My Comparative Review of Slow Lane vs Fastlane
Back in 2006-2007, I was a graduate student at Ottawa University, and I was managing my money very closely. My professor paid me less than $800 monthly as the research assistant salary, and that was all I had to cover my living expenses. Every weekend I would do a lot research on supermarkets flyers and visited multiple stores to do grocery shopping from only products on sale. I made most of meals by myself even though I was a lame cook, and dinner at the food court of Rideau Center was considered a treat. At that time, one of my definition of being rich is I can buy anything from the supermarkets without checking the promotional price. Pretty huge ambition, huh?
With that ambition I worked quite hard and finished the 2-year program in 4 semesters and landed a job soon after. Even though it was an entry level job, my financial status was significantly improved and I felt I had fulfilled my great ambition. Flyers were no longer a must-read before grocery shopping and eating out was a norm. Let alone I could gladly buy the many things to please myself, e.g. clothes, cosmetics, handbags. You name it. I've always been buying more and there will always be more I want. And not to mention the big mortgages for the house and cars. My husband has always been keen on cutting cost and I didn't give a damn. I worked my ass off to earn the money, what's wrong with spending it on things I like to make myself happy?
I only start to seriously learning about financial management from this reading session. I read both books, The Millionaire Fastlane by M.J.Demarco (Fastlane) and The Simple Path to Wealth by J.L. Collins (Let's call it Slow lane below for simplicity). Not to judge which approach is better, I wish I had read either one 10 years ago. Either going with the traditional approach to minimize spending and invest savings, or going with a producer's mindset and fully committed to entrepreneurship, I would be in an enormously better shape of personal finance than today after being financial illiterate for over a decade. I'm not even in the position to feel I am on the wrong lane, as I am awakened in horror that I am the side walker that being indulged in instant gratification and risking the future. However, I am gracious that I am awakened now, rather than another 10 or 20 years later when it's too late.
I don't plan to go into the details of the books. The 2 propose very different approaches and I think both are worth reading. I would like to highlight my takeaways through comparison.
Common advice from both approaches:
Avoid debt as much as you can. (Unless it's for a business that meets the fastlane criteria to grow)
Don't over spend. I like this quote from Mr. DeMarco, "If you need to think about if you can afford it, you can't".
Don't live by paycheck. Have a plan and be committed.
Financial independence gives you true freedom.
Differences:
The slow lane recommends maximize savings and put them into low cost index funds. Wealth accumulation is achieved through long term (30+ years) compound interest aggregation.
The fastlane author argues that the slow lane approach has Uncontrollable Limited Leverage. There are many factors required to guarantee the success of the slow lane approach, e.g always being employment to generate the stable income, being healthy enough to live that long, investment market does not clasp. In contrast, the author believes there is a higher chance to succeed to get rich fast within 3-7 years by starting a business where one can take full control and accountability.
M.J.Demarco pointed out that the first thing to switch to the fastlane is to "quit your job". I don't think I'm ready for that, after all it is not that easy to stay away from mediocrity. But I believe there can be a sweet spot between the 2 lanes. If the slow lane job meets with your passion, then you're working for fun rather than just paychecks, and working on it at longer hours should not be a pain. Quitting the job is tough to do, but we can start from shifting from consumers' mindset to producers', which will open many doors and help we see fastlane opportunities.
Whichever lane to take, the key is to take control of our own financial stats, take control of our own life. We've got to start somewhere.
