MJ DeMarco
I followed the science; all I found was money.
Staff member
FASTLANE INSIDER
EPIC CONTRIBUTOR
LEGACY MEMBER
Read Rat-Race Escape!
Read Fastlane!
Read Unscripted!
This is an excerpt from The Great Rat Race Escape , by MJ DeMarco
THE BAD MATH PRINCIPLE
Tell me what you do for work, and with near certainty, I’ll predict if you’ll ever escape the rat race.
How?
I simply look at the type of personal leverage you have, if any.
The Bad Math Principle reveals that every person stuck in the rat race is subject to unscalable and uncontrollable math, namely, no leverage. Truth is, every Unscriptee who’s successfully freed themselves did so through some type of mathematical leverage. And no, I’m not referring to business leverage such as investment margin or real estate loans. These are three rat race anchors that keep the Bad Math Principle active in your life.
ANCHOR ONE: INCOME AND WEALTH ARE CORRELATED TO TIME.
Carry a wage- or a salary-locus and the rat race will convince you that the only way to make money is to trade your time for it, either by the hour or the year. When I had a job stocking shelves at Sears, I only made money if I clocked in.
No work, no progress.
My income was limited by the hours I traded and the hours available, both uncontrolled and unleveraged.
Similarly, a respectable profession, say a manager, wouldn’t be paid by the hour, but by the year. Wealth creation is directly correlated to how much time you trade. If more money is needed, more time must be traded.
ANCHOR TWO: TIME CANNOT BE SCALED.
When you have a wage-paying job, your income is limited by the number of hours you work. Theoretically, the upper limit per day is twenty-four, but realistically, it is about eight to twelve. Likewise, if you are paid by a yearly salary, the same constraint exists: the theoretical maximum number of years you can work is just fifty or sixty. Realistically, it’s about forty years. Forty hours and/or forty years is what I call, bad math.
40 hours a week @ 20/hour = $800 a week
40 years of work @ $50,000 a year = $2,000,000 lifetime earnings
If time was scalable…
400 hours a week @ 20/hour = $8,000 a week
400 years of work @ $50,000 a year = $20,000,000 lifetime earnings
No matter how energetic you are, you can’t work 400 hours a day, or 400 years. Time cannot be scaled.
ANCHOR THREE: RAT RACE ECONOMICS CANNOT BE SCALED.
The rat racer’s reaction to these punitive problems is to seek a higher wage or a bigger salary.
In doing so, they will switch jobs, seek new careers, or even go back to college and blow a fortune on an advanced degree. Now, problem three stands in their way. Instead of being constrained by time, now the rat racer is constrained by rat race economics. Namely, excess supply, weak demand.
When a gazillion people can do what you do, you have no leverage.
You won’t make $20/hour one day as a short-order cook, and next week, you’re paid $1,000/hour because suddenly short-order cooks are in high demand and short supply.
If you earn a yearly salary, the same economics apply: if you make $60,000 this year as a transaction auditor for a drug company, you’ll never make $600,000 next year because suddenly no one can do your job.
Thousands of college graduates would be standing in line waiting to take your job. In both instances, you cannot control or scale dollars.
For example, let’s simplify our financial journey and assume your Escape Number is $5 million. In this scenario, you can safely save your money under a mattress, and there are no taxes or inflation. If it takes you 30 years to save $5 million, it will be just as valuable as it is today.
Let’s examine the math and see how poor leverage plays out in various careers and jobs. Keep in mind, these figures are BEFORE any taxes and presumes a generous 10% savings rate.
As you can see, if you make $31,200/year as a retail salesperson, expect to trade 160 years of your life to gross $5,000,000. That’s 41,666 eight-hour shifts every single day. Add life overhead (taxes, inflation, basic necessities), and saving $5,000,000 at a ten percent savings rate, you’ll need a cosmic 1603 years.
In other words, to amass a freedom-making fortune today, you’ll need a early fifth-century start, a time when Attila the Hun ruled. As you can see, driving the rat race with a wage-locus is a death sentence.
The news isn’t better with a salary locus.
Suppose you have a respectable job as an architect. In that case, you’ll need 574 years to save $5,000,000, assuming a generous ten percent savings rate. Perhaps the experts who push this method of getting rich consulted the Old Testament first—those Biblical folks supposedly lived to 900.
With a $87,000 salary, your best-case scenario is hardwired in the rat race system—and that scenario is mediocrity. Wage- and salaried-rats are stuck with what I call Uncontrollable Limited Leverage or ULL. And “ULL” means you’ll never escape.
Professional athletes and celebrities are one of the few professions that can disrupt ULL.
When there’s only one person on the planet with Lebron James’ skills, and everyone wants him for basketball or endorsements (low supply/high demand), Lebron James is not subject to Uncontrollable Limited Leverage. As such, he gets paid a leveraged amount.
This is why most people desire fame but don’t know why. Fame equals leverage and favorable economics. Who doesn’t want to make $5 million per movie, $500K per speech, or $50K per game? The human talent itself is the system of leverage, usually as an outlier skill, like pitching a baseball over 100 mph.
When it comes to average Joes like us, we have no such option. I’ll never sing, act, or play baseball.
If you want any chance of a rat race escape, Bad Math, or Uncontrollable Limited Leverage cannot be part of your existence.
The truth is, the Bad Math Principle isn’t taught at university.
It would never be revealed in some financial “stop drinking coffee” best-seller. Most educational sources promote bad math strategies: save a hundred dollars a month, invest for forty years, hope for eight percent returns, blah blah blah.
Numbers like 100, 40, and 8% doesn’t create wealth fast, it creates wealth old, or never.
Bad math handicaps wealth and becomes a bad offense.
A motivational quip might inspire you for a day or two, but if your numbers aren’t right, it doesn’t matter.
As they say, running enthusiastically in the wrong direction is, well, the wrong direction.
THE BAD MATH PRINCIPLE
Tell me what you do for work, and with near certainty, I’ll predict if you’ll ever escape the rat race.
How?
I simply look at the type of personal leverage you have, if any.
The Bad Math Principle reveals that every person stuck in the rat race is subject to unscalable and uncontrollable math, namely, no leverage. Truth is, every Unscriptee who’s successfully freed themselves did so through some type of mathematical leverage. And no, I’m not referring to business leverage such as investment margin or real estate loans. These are three rat race anchors that keep the Bad Math Principle active in your life.
ANCHOR ONE: INCOME AND WEALTH ARE CORRELATED TO TIME.
Carry a wage- or a salary-locus and the rat race will convince you that the only way to make money is to trade your time for it, either by the hour or the year. When I had a job stocking shelves at Sears, I only made money if I clocked in.
No work, no progress.
My income was limited by the hours I traded and the hours available, both uncontrolled and unleveraged.
Similarly, a respectable profession, say a manager, wouldn’t be paid by the hour, but by the year. Wealth creation is directly correlated to how much time you trade. If more money is needed, more time must be traded.
ANCHOR TWO: TIME CANNOT BE SCALED.
When you have a wage-paying job, your income is limited by the number of hours you work. Theoretically, the upper limit per day is twenty-four, but realistically, it is about eight to twelve. Likewise, if you are paid by a yearly salary, the same constraint exists: the theoretical maximum number of years you can work is just fifty or sixty. Realistically, it’s about forty years. Forty hours and/or forty years is what I call, bad math.
40 hours a week @ 20/hour = $800 a week
40 years of work @ $50,000 a year = $2,000,000 lifetime earnings
If time was scalable…
400 hours a week @ 20/hour = $8,000 a week
400 years of work @ $50,000 a year = $20,000,000 lifetime earnings
No matter how energetic you are, you can’t work 400 hours a day, or 400 years. Time cannot be scaled.
ANCHOR THREE: RAT RACE ECONOMICS CANNOT BE SCALED.
The rat racer’s reaction to these punitive problems is to seek a higher wage or a bigger salary.
In doing so, they will switch jobs, seek new careers, or even go back to college and blow a fortune on an advanced degree. Now, problem three stands in their way. Instead of being constrained by time, now the rat racer is constrained by rat race economics. Namely, excess supply, weak demand.
When a gazillion people can do what you do, you have no leverage.
You won’t make $20/hour one day as a short-order cook, and next week, you’re paid $1,000/hour because suddenly short-order cooks are in high demand and short supply.
If you earn a yearly salary, the same economics apply: if you make $60,000 this year as a transaction auditor for a drug company, you’ll never make $600,000 next year because suddenly no one can do your job.
Thousands of college graduates would be standing in line waiting to take your job. In both instances, you cannot control or scale dollars.
For example, let’s simplify our financial journey and assume your Escape Number is $5 million. In this scenario, you can safely save your money under a mattress, and there are no taxes or inflation. If it takes you 30 years to save $5 million, it will be just as valuable as it is today.
Let’s examine the math and see how poor leverage plays out in various careers and jobs. Keep in mind, these figures are BEFORE any taxes and presumes a generous 10% savings rate.
As you can see, if you make $31,200/year as a retail salesperson, expect to trade 160 years of your life to gross $5,000,000. That’s 41,666 eight-hour shifts every single day. Add life overhead (taxes, inflation, basic necessities), and saving $5,000,000 at a ten percent savings rate, you’ll need a cosmic 1603 years.
In other words, to amass a freedom-making fortune today, you’ll need a early fifth-century start, a time when Attila the Hun ruled. As you can see, driving the rat race with a wage-locus is a death sentence.
The news isn’t better with a salary locus.
Suppose you have a respectable job as an architect. In that case, you’ll need 574 years to save $5,000,000, assuming a generous ten percent savings rate. Perhaps the experts who push this method of getting rich consulted the Old Testament first—those Biblical folks supposedly lived to 900.
With a $87,000 salary, your best-case scenario is hardwired in the rat race system—and that scenario is mediocrity. Wage- and salaried-rats are stuck with what I call Uncontrollable Limited Leverage or ULL. And “ULL” means you’ll never escape.
Professional athletes and celebrities are one of the few professions that can disrupt ULL.
When there’s only one person on the planet with Lebron James’ skills, and everyone wants him for basketball or endorsements (low supply/high demand), Lebron James is not subject to Uncontrollable Limited Leverage. As such, he gets paid a leveraged amount.
This is why most people desire fame but don’t know why. Fame equals leverage and favorable economics. Who doesn’t want to make $5 million per movie, $500K per speech, or $50K per game? The human talent itself is the system of leverage, usually as an outlier skill, like pitching a baseball over 100 mph.
When it comes to average Joes like us, we have no such option. I’ll never sing, act, or play baseball.
If you want any chance of a rat race escape, Bad Math, or Uncontrollable Limited Leverage cannot be part of your existence.
The truth is, the Bad Math Principle isn’t taught at university.
It would never be revealed in some financial “stop drinking coffee” best-seller. Most educational sources promote bad math strategies: save a hundred dollars a month, invest for forty years, hope for eight percent returns, blah blah blah.
Numbers like 100, 40, and 8% doesn’t create wealth fast, it creates wealth old, or never.
Bad math handicaps wealth and becomes a bad offense.
A motivational quip might inspire you for a day or two, but if your numbers aren’t right, it doesn’t matter.
As they say, running enthusiastically in the wrong direction is, well, the wrong direction.
Dislike ads? Become a Fastlane member:
Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)
Membership Required: Upgrade to Expose Nearly 1,000,000 Posts
Ready to Unleash the Millionaire Entrepreneur in You?
Become a member of the Fastlane Forum, the private community founded by best-selling author and multi-millionaire entrepreneur MJ DeMarco. Since 2007, MJ DeMarco has poured his heart and soul into the Fastlane Forum, helping entrepreneurs reclaim their time, win their financial freedom, and live their best life.
With more than 39,000 posts packed with insights, strategies, and advice, you’re not just a member—you’re stepping into MJ’s inner-circle, a place where you’ll never be left alone.
Become a member and gain immediate access to...
- Active Community: Ever join a community only to find it DEAD? Not at Fastlane! As you can see from our home page, life-changing content is posted dozens of times daily.
- Exclusive Insights: Direct access to MJ DeMarco’s daily contributions and wisdom.
- Powerful Networking Opportunities: Connect with a diverse group of successful entrepreneurs who can offer mentorship, collaboration, and opportunities.
- Proven Strategies: Learn from the best in the business, with actionable advice and strategies that can accelerate your success.
"You are the average of the five people you surround yourself with the most..."
Who are you surrounding yourself with? Surround yourself with millionaire success. Join Fastlane today!
Join Today
