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The Highest Probability Lane to Get Rich
Level 2 - Value Investor
Note: if you’re new here it is wise to read the whole post. If you have been around a while read part 3 carefully.
Many of you have probably heard of Felix Dennis “How to Get Rich” and MJ DeMarco’s “Millionaire Fastlane”. We know this as many of you have actually come from the Fastlane forums or even from the really old days of “Stack That Money” (now defunct).
Anyway. While people will argue the principles are the same, we’d suggest that there are new lanes being added to the highway. You can try to go for extreme wealth (best of luck and hope you make it!) or you can go for the highest probability lane.
We’ll explain this using small concepts from all of these older personal finance books.
As a hint, if someone is a celebrity, pro-athlete or Stephen Hawking type genius… it would be wise to ignore all of their advice. The reasoning is simple “How replicable is this?”. We all know it isn’t replicable and you’re better off finding people who made it with no apparent gifts/talents that were in the 0.001%.
While you might be 7 feet tall (giving you a ~16-18% shot of playing in the NBA just on that stat alone), the reality is that the majority are not like that. They are not extremely (outlandishly) talented in a niche field.
If you are professional athlete, musician or theoretical physics level talent… You already know and none of this matters. Follow the path the world gave you.
On that note, the typical person likely falls into what we call the “Porsche Lane”. You got enough tools to get to Wealth but are smart enough to realize a little bit of luck is needed for you to really hit max scale (in number terms we do believe anyone following us who is smart can get to $5M+ and anyone with some luck to that $10M+ which puts you into the top 1% or so - again rough math and assumes you will be under 50 at that time).
Part 1: The Internet Changes Everything
Summary of the FastLane on YouTube (Source)
We’re going to start here. “The Millionaire Fastlane” was published in 2011 by MJ DeMarco. We’re not going to go through the whole thing as it is an easy read or you can watch the YouTube link to get the summary.
The main problem is that this is largely outdated. The options are basically: 1) being broke obsessed with status goods and debt, 2) being a corporate grind bean counter type - eventually retiring at 60+ and 3) the Entrepreneur that risks it all to try and go from 0-150mph ASAP.
This is no longer the case. There is a new lane that we’ve dubbed the “Porsche Lane”.
The Porsche Lane
This lane? The one the vast majority of our readership should take. During the Jungle anniversary we were slammed with people making $500-$10,000+ a month online as a cartoon. The problem? We can see people jumping the gun.
We’re calling it the Porsche-lane for a lot of reasons. While we don’t own a car (no need when you’re homeless), if you know a lot about cars the Porsche is actually extremely reliable! That’s right.
It’s in that weird spot where it is a luxury car and yet reliable. You could throw in Lexus as well but we all know Porsche has more “pull” to its name.
Explaining How It Works: You put one foot in the slow-lane. The slow-lane has a little bit of fast lane juice to it since you are collecting stock/commissions/annual bonuses that are based on performance. Step 1 is set.
It is still the slow-lane and you can see 1/1,000,000 people flying by in the Fastlane. Great. Just like any wise person you’re not going to slam into the Fastlane until you’ve picked up enough speed. Think of this as merging into traffic on a freeway.
Would you do this going 10mph? No. Not unless you want to risk your life. You wait until you’ve at least accelerated to +/- 5-10mph of the highway speed at minimum.
As your first performance review comes in you should be well liked but not number one. Now you put your porsche into cruise control going the speed limit + 5mph. You’re seen as a better performer than most and slowly get moved up.
They don’t need to know you put the cruise control meter on.
What is the Cruise Control Meter: The cruise control meter only goes on if you can shift two gears: 1) gear one is making the best revenue generators like you. This has nothing to do with performance. If your performance is the same as your peers the entire game is being “well liked” which varies based on the people you work with. A little luck is needed of course and 2) the second one is recognizing *what* makes the money for the firm. This is where we see a lot of A+ Ivy League students stumble.
Does it really matter if you use diluted shares from a 10-Q instead of spreading the options table? Does it really matter if you use a white text box from paint to cover up some mistakes in a slide deck? Will anyone notice if you’re pretending to be on those conference calls where you’re listening to the head of the group talk?
In short, does it matter if no one notices? Of course not.
In the end, if you’re well liked (in any company in the world) small things like having an extra phone can go a long way. If you don’t believe this DgenFren the meme artist for the jungle started by working off his phone. Now he earns 6-figures. As a crypto focused meme maker.
Now You’re Driving with One Hand: At this point you’ve “done your job”. Most people get to this point and simply use it on the following: 1) alcohol binges, 2) drug binges, 3) entertainment like sports stats, celebrity gossip or even looking at mansions on Zillow/Redfin that they can’t afford and 4) the worst possible one is buying a Gucci belt when you can’t even afford a custom-made suit (hint this is common).
Not you though!
You bought a nice porsche that *can* go fast if it needs to go fast. The question is when. While your peers are partying in cruise control you’re riding extremely close to the left lane on the highway. You are driving while looking at the mirror 20% of the time, that becomes 40% and eventually you see a gap and you’re gone.
When Are You Gone? You are gone when your online biz is generating about 2x what your could earn at your W-2 (post-tax). You hit the gas swerve into the Fast lane and disappear for good.
For those on the paid stack you have all you need to start right here:
Ecom Intro - Source
Zero to Hero Newbies - Source
Build Audience from Zero - Source
Choosing a niche - Source
Ad Breakdown - Source
Here is a good way to see how the earnings will work. As you can see we have no idea when you will “do well”. If you’re a cartoon deer and a cartoon gator apparently it takes six months. If you are a cartoon monopoly guy on Twitter apparently you have to learn the hard way (get destroyed) then come back later in life to make it all back. There is no “timeline” and you have to break away from equating time = money.
If it doesn’t make money when you’re sleeping it is a time for money exchange. Remember this!
Before moving on. No this is not “linear”. Some people hit it big their first 5 years. some people don’t hit it big until they are 50. The key common denominator is how much self-belief you have while the #1 guy who sucks up to everyone gets that 15% raise while you get the 8% raise. That’s the price of success.
Note: For those that have read “How to Get Rich” most gloss over the part where he says he accumulated too much! He states that around $30M he would have stopped and focused on poetry instead. Instead of deciding it was enough, he was chasing the dragon. Money is the biggest drug on earth. And. If you forget the purpose of it you end up losing the most valuable resource you have: Time.
As a note, the implied message here is that we think (biased of course) our strategy gives you the best shot to top 1% wealth but unlikely gets you to billionaire status without a ton of luck.
With the internet start up costs are next to nothing now. You can build while pressing buttons on a keyboard. You can have one foot in both lanes. And. Guess what? We’d bet practically everything that you’ll be able to do a lot less than you think while maintaining a “high-performer” review.
Part 2: Quickly Killing the Excuses
Most say you’ll go bankrupt since “90% of businesses fail”.
Well, in reality, it only costs about $50K to start a biz and on top of that if you follow all of our old school methods you know that the majority make the following mistakes that waste time: 1) hey bro LLC or S-corp, 2) what logo should I use, 3) what colors should I use, 4) how important is the name and 5) I don’t know man $10 a month for hosting is risky.
All of this is a complete waste of time. If you’re really low risk (we started out extremely low-risk you could just learn to sell - copy writing and sell that as a service) or you could do the smart thing - by passing our own stupidity - and just test the demand.
Here is a good example for DropBox before they even created the company or product.
They made a fake demo and posted it (source)
But BTB I Can’t Do That! It Isn’t Right! Well, good luck then. If a public company did this to start… you’re really reaching for the excuses.
We will bet the house against you. There is no point in creating a product no one wants. If you have a checkout that has a “404 error - product out of stock” you’re not hurting anyone. Read that carefully.
Have you ever tried to buy something only to find out it was out of stock? Of course you have. Did you blame the company? No. At worst you got annoyed and in many cases you *wait* until it comes in stock! Ironically by having a “out of stock error” you’re building in demand. (Hint: we can *almost* guarantee a lot of your out-of-stock clicks were fake anyway! Now we’ve sent everyone for a swirl!)
Did you take a penny from anyone? No.
Did you lose a few bucks on running ads and paying a processing fee? Probably.
Now ask what is worse. Spending $100K on inventory no one wants or spending $5K on ads to find out you need to order $1M in inventory since it is in high demand.
You know the answer.
Again. You are taking $0. You are just collecting data to see if it is worth pursuing.
Part 3: Get Ready to Grind - The New Economy
For those that have been diligently following the aforementioned plan?
That is your best bet for success (probability wise). No need to be a celebrity, pro-athlete, musician, super model, genius or even a top performing employee.
The bad news is that the money sloshing around is coming to an end. This should be crystal clear. If you’re working online and already “made it”. You know that sales are flat even for great niche businesses. The vast majority are down. While you may be thriving (great!) the reality is that the majority are flat to down (broadly).
What does this mean? It means the consumer is getting weaker due to higher costs of food, water, electricity, gas, housing and all of the negative externalities from money printing. The bigger problem is this. People are still borrowing money!
If this trend continues it’s going to be really tough to know what your real “run-rate is” on an annual basis. Similar to our opinion that you should hold on to dear life for your W-2 (another couple weeks should be good), you should *also* be extremely wary of your online income.
To put some numbers on it. Can you sustain a -20% top-line drop?
If we know that people are borrowing against their homes to fix/flip and other pipe dreams, we know that the second half of this year won’t see a great consumer economy. This is just how things work.
You get to borrow to buy time… but those interest payments add up and the stress kicks in. Look no further than the reality plaguing Twitter to understand the psychology there (source)
Woah woah! See that in 2002 and 2009? That is when the bottom fell out the last two major downturns and revenues went negative for the S&P 500. Notice. Even when the economy froze temporarily in 2020 it didn’t even result in a revenue drop comparable to the tech crash!
Do some Quick Math: If the S&P is doing okay right now there is risk that we have a -5-10% revenue decline year (yes it is possible). That would mean the second half of the year is worse than the first.
Also. If you are a small business you should know that it can go down or up 2-3x the industry average. If your industry typically goes up or down 5-10% expect a 10-30% swing (good or bad in any particular year).
What to Do? As usual, we try to look around the next few steps. If you’re “close” to exiting your white collar prison, we implore you to pause and wait until *after* the fed stabilizes.
Several of you messaged us saying you’ve practically hit the bench-mark but that is on inflated numbers. You have to recognize this.
Similar to people who owned moving companies or appliance companies in 2021. How many times do you move per year? Usually not all at once so that 2021 number is overstated.
Currently? All of your earnings are overstated.
On that note you should get the jist. Have enough ammo to understand what we’re getting at. Until then, keep that hand on the driving wheel (one arm and relaxed in cruise control).
Oh and by the way.
Capo was right. (yes this is just a joke for people who get it)
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