by MJ DeMarco
Math is law.
“Secrets” and mystical philosophies are not.
If you want to get rich, start observing the true law of the universe—MATH—and not some hocus-pocus law that can neither be proved nor documented. Singing positive platitudes around the campfire isn’t going to make you rich. Oh, don’t get your panties in a wad; I know the Law of Attraction sounds great and has practical applications.
For those not familiar with The Law of Attraction (“LOA”), it’s a mystical philosophy that states you become what you think and that your conscious and unconscious thoughts make your reality. The LOA contends that if you know exactly what you want, ask the universe for it, see it coming, then you will eventually receive it. Think riches and you will have riches! Sounds easy, huh?
I won’t hide my candid sacrilege to the LOA crowd; I think it’s a bunch of baloney orchestrated to sell books to those who think “thinking” will make you rich. In fact, the LOA is nothing but old principles of belief and visualization repackaged and remarketed for mass consumption. Who are the true Fastlaners? The LOA marketers!
Bake a Cake Without Sugar?
Why did this book take me so long to write? I spent two years wishing and thinking positively about it. I let the Law of Attraction do the work. I asked the universe for this book. I was open to it. I saw it before my eyes. I even snapped a picture of a bookstore shelf and Photoshopped my book on the shelf. What happened?
Absolutely nothing. Nada. Zilch.
The universe never gave me my finished book. The fact is, despite all my positive thinking and meditations to the universe for my book, it never materialized until I sat my butt down in a chair and started to write it. I made a coordinated commitment to ACTION, a conscious choice, and then a commitment to that choice in the form of massive action.
If you’re a Law of Attraction fan and find this critique offensive, that’s OK;
I didn’t write The Millionaire Fastlane to make friends or to book speaking engagements about being a positive thinker. I wrote it to tell you exactly what you need to do to set yourself free. Thinking never made anyone free (or rich), unless that thinking manifests itself into consistent action toward application of laws that work.
In fact, I find it insulting that someone might assume my success is due to positive thinking. I’m a realist who understands human nature, and that nature is to take the path of least resistance. It doesn’t surprise me that these “attraction” books sell millions. The books that promise the easiest roads to wealth do well because, like sex, easiness sells.
Events of wealth sell. Process does not.
Yes, positivity is favored over cynicism. Belief is the starting point to change. Visualization is crucial. Yes, if you don’t believe you can do it, I’ve got news for you—you can’t. This stuff isn’t new, it’s OLD. While The Law of Attraction is a nice hammer in the toolbox, its flaw is that it ignores the real secret that transcends all wealth, all people, all cultures, and all roads—and that is the Law of Effection.
The “Flaw of Attraction” is that it ignores mathematics.
The Law of Effection: The Fastlane Primer
The Law of Effection states that the more lives you affect in an entity you control, in scale and/or magnitude, the richer you will become. The shortened, sanitized version is simply: Affect millions and make millions. (Grammarians, I can hear you screaming. Relax. I know the difference between “affect” and “effect.” I’m using “effection” as it appears in Webster’s Revised Unabridged Dictionary, published in 1913 by C. & G. Merriam Co., as a noun meaning “creation; a doing.”)
A while ago, I wrote an article titled The Shortest “Make Millions” Article Ever Written. Guess how long the article was? A paragraph? Maybe a sentence or two? Nope. Just two words. And those words?
Impact millions.
Impact millions and make millions. It doesn’t get any simpler than that!
In other words, how many lives have you touched? Who has benefited from your work, your assets, and your handiwork? What problems have you solved? What value are you to society? If you’re working the front desk at a hotel, you simply aren’t making much of an impact, and your bank account will represent that same fact. The amount of money you have (or don’t have) is a direct reflection on the amount of value you have provided (or not provided).
Effection Is Scale, Magnitude, or Both
To exploit the Law of Effection, your business needs to make an impact of either scale or magnitude, or both. Within our Fastlane wealth equation, “scale” and “magnitude” are implicit to our “net profit” variable.
NET PROFIT = Units Sold (Scale) × Unit Profit (Magnitude)
An example of SCALE is reflected on our Fastlane roadmap via the profit variable in our wealth equation: units sold. If you sell 20 million pens and make 75 cents profit on each, you just earned $15 million. This is having an impact on SCALE with tiny MAGNITUDE. Obviously, selling a writing pen doesn’t have a major impact on anyone’s life. The wealth is transmuted via SCALE, not magnitude.
Conversely, magnitude is having a great impact on a few and within our Fastlane wealth equation is reflected in UNIT PROFIT. Price always reflects magnitude. If you sell a product that’s worth $50 million, you have access to magnitude. For example, if you owned an apartment complex with 400 units and profit $100 from each unit, you’d generate $40,000 in monthly income. Because you are providing housing for 400 families, you are making an impact of magnitude, not scale. Shelter has magnitude. Activities of magnitude have higher profit potential with smaller scales. Magnitude is always reflected by an item’s price. High value = high price = high magnitude.
If you can combine both scale and magnitude, we won’t be discussing millions but billions. Steve Jobs made an impact on both magnitude and scale and therefore died worth billions.
Scale creates millionaires.
Magnitude creates millionaires.
Scale and magnitude creates billionaires.
Follow the Money!
Unfortunately, the word “law” is loosely tossed around to represent concepts that aren’t really laws. The Law of Attraction isn’t a law but a theory. The word “law” is absolute. It works 100% of the time. When you drop a watermelon from your tenth-floor dorm window, the Law of Gravity takes over—the watermelon falls to the ground every single time. The outcome is a 100% certainty.
Unfortunately, positive thinking and visualization don’t work with 100% certainty. Belief and manifestation aren’t absolute so they can’t be classified as laws. However, the Law of Effection is absolute.
Show me any self-made billionaire and I will show you a person who has touched the lives of many in scale or magnitude, directly or indirectly. To Woodward and Bernstein, Deep Throat said, “Follow the money,” and when you do, you find the only one true law of wealth, and that is Effection. Why? Because Effection is rooted in mathematics, and because of this it operates exclusive of any roadmap.
A Slowlaner can use the Law of Effection to escape Slowlane confinement. Pro athletes, actors, and entertainers—intrinsic value explosions happen because of the effection: Society suddenly perceives your value to be meteoric. Yes, these people are still trading their time for money, but in an unprecedented stratum of value.
For example, if you’re a comedian and make millions laugh, you undoubtedly will make millions. While you might still be trading your time for money, you’re trading it at a profound level of compensation. If you entertain millions, you will be paid millions.
A rapper sells millions of songs and is paid millions. A housewife sells a million kitchen gadgets and earns millions. A lottery winner wins millions because millions entered the drawing. Daddy Warbuck’s son inherits millions because Warbucks Company served millions. A plastic surgeon earns millions because he serves many in magnitude. A star athlete’s agent earns millions because his clients serve millions. Retrace the source of millionaire money and you will find millions of something.
Effec
tion of scale or magnitude always precedes money, either directly or indirectly. The more lives you impact, directly or indirectly, the more wealth you will attract.
Big Wealth Follows Big Numbers
Athletes are a perfect example of Effection. If you play professional baseball, you’re paid a meteoric intrinsic value. In 2014 Giancarlo Stanton signed a $325 million contract. How exactly is that justified? Simple. The Law of Effection justifies all wealth. Giancarlo Stanton, via baseball, entertains millions. He leverages SCALE. This is the same for any professional athlete. They get paid millions because they entertain millions. The corporate executive who facilitates a corporation that services millions gets paid millions.
Again, these are glorified power intrinsic-value positions that leverage the Law of Effection. If you want to get rich via intrinsic value, you must do it via the Law of Effection. Get into a position to impact millions. Become indispensable and irreplaceable like an athlete, entertainer, or a top-brass executive.
Can’t get access to millions like an athlete?
Then go directly to the source and serve the source.
For example, agents of high-profile athletes are as rich as the athletes themselves because they have indirect contact to the Law of Effection. Real estate brokers who specialize in the homes of the rich become rich themselves because they indirectly connect themselves to arbiters of the Law.
The Law of Effection doesn’t care about roadmaps or time trades or anything but the mathematical power of large numbers. Make a giant impact a few times or make a small impact millions of times.
Joe Magnitude owns a company that develops commercial real estate. He develops 14 office complexes and partitions the offices into condos. Each fully sold complex profits him $400,000 (magnitude) × 14 (scale) equals $5,600,000.
Joe Scale writes a book detailing a diet of the stars. He sells 800,000 copies (scale) and earns $7 per copy (magnitude). He earns the same amount: $5,600,000.
The closer you get to the source of large numbers, the closer you will get to wealth. To serve millions is to make millions.
Think big to earn big.
Chapter Summary: Fastlane Distinctions
➡The Law of Effection states that the more lives you affect or breach, both in scale or magnitude, the richer you will be.
➡Scale translates to “units sold” of our profit variable within our Fastlane wealth equation. Magnitude translates to “unit profit” of our profit variable within our Fastlane wealth equation.
➡The Law of Attraction is not a law, but a theory. The Law of Effection is absolute and operates exclusive of a roadmap.
➡All lineages of self-made wealth trace back to the Law of Effection.
➡The Law of Effection’s absoluteness comes from direct access and control (you are the athlete) versus indirect access (you are the athlete’s agent).
➡To make millions you must serve millions in scale or a few in magnitude.
PART 6
YOUR VEHICLE TO
WEALTH: YOU

PART 6- YOUR VEHICLE TO WEALTH: YOU
[22] - Own Yourself First
Events and circumstances have their origin in ourselves. They spring from seeds which we have sown.
~ Henry David Thoreau
The Paralysis of “Pay Yourself First”
Fastlane success demands a well-tuned vehicle primed and prepared for the journey that awaits.
You are the vehicle to wealth.
You are impetus for action and progress.
You are responsible for the journey and the first step in taking charge of you, is to own you.
Surely you’ve heard “Pay yourself first,” a common Slowlane declaration born from the classic 1926 book, The Richest Man in Babylon by George Clason. A good read, but fundamentally flawed.
If you aren’t familiar with “pay yourself first,” it’s a Slowlane doctrine that urges you to save your money (pay yourself) before all else—food, gas, car payments, and other bills. This supposedly forces the Slowlaner’s savings rate to accelerate their putrid wealth acceleration vehicle: compound interest via market investments.
The fact is, advising a Slowlaner to “pay yourself first” is like advising a quadriplegic to climb a flight of stairs. It’s futile.
If you have a job, examine your last paycheck.
Is your gross pay that same as your net pay? It isn’t and for some, it might be 35% less or more. Additionally, pre-tax saving weapons such as 401(k)s and IRAs severely limit your contributions to infantile amounts where creating wealth on a pre-tax basis in a job becomes organizationally penal.
If your primary income source comes from a job, your ability to pay yourself first is paralyzed because the governments are paid first! For “pay yourself first” to be legitimate, you truly need to pay yourself first in infinite amounts and the government last. You must own your vehicle.
To Pay Yourself First, You Must Own Yourself
You can’t pay yourself first if you don’t own yourself. Your vehicle (you) must be free and clear. When you have a job, someone owns you. And when someone owns you, you aren’t paid first, but last.
The first step to controlling your vehicle—you—is to own yourself so you’re paid first and the government last. That is accomplished by forming your business into a corporation that you control.
The corporation serves as the Fastlane frame because it offers the immediate tax benefit of “pay yourself first” versus “pay yourself last.”
When you own a corporation, net profits are reduced by expenses. The remaining profit is taxed, and those taxes are paid to the government. Additionally, corporations exist separate from their owners and survive time. It’s the surrogate structure that serves as your business system.
When you own a corporation, the government (assuming USA) is paid four times a year, once every quarter through estimated taxes. If you have a payroll, taxes are paid each time you pay your employees. I pay myself first 365 times a year while the government is paid four times a year. Doesn’t that sound like a structure that is conducive to not only “pay yourself first” but also wealth?
How to Own Yourself
Like many entrepreneurs, I made the horrific mistake of getting into business as a sole proprietor. Any “adviser” who recommends a business structure as a sole proprietorship or general partnership should be avoided like an airport toilet. These entities are risky because they don’t protect you and catapult unlimited liability onto you and your personal assets.
If you’re a plumber organized as a sole proprietor and you accidentally leave a pipe cutter at a client’s house and the client’s three-year-old kills himself with it, guess what? They’re coming after you because you chose an ill-protected business entity. Instead of suing a corporation, they sue you and everything you own is up for grabs. Assuming a US-based business, the best business structures for your Fastlane business are:
(1)C corporation
(2)S corporation
(3)Limited liability corporation
Each has its advantages and disadvantages, but all share two common benefits: limitation of liability and tax efficiency.
The C Corporation
The C corporation is a business structure that survives time and can be easily transferred. Corporate profits are taxed at corporate income tax rates, with net income distributed to shareholders.
Some C-corp owners use this structure to deploy a strategy known as “income splitting.” The strategy is to partition the business’s income to both the owner and the business, effectively lowering the tax bracket of the two, versus a large income for just one. While it’s not within the scope of this book to dive into tax strategy and corporate formation, it does offer up a Fastlane component, which is control.
While C corporations and their owners are subject to double taxation (tax on corporate profits and dividends to shareholders), they are advantageous for larger corporations and corporations with an “asset growth” strategy.
In other words, if you don’t plan on distributing profits and are focused on building “asset value” over “net profit,” C corporations do the job. The majority of publicly traded companies are C corps that do not distribute dividends to their shareholders. They grow revenue and asset value.
The S Corporation
An S corporation is like a C corporation except that it isn’t taxed as a separate entity. Considered a “pass-through” entity, taxes aren’t paid at the corporate level, but at the individual level and reflected on the owner’s personal tax return. S corporations also have some tax advantages because profits are not subject to the hefty self-employment tax that comes with sole proprietorships. However, unlike C corporations, which can have limitless owners, S corporations are limited to 100 owners and will have additional filing requirements.
The Limited Liability Corp (LLC)
An LLC operates just a like a corporation with the benefits of a partnership or a sole proprietorship. LLC profit passes through to its owners, called members, and is reflected on their personal income tax. LLCs are also considered “pass-through” entities because profit passes directly to the owners. For partnerships, the LLC or the S corp is the recommended structure in lieu of a general partnership, which, again, does not offer liability protection.
For small startups, I recommend looking into either an LLC or an S corp. Personally, I steer clear from partnerships and sole-proprietorships, as they might not limit liability.
Creating a corporation is not as daunting as it seems. Depending on your state, it shouldn’t cost more than $1,000. In Arizona, one can be created for less than a few hundred dollars.