I have been devouring the book: Millionaire Fastlane by MJ DeMarco. I almost
didn’t buy it because I thought the name was proof of just another get rich quick scheme… Boy was I wrong!
This is not a book about how to get rich in the traditional sense, it is a book very similar in principle to the 4 Hour Workweek.
The Millionaire Fastlane challenges many of the traditional views of lifestyle/retirement planning and it advances the work of Tim Ferriss by poking even bigger holes in the concept of the American dream which can be summed up like this:
A “wealth in a wheelchair” philosophy.
That being said, the Millionaire Fastlane is proving to be my favorite book about business and lifestyle design since (you guessed it) The 4 Hour Workweek.
I want to spend some time disecting the book, in order to formulate my own fastlane plan and maybe help you along the way. Today, I am going to pull some content from the book and a bit of my own thoughts, specifically regarding DeMarco’s wonderful idea of “free” and “indentured” time.
Free and Indentured Time: A Better Lifestyle Equation!
Lifespan = Free Time + Indentured Time
According to DeMarco:
“Free time” is yours to spend as you please:
TV, a jog in the park, video games, sleeping, eating, vacation. If you’re like most, your free time is lumped on evenings and weekends, where time is not exchanged for money.
“Indentured time” is the opposite:
It’s the total time spent earning money and the consequences of that spent time.
When you awake in the morning, shower, dress, drive to the train station, wait, ride to work, and then work for eight hours—this is indentured time. When you spend your entire weekend “recharging” from the workweek, this is indentured time.
Indentured time is actual work and the work you must do for the work. Morning rituals, traffic, compiling reports at home, solitary “recharges”—whatever time spent earning a buck is indentured time.
If you won the lottery, you’d quit your job because indentured time is no longer required and is suddenly replaced with free time.
Money buys free time and eliminates indentured time. However, the irony of your free time is it isn’t FREE; it’s bought and paid for by your indentured time.
You enjoy a two-week vacation because it was paid for by a year of indentured time. You can relax with a cold beer for an hour on the couch because you paid for it earlier in the day with eight.
My 2013 Goal is quite simple: Increase my free time and decrease my indentured time. Or, completely eliminate my indentured time altogether!
Time to invoke the 80/20 rule:
A viable option? Change the ratio of free to indentured time: 20% indentured time for 80% free time.
“If you were born into slavery, your life would be 100% indentured time with 0% free time.”
While total time can’t be manipulated, you can manipulate your time ratio. If you can steal free time from the hands of indentured time, life will have more of the “right time” versus the “wrong time.”
What I did:
Five years ago I reduced my hours at work by cutting a day off my four day, twelve hours per day, indentured time workweek. I did this out of respect to a new commute and I also wanted to create some mental space in order to pursue other passions.
I needed (and wanted) to keep my day job, but I was out of balance. reducing my indentured time to 3 days per week, gave me a 3 for 4 trade which weighted the cards in my favor.
I personally felt wonderful about my decision but I had to overcome a certain amount of initial guilt that was a result of pandering to my jealous critics. And trust me there were (and still are) many critics.
Critics often make assumptions about “free time” that fit their consumerist mindset. Free time is not idle, wasted time and this is something most people just don’t understand. They also have a very low value of their time, which places an equally low value on their life.
How to Define The “Real Price” – A Real Price Equation
Real Price of any item = Indentured Time
We tend to define the cost of an item by it’s dollar amount. By doing this, we can easily overlook the true cost, which is a variable of our time.
The equation would look like this:
Item price (dollars)/per hour salary (dollars) = X hours + (X hours * percent interest if financed) = Y hours
You can then take Y hours/hours worked per day to figure out how many days of indentured time this item is going to cost you.
Here is an example
In this example we will use an $4,000 item purchased by our indentured subject who is working for $10 per hour and the item is financed at 10% interest. Our subject works 8 hours per day.
$4,000 / $10 per hour = 400 hours + (400 * .01 interest) = 440 hours / 8 (hours per work day) = 55 DAYS of indentured time. OUCH!
Of course this only applies if your primary source of income is derived from indentured time.
Let us not forget that most of us working folk must also pay the government before we ever will see our ten dollars per hour and that will make matters even worse!
What is The Greatest Threat to Free Time?
According to DeMarco (and me) it is Parasitic Debt!
Parasitic debt is everything you owe the world. “It is the excrement of Lifestyle Servitude.”
What are some examples of parasitic debt?
- Your shiny new car financed at 60 monthly payments.
- Home mortgage financed over 30 years.
- Fancy designer clothes four months removed from out-of-fashion, and yes, even that insidious furniture that seemed like such a good idea at the time.
All of this crap creates servitude and forces indentured time. When you’re forced to work, you limit choice, and limited choices close roads.
The leading cause of indentured time is parasitic debt.
Surely you’ve heard the phrase” thief of hearts.” When it comes to parasitic debt, it is the “thief of lives.” Parasitic debt is a gluttonous pig that gorges on free time and shits it out as indentured time.
Any debt that forces you to work is reclassified from free time and shifts it to indentured time. Debt needs a constant drip of blood, and that blood comes from your gas tank of life: time. And since time is fixed, an increase in indentured time comes from only one source: your free time.
The next time you buy some fancy gadget on credit, know exactly what you are buying. You’re buying parasitic debt that eats free time and excretes it into indentured time.
How to Control Parasitic Debt
Avoid instant gratification, and understand the consequence of debt: indentured time!
Things that are sure to DECREASE indentured time
Prior to 2009 my income stream looked like this:
- Corporate job
Fast forward to 2013 and now my income stream looks like this:
- Corporate job
- Online revenue stream (content systems)
- Affiliate sales
- Product sales
- Advertising revenue
Changing the ratio to my favor
Right now my job is still my largest income source. I make pretty good income working as a PA so this may prove hard to beat. But, and this is the most important thing to understand, my income source “job” favors the category of indentured time.
Lifespan = Free Time + Indentured Time
Current Income sources in relationship to time
- Online revenue stream
Analyzing this equation
I want you to know that unlike many of my friends I don’t hate my job. A career in medicine, especially a career as a PA is wonderful. I love my patients, and I love my practice. But, working for a corporation is a form of lifestyle servitude. I have very little control over my time.
Income sources that increase indentured time should be carefully scrutinized for their value. Any source of income that increases free time should be considered of utmost importance.
Adding to the Free Time equation
I have spent the last week staring at this equation and running through ideas to skew the balance further in my favor (I have also watched way too many episodes of Shark Tank).
I have realized that in order to consider an idea worthwhile it must pass this test: It must increase my income and it cannot add to the column: indentured time.
I immediately threw 2 of my ideas out the window.
A friend once told me the key to becoming wealthy (both in spirit and in money) is to find a need and fill it! Pretty simple right?
There are many ways to provide wonderful value to people and DeMarco’s book has helped me clarify these options in a way that resonates deeply with me.
Value in relation to time, this my friends is the currency by which we should base all of life’s decisions.
Not everyone in this world can be a producer, but if you have read this far I assume you are. The millionaire fastlane requires a change in mindset, now I only have to remove the barriers of fear that stand in my way, and convince my family that these “barriers” are far less fear provoking than life in the prototypical “slowlane”.
Wealth in a wheelchair is no longer an option and it is time for some drastic change!
Next Post: a 2013 plan for attacking and eliminating indentured time!