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Hey everyone,
I am re-reading a tenth edition hardcopy of "The Millionaire Fastlane ," and I am trying to verify the numbers MJ gave in his Fastlane wealth equation near the beginning of chapter 18. I got all of it but for part three where it says "Raise Unit Profit," I am not getting the numbers to work out. For example, in the book, MJ uses the equation Net Profit = Units sold X Unit Profit. In part three where MJ mentioned increasing his unit profit from $4 to $4.50, he mentioned how this raises his income from $8000 a day to $10,800 a day. Using the number of users at 20,000 a day with a 12% conversation ratio, that implies that (20,000) X (0.12) = 2,400. So if 2,400 represents units sold then with a unit profit of $4.50, Net profit = (2,400) X ($4.50) = $10,800. That number of $10,800 matches the one for $4.50 for unit profit in chapter 18 of "The Millionaire Fastlane ." However, with $4.00 in unit profit, Net profit = (2,400) X ($4) = $9600. MJ mentioned in this example in the book that his income was $8,000 as opposed to $9,600. Maybe perhaps MJ got his numbers from the asset value equation with the industry multiple but I don't recall MJ using the industry multiple variable in the example where he raised unit profit. I tried to search for other topics related to this but haven't found anything. I feel like I should know this but I don't. Did MJ DeMarco make a mistake here or is there an important concept I am missing that I am not aware of?
I am re-reading a tenth edition hardcopy of "The Millionaire Fastlane ," and I am trying to verify the numbers MJ gave in his Fastlane wealth equation near the beginning of chapter 18. I got all of it but for part three where it says "Raise Unit Profit," I am not getting the numbers to work out. For example, in the book, MJ uses the equation Net Profit = Units sold X Unit Profit. In part three where MJ mentioned increasing his unit profit from $4 to $4.50, he mentioned how this raises his income from $8000 a day to $10,800 a day. Using the number of users at 20,000 a day with a 12% conversation ratio, that implies that (20,000) X (0.12) = 2,400. So if 2,400 represents units sold then with a unit profit of $4.50, Net profit = (2,400) X ($4.50) = $10,800. That number of $10,800 matches the one for $4.50 for unit profit in chapter 18 of "The Millionaire Fastlane ." However, with $4.00 in unit profit, Net profit = (2,400) X ($4) = $9600. MJ mentioned in this example in the book that his income was $8,000 as opposed to $9,600. Maybe perhaps MJ got his numbers from the asset value equation with the industry multiple but I don't recall MJ using the industry multiple variable in the example where he raised unit profit. I tried to search for other topics related to this but haven't found anything. I feel like I should know this but I don't. Did MJ DeMarco make a mistake here or is there an important concept I am missing that I am not aware of?
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