Want To Be a Millionaire. Here Are Two Different Ways To Get Rich

Wealth In A Wheelchair: “Get Rich Slow” is Get Rich Old

Normal is not something to aspire to, it’s something to get away from. — Jodie Foster

The story’s subtitle and the quote are from the book “The Millionaire Fastlane” by MJ DeMarco. I couldn’t have written it better. So, I decided to take it as is.

I am currently following the get-rich slow strategy. Which, by the way, I realized after reading this fantastic book.

There is nothing wrong with this strategy, except that it’s a slow lane to wealth. But, what is slow?

Is being rich in your 60’s worth it?

As per the author, if it takes you your entire life to get rich, then you are following the get-rich slow strategy. Arguments from the author are straight, harsh truths.

MJ inspired me to think big, solve a problem for millions, earn millions, and retire. Of course, the whole process will take 4 to 5 years combined with 100 hours of work per week. But, the idea is to trade 5 years of hell for 30 years of heaven.

But, get-rich slowly can also be a successful strategy for many. Here the idea is to trade 10 to 15 years of mediocrity for 15 years of heaven.

So, it is up to you to decide which strategy fits you. Which road do you want to travel?

It should be a conscious decision, as both roads require dedication and persistence.

Let us define “rich.”

Before I go around and talk about get rich slow or get rich fast strategies. Let me first define the word “rich.”

By “rich,” I mean you have a passive income source that satisfies the following criteria:

• it is enough to pay your monthly bills
• you don’t have to work to earn it

#1 Get rich slow strategy

As I am currently following the get rich slow strategy. It makes sense to discuss it first.

It is a straightforward strategy based on two principles.

#1 Earn more and spend less

Saving money is the key to this strategy. Irrespective of how much you earn. You need to save at least 10% of your net income.

The more you save, the better it is.

As human beings, we all have limitless desires. Unfortunately, after spending all our income to satisfy our longings, we still have many unfulfilled desires.

Thus, to fulfill them, we take credits and loans. Still, hundreds of desires remain unsatisfied.

So, why not use 90% of your income to meet your desires. And let the desires you cannot fulfill be part of hundreds of other unfulfilled wishes.

The biggest sacrifice here is that you have to let go of the current pleasures of life in the hope of a better future after 15 years.

The biggest risk is you do not know how your life and circumstances will change in those years.

#2 Invest the saved money where your principal is safe, and you get a fair rent or return

Once you start saving at least 10% of your income, you must use that amount to invest.

Your risk and return will vary based on where you invest your money.

Assuming most people who opt for the “get rich slow strategy” are full-time workers like me. Thus, they cannot take investing as a full-time job.

In this scenario, Warren Buffett says, people should buy low-cost broad market index funds like S&P500.

The reason is simple, picking stocks is a lot of work and takes time. Unfortunately, people do not have the time or the will to do the work required to pick a stock.

Thus, buying broad market indices is a logical choice.

The biggest sacrifice you make is low returns on your investment.

The biggest risk is you might end up losing money. The probability is low, but it exists.

How does the strategy work?

As per this strategy, you invest a part of your income consistently. You do not touch it for at least 10 to 15 years.

Then, by the end of 10 or 15 years, you would have built a sum that can support your expenses without you working for it.

Major flaws of this strategy

The strategy is simple, but it has many flaws and risks.

• Fundamentally flawed: You cannot predict what will happen the next day. So, predicting things 10 years or 15 years down the line is fundamentally flawed.
• Changing personal situation: Your situation will change with time. You may get married or have kids or find yourself in some emergency. Life is unpredictable! Thus, to keep investing consistently for that long needs some serious commitment.
• Stock market’s see-saw: The stock market goes down more than 20% from time to time. Thus, there is a possibility that by the time you want to cash in, the market is in red.
• The unknowns: Pandemic, real estate busts, frauds, war, etc., are the unknowns no one can predict. And we all know what happens to the stock market when such uninvited guests show up.

Things you can do to minimize the risk

• Diversify: Good old advice. Do not put all your eggs in one basket. So do not invest only in the stock market. Explore other avenues like real estate, commodities, crypto, NFT, art, etc.
• Paid memberships: there are many good paid stock recommendation firms. Take membership of one of them. You don’t have to follow their tips blindly. But, they can offer you good insights into companies. These insights are worth every penny you spend on the subscription. I am a proud member of Motley Fool community and highly recommend joining.
• Read: From reading comes knowledge. From practicing that knowledge comes wisdom. Thus, read and apply what you read. Time is changing faster than ever before. And the pace of change is only going to increase as technology advances. So, staying up to date is crucial for your success in the investing world.

Why are most people inclined towards this strategy?

If there are so many flaws and risks in this strategy. Why do most people follow this strategy? Here are some of the reasons:

• First, you don’t have to leave your comfort zone. You can continue doing what you were doing before.
• The effort you have to put in is minimal to none compared to the get rich fast strategy.
• You can automate the strategy in your trading platform.
• It doesn’t require you to learn new skills.
• The crowd mindset comes into play. Everyone is doing it, so it must be the right way.

In short, it’s the easy way when you look at it from a bird’s eye view. But, when you start the journey. Then, the hurdles and challenges start knocking on your door.

To wrap up

Like any other path, the path to “get rich slow” is not straightforward. There are many known and unknown hurdles.

So, you need to adapt as you walk this path.

But, it is a strategy that has worked for many and can work for you too. The key is to be consistent and patient.

#2 Get rich fast strategy

By fast, I mean within 5–6 years. It is a path most entrepreneurs, producers, or innovators take.

Get rich fast is based on two principles:

#1 Shift your mindset from consuming to producing

Moving from a consumer to a producer mindset is a big change for most people, including me. We are so used to consuming things that we never think of creating them.

There is so much content online nowadays. How much content have you created?

I was reading an article from Tim Denning. In that article, he mentioned that 90% of the people are only consuming content. Thus, if you create content, you are already in the 10%.

There are millions of mobile applications and websites. How many do you own?

There are infinite examples. But the takeaway is to start creating. Solve problems and add value to the life of people around you. This will be the first step towards becoming a producer.

But, producing alone won’t make you rich quickly. You need to select what you produce carefully.

To help you select, MJ has provided five commandments. These commandments make our second principle.

#2 Follow the five commandments provided by MJ DeMarco

The commandment of CONTROL: You should have complete control over the business you pick. Complete control means you can decide about every aspect of your business. For example, what product feature to develop, what price to sell the product, etc.

For example, if you are creating videos on YouTube. Then you are not in control. You are at the mercy of YouTube. YouTube decides whether to play advertisements on your video or not.

YouTube can change its policy or algorithm anytime. And that change might impact your revenue positively or negatively.

Thus, do not fall into the “I am my own boss” trap. Because in reality, you are working for these big platforms like Amazon, Medium, Etsy, etc.

The get-rich-quick individuals create platforms instead of selling on them.

The commandment of ENTRY: As per MJ, entry into a business should be a process and not an event.

If you can start your business by simply creating an account in 2 minutes. So can others. Hence, making the market saturated, decreasing the profit margins, and increasing the competition.

To thrive in such a market, you need to be the best.

Continuing with the example of YouTube. Top YouTubers are earning good money, i.e., million dollars per year. But, YouTube is making great money, i.e., billions of dollars per year.

To give you another perspective. As per Business Insider, only 12% of channels are eligible for monetization, and 0.42% make decent money on YouTube.

I believe you understand the importance of the commandment of entry.

Think it over. What is easier; to compete with 1 million or 100? Difficulty to enter a market reduces competition.

The commandment of NEED: When we start our own business, the motivation behind it is selfish. We want to make money or be our own boss or do what we love or something else.

But, customers don’t care about your selfish desires. They are not there to serve you.

You have to identify the need, serve it, and customers approve it by paying for it.

Thus, instead of chasing money, chase needs.

As per MJ, the reason behind the failure of 90% of businesses is not that they are difficult to run. It is because they are chasing their selfish desires instead of customer needs.

The commandment of TIME: Another common pitfall is to create your own jail. Many people start their business thinking they will be their own boss.

But, they end up in a rat race similar to a job. In reality, even worse than a job.

For example, if someone opens a small takeaway restaurant. They have to be present from 8:00 in the morning to midnight.

They cannot close the restaurant and take holidays as money will stop coming for that time. They cannot hire someone to replace them, as profit margins are thin.

Thus, they end up creating their own jail.

While choosing the business, it is essential to consider how it could run without you or with minimal input from your side.

Of course, at the beginning of the startup, you will be devoting 100s of hours every week. But, the strategy to automate or exit it should be clear from the start.

For example, photosharing platforms like Shutterstock, Unsplash, etc., are mostly automated. Creators can create an account and start uploading content all by themselves.

Similarly, consumers can subscribe and download the content all by themselves.

Yes, you have to maintain the platform. But, it will not require you to spend 12 hours every day.

And the subscription fee will keep coming in, even when you are sleeping or traveling.

The commandment of SCALE: The final commandment is your business should be scalable. The logic behind it is simple. Affect millions and earn millions.

For example, a burger shop owner has a limited reach. He can target the people living in that area. At the same time, the maximum number of burgers he can humanly sell is also limited.

Thus, this business does not follow the commandment of scale.

On the other hand, if the burger shop owner opens or sells franchises of 20 other burger shops in different locations. It increases its reach and the number of burgers it can sell per day. This is what operating business at scale looks like.

Internet businesses can target the whole world. Thus fall under the category of one of the most scalable businesses out there.

Scale is an essential factor to consider before starting a business.

If you can sell something at a profit of $10 to 1000, you will earn $10k. If you can sell it to 1 million people, you will make $10 million.

The possibilities are limitless.

To wrap up

Before starting a business, validate your business idea against these commandments. The more commandments your idea aligns with, the better it is.

Consider playing the game where you can score home runs as you need to score only once. But, if the game you are playing does not allow home runs. Then, you can never score one.

It is not easy to score a home run. You have to work like no one to live a life as no one lives.

Which strategy to pick?

There could also be other strategies to get rich. But, if you decide to pick one from here. It can only provide you with some guidelines.

So, you have to find your own way.

I am currently following the get-rich slow strategy. But continuously exploring ideas that meet the five commandments.

So, before you decide to go into a business, know what you want and which strategy you are following.

Don’t be delusional that opening a business means you are your own boss.

I hope you enjoyed reading this article. If you did, then help Master Investment grow by sharing it with your friends. If you are looking for ways to support me. Well, buy me a cup of coffee from here. :-)

Disclaimer: I am not a financial or tax, or investment advisor. I am sharing my personal views on the topic. Hence, please do not consider it financial, tax, or investment advice.