O'Learly has come out with an autobiography entitled "The Cold Hard Truth". For those of you who have never watched the show, it would be the American Idol of venture capitalism. Keven O'Learly is one of 5 panelists who decide whether a new venture is worth staking their own money on. All the panelists have entrepreneurial experience, building up multi-million dollar companies. When a prospective start-up company pitches their idea, they are hit with a barrage of hard to answer business finance questions from the "Dragons". There is no doubt that the "Dragons" know business and that they've gained knowledge from where it counts, main street.

So what can we learn from O'Leary? O'Leary built his fortune on a variety of software products. He himself was never a computer geek, but was the marketer and business force behind the products. His first venture was selling printer software his business partner developed. They snagged a huge client, Hewlitt Packard, and with that deal they were earning royalties on every printer sold. Later he developed and marketed educational software packages.

Throughout the book he preaches the message that the only thing that really matters (when it comes to business) is money. One story that comes to mind is when O'Leary is trying to get their educational software on the shelves at Wal-Mart. Wal-Mart is absolutely ruthless when it comes to giving up retail space. Being the best low-cost provider of consumer goods in the world, everything comes down to the dollars and cents.

When O'Leary met with a Wal-Mart executive to talk about putting their software on Wal-Mart shelves, the executive told him that he would put his product on the shelf if they could sell it for $30 a unit. O'Leary said they currently sold it for $60 and that it wasn't possible to cut the price so low. The Wal-Mart executive said it was going to either be tube socks or his software sitting on his shelves and that every inche of shelf space was precious. If he wasn't willing to cut the cost then his software wouldn't enter their stores and the meeting would be over. O'Leary and his team ended up developing a version that could sell for the price Wal-Mart demanded and they ended up selling millions of units.

Business is a tough environment and it takes a thick skin to thrive in it. O'Leary had been very successful at it and has a keen eye for value. He makes an important point that money although crucial in buisiness, isn't everything in life and that money can really only buy you two things. The first thing is the freedom to do what you want and never be bossed around. The second thing that money can bring is the ability to help others. Other than that money can't replace the things that bring us the most joy in life such as good health, friends & family, and valuable experiences. The cold hard truth is that we all have to make a living somehow and that the reality is money is a huge driving force in the decisions we make. We need to seriously contemplate what money can and can't do for us and know when to choose between our time, ambition and values. The Cold Hard Truth was really entertaining and definitely worth borrowing from your local library.